Whether it’s used to attract and retain talent, gain market share, or succeed in an industry full of disruptors, innovation is no longer a strategic advantage; it’s an organizational imperative.
“You could argue that innovation is not optional anymore,” says Ethan Bach, Managing Partner, Innovation and Solutions, at Baker Tilly, a top 10 advisory CPA firm.
“If you’re the leader of the company, and you say ‘Innovation’s risky,’ you may be creating a real problem for yourself in terms of attracting and retaining talent. The younger generations want to work for innovative companies.”
That imperative means more than investing in a few random blue-sky projects but building and nurturing a robust infrastructure of innovation:
- Putting ingenuity in the hands of all employees and creating a mechanism to recognize their contributions
- Accepting failure as an option to encourage out-of-the-box ideas
- Injecting new ways of thinking into every facet of the organization—from internal communications to cross-functional brainstorms, from financial flows to data capture
Baker Tilly celebrated its 90th anniversary last year—a testament to an organization that doesn’t stand still. They evolve. They adapt.
It has been Baker Tilly’s experience that deep and enduring innovation can be broken into three fundamental drivers.
When individuals at every level understand the organization’s strategic direction, how work they do connects, and that their contributions matter.
What is required for the company to stay relevant to its clientele and constituents discovered through employee-driven customer intel and disciplined ideation.
How roadmaps, enterprise software, proprietary data, and data analytics are leveraged in service of innovation
Innovation manifests differently across industries, but asking core questions can help unlock potential no matter the sector.
Within the guiding framework of people, product, and process, consider these five questions to help cultivate, broaden, or finetune innovation in your organization.
A crucial step in fostering an innovative culture is to look internally and externally to determine your innovation quotient. A thorough and candid audit across finance, talent, and technology highlights where innovation is needed most.
Areas to start your audit include:
- Examining revenues over the last three to five years and assessing what percentage comes from new products and services
- Measuring how well you are reskilling employees both to remain attractive as an employer and to futureproof your company
- Critiquing your internal processes with no “sacred cows” — from data governance to financial processes to HR protocols
- Understanding the competitive landscape beyond your own industry and assessing the pros and cons of whether to “build or buy” to shore up gaps
Sharing widely the results of the audit, and clearly defining next steps underscores the company’s commitment to progress. Furthermore, inviting feedback on the way forward ensures all employees feel engaged and influential in innovation.
Industry: Food and beverage manufacturing
Goal: Align team size and remit to match a company’s growing revenues and customer base
Innovation engine: Engaging with individual plants and plant managers 1:1 on what they need from finance and accounting—the talent, time, and tools.
Innovation impact: The conversations uncovered an outmoded and manual invoicing and approval process. Automating it saved the accounting department many hours, which it shifted to higher-value work. The process also kicked off a roadmap for wider organizational change and helped pivot the company to a shared services model for parts of the finance function, a shift that eventually rethought 100 corporate processes across 25 initiatives.
The greatest need in innovation is having the runway to ideate freely and often. But as they say, “ideas are cheap”; it takes stamina and focus to ensure these fresh ideas take flight to have the desired impact.
For example, customer experience (CX) has been highlighted as the centerpiece of the modern enterprise. In a recent Harvard Business Review report 80% of respondents shared that improving CX was essential to their business success. To illustrate, companies wanting to ideate around improved CX could follow these four steps:
Establish a “current state” of CX by observing customer behaviors and documenting their various journeys.
Embark on a cross-functional ideation workshop focused on CX innovation to generate as many ideas as possible.
Agree on a set of criteria to match the ideas against. Winnow down the ideas to a top 20.
To assess their viability, test these 20 ideas with customers in an online survey utilizing a methodology known as Kano Research. This approach ranks each idea on a scale from “Undesirable” to “Delighter,” with those near the bottom deprioritized.
Earmark ideas that score high for product development and part of the company’s CX “future state.” This starts you down a more realistic path for the initial idea.
“We think this research method is extremely effective,” says Claudio Garcia, Senior Manager of Baker Tilly Digital, because it can clearly “gauge your innovation ideas in terms of their potential to strengthen customer satisfaction, loyalty, and purchase intent.”
By vetting ideas in this transparent manner, leaders can strengthen the organizational muscle for disciplined, productive brainstorming, engage a wide set of team members and customers, and establish a clear, direct roadmap for all to follow.
For an innovative culture to grow and thrive, it needs to be interdepartmental. But with competing fiefdoms, different terminology, and at times outright adversarial charters, intersectionality—the integration of diverse cohorts—is no walk in the park.
In discussing the value of intersectionality, Baker Tilly’s Managing Director of Higher Education and Risk Advisory Christine Smith shares that “having an integrated approach to innovation engages employees, who can see that exciting things are happening.”
Starting with the desired outcome, goal-set across key departments based on the areas of expertise. Here is where culture can truly be formed, making sure each employee is aware of their unique role and how their contribution may ladder up to the end goal.
Multi-team initiatives are also an opportunity to demonstrate that not all innovations need to be pan-enterprise and that even the smallest contribution can have the most immediate impact or snowball into an even bigger one.
For cross-team collaborations to be successful it requires strong leaders who know how to measure the success (or failure) of their teams’ activities and how to communicate this to both their reports as well as their colleagues.
Industry: Higher Education
Goal: Improve graduation rates through untested methods
Innovation engine: Integrating decision-makers across distinct research charters such as career readiness, diversity, equity, and inclusion (DEI), and affordability
Innovation impact: By working together across departments, the university realized there were new ways to combat food and housing insecurity, a key factor in the dropout rate. The cross-functional team devised a new financial intervention framework that was more responsive for vulnerable students.
For innovation to succeed employees must understand not only the why and when of innovation, but the who and what’s in it for me.
“A couple of the most basic ways to reward innovation is to highlight the individual; this kills two birds with one stone—giving recognition but also strengthening the innovation culture,” says Claudio Garcia. “Then, over time, people see a pattern and see how being engaged with innovation can help their careers.”
Making sure employees know that innovation can advance a career and that there is no punishment if their ideas don’t work is fundamental; both big wins and big swings should be celebrated.
Furthermore, defining a reward system that is transparent and company-wide (and not left to the whim of a few keyed-in managers) is imperative. Within the reward system it’s important to establish a defined framework for quantifying contributions across an even playing field.
None of this advice works if it’s implemented in a culture in which people are afraid of what happens if they dream big and get it wrong.
When employees are brainstorming to improve a product or process, they need to know there are no bad ideas in order to truly be able to come up with the game-changing ones.
Then if the data later shows an innovation was a measurable miss, employees must also have the confidence to speak about it honestly and go back to the drawing board with the same initial drive.
In short, “Both monetarily and culturally, it has to be okay to fail,” says Kristen Russell, Managing Director of Baker Tilly Innovation and Solutions.
Markets evolve and companies must as well—the bedrock of which is the freedom to experiment and learn from mistakes.
The internet dramatically shifted the balance of power from companies to consumers. Some of the greatest innovators of the last 20 years like “Tesla, Uber, DoorDash, and Volt revolutionized in response to changing customer needs,” offers Christine Smith. “They flipped the narrative to the customer’s perspective, what they were demanding, on their terms, and what they valued most.”
But spotting the “white space” is often easier than filling it. That’s where operationalizing innovation—through people, products, and process—makes all the difference.
This content was produced on behalf of Baker Tilly by Quartz Creative and not by the Quartz editorial staff. Sources are provided for informational and reference purposes only. They are not an endorsement of Baker Tilly or Baker Tilly’s products or services.