Suhaini Kasmuri, fondly known as SK was a former CFO in various companies (local and MNC). He is also a chartered accountant by profession and a member to Malaysia Institute of Accounting (MIA). Recently I managed to catch him to get his view on Innovation, Change and Entrepreneurship (ICE). Especially with many organizations venturing and investing in innovation, how does a CFO make sense out of it?
KA: Given the lower rate of innovation success, how best to finance innovation programs?
SK: Innovation programs come in many shapes and forms within the organizations and the financing arrangements will also vary according to the types of innovation and the capability of the respective organization to finance them.
There three parts of it – People, Process and Technology. For People, you can use your training and development budget to upgrade your team skillset. You can stop sending them to outdoor teambuilding for few years because innovation program with task-driven is more productive and raised teambuilding as well.
Second Process: Spend some of your annual marketing budget, maybe around 20-25% to run strategic / ideation labs to reimagine and redesign those processes especially customer facing. You shouldn’t drive up marketing for products and services that customers unhappy about, would you? This include removing outdated SOPs and work processes that hinder exceptional customer experience – such as “all application form need to be manually company chop for further processing.” This is 2020, go digital!
Third Technology: Once your sorted the People and Process, you should have a clearer idea what kind of tech need to come in to boost your products and services etc. In some companies, they start with Technology first and they struggle to get their People and Process to adapt – there’s a limit to adaptability.
Some crazy stuff, if you don’t mind. Financing innovation particularly for “disruptive” type or big tech which involves ideas that could transform a society, new market creation and high impact can be by way of equity or debt financing depending its associated business risk and viability of the programs.
KA: Do you think organization should tolerate failures in order to give people space to try and experiment new ideas?
SK: New ideas can be very emotional and risky as in many cases it involves change process and often leads to failure. However, new ideas may not necessarily involve big projects that requires significant budget and long runway to be implemented.
My view maybe radical for most CFOs, I believe organization should tolerate failures in order to give people space to try and experiment new ideas in small ways that eventually add to the big pictures. Cultivating innovation culture will take any company miles.
Furthermore, with the right innovative techniques, organization would be able to save time and money to avoid any major or catastrophic failure.
KHAIRUL (KA): How do you get buy in from the Top Management to invest in innovation capability development / training?
SUHAINI (SK): Top management need to be fully aware that for innovation to work, it does not necessarily only require investment in innovative technology or system.
For innovation process to become operational, organization will most importantly require to invest in time, human and other resources including capability development and training.
In doing this, we need to demonstrate to the top management how well we understand their problems and how can we help them to solve the problems better, faster and more cheaply than that of their competitors by investing on the right training focusing on innovation capability development among employees.
KA: With the advent of data-driven decision making, how design thinking tools help you?
SK: Design thinking tools coupled with data-driven analytics can help organizations unlock new business opportunities and reinforce long term innovation capability. There’s some short term gain, with long term always in mind.
The advent of data-driven decision making has enabled organizations to know their customers better which in turn drives up the quality of the products and services. But wait a minute, where’s the data?? This is when empathetic innovation tool like design thinking helps.
Yes this is the biggest challenge in data-driven, because the data isn’t present. It is in someone’s laptop or latent experience. It isn’t explicitly available. We need to discuss this on the table before purchasing those expensive data technologies.
KA: What is your advise on organization & workforce that wishes to innovate and change?
SK: Firstly, the organization and workforce need to be clear and understand on the need to innovate and change. Businesses should not fear letting innovation and change flow like a stream through the heart of their organizations.
It must be a continuous process whereby everyone in the organization must make it a part of everything they do on daily basis rather than isolating it remotely on a case to case basis as and when the need arises.
Management team must have trust and give their undivided supports for employees to innovate so that they feel empowered. Even if the ideas did not work as they are intended for, it is important that the value of their contribution is still recognized as long as the impact due failure is within a tolerable range.
Thank you for this interview.
SK will be conducting his own workshop on “How to Tell Your Business Story from Financial Statements?”. It is a finance for non-finance workshop. This 2-day workshop will be conducted in March 2020. Inquire within to firstname.lastname@example.org
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