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Business

Managing Innovation: Harnessing the power of finance Logo cgma

  Free |   CIMA |   May 2013 |   CGMA.org

Innovation is the key to sustainable business success in today’s fast-paced, volatile and uncertain world.

Companies that can nurture the creativity necessary for innovation, and then finance and implement their ideas efficiently are more likely to succeed in the long-term.

But achieving a balance between promoting innovation and managing risk is not easy.

To explore this area we have initiated a programme of research into risk and innovation. We invited senior executives to share their experiences at events in Asia, Europe and the Americas. Some of their insights, along with our own research, are captured in this report. It showcases how management accountants, who sometimes have a reputation as regulators of risk rather than as instruments of innovation, can help promote a culture of creativity and renewal. The report identifies five areas where finance leaders can have a critical impact on the way companies commercialise innovative ideas. From helping to support and foster an innovative mindset within the business, to implementing new ideas effectively and managing risk across a portfolio of projects, there are numerous ways in which finance professionals can support the innovation process.

Topics covered:
  • Management accounting: Business: Strategy, Advanced
  • Management accounting: Business: Project management, Advanced
  • Management accounting: Technical: Risk management & internal control: Risk identification & assessment, Intermediate

2 Comments/Reflections

Michael Law

Michael Law Jan 2024

Found the article interesting if a little obvious at times.  It is clear that to enable innovation one needs to consider how such initiatives get funded and that traditional methods and metrics are not best suited to early stage initiatives where both risk and uncertainty are high.

Having competent finance professionals involved at the various stages of innovation makes sense and is clearly desirable to help innovators ensure that the path to realisation is smoothed, or the initiative is shut down sooner if the path to profit isn't there.

Creating a culture of innovation is however what seems to be at the heart of success...enabling people throughout the organisation and across the value chain to innovate both at a small scale and a larger scale is key to an organisations ability to innovate but I get the sense that it is harder to achieve than it is to merely put down on paper.

The article also doesn't talk about the people impacts of innovations that fail or are cut short as the path to profit maybe evaporates.  It would be interesting to understand how morale is maintained in these cases.
Tshepo Irvin Direro

Tshepo Irvin Direro Aug 2017

Finance requires intensive influential skills because it's top-down-bottom-up function with a lot of communication. 

Industrial and Engineering designers  perform cost and value engineering, risk assessment and report to the Management Accountant. Management Accountants also have a dual responsibility to the financial and managing directors for strategy and target setting.

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