the cfo should lead innovation
TRANSCRIPT
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Why the CFO should lead innovationbeyond the traditional boundaries of finance
Melvin Brand Flu
UNLEASHING INNOVATIONS IN FINANCE 2017
May 12 2017
12/05/2017Livework © 2017
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The largest 1000 companies will spend $ 700,000,000,000
this year on R&D
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The competition is investing in innovation, are you?
A net increase of 9% of
companies are moving
from a defensive strategy
to a focus on innovation-
led business strategies.
The Hackett Group, the CFO agenda 2017
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Innovation and strategic business planning
are becoming more important itemson the CFO’s agenda
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Spending more ≠ growth ≠ profit
Spending more on
innovation doesn’t mean
being more innovative and
profitable: companies that
spend the most on R&D
aren’t driving the biggest
revenue growth.
Booz & company
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70-95% of innovations fail
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LaggardsLateMajority
EarlyMajority
EarlyAdopters
Innovators
The“Chasm” Current wave Next wave
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70-95% of innovations fail
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70-95% of innovations fail
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Customer adoption Laggards
The“Chasm” Current wave Next wave
Even if a product does solve
every problem, 94% of
people abandon it because
they find it difficult to use.
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Laggards
The“Chasm” Current wave Next wave
Organisational barriers
66% of managers indicated
that embedding innovation
within an organisation is the
biggest challenge.
Livework Insight
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Failing is #!% expensive! Laggards
The“Chasm” Current wave Next wave
The estimated cost of
innovation failure is $100
billion dollars for US Fortune
500 companies alone.
Anthony Ulwick, CEO of Strategyn
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Imagine…
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“We will stop irritating you”
We will stop irritating you
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Ruter fixed the PRODUCT….
now the SERVICE
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“We will stop irritating you”
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Product innovation is about
WHAT
Service innovation is about
HOW
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€ 1,000,000,000+ = 0%
€ 30,000,000 = 6%
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Product innovation is
EXPENSIVE
Service innovation is
HARD
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Why is service innovationHARD?
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Service innovation clashes with
business and organisationlogics
Logics = values, assumptions, beliefs and practices that prevail
within an organisation and a sector
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$ 40,000,000,000spent on advertising services
$ 2,000,000,000spent on designing services
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The customer has the answer
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Design for a rocket,
fly a paper plane
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WHY should the CFOsponsor, lead or ownservice innovation?
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The“Chasm”
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Service innovation involves:• Creativity to break with convention• LISTEN to customers• Validate in the real world• Co-create across teams, customers, partners• Be agile, not perfect
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Creativity to break with convention
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332013 © Livework
“We will stop irritating you”
LISTEN to customers
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2013 © Livework
Validating in the real world (service prototyping)
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35
Co-create across teams, customers, partners
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Be agile, not perfect
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The CFO shouldsponsor, lead, or own
service innovationbecause…..
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He/She is uniquely positioned to lead the organisation in
practicing service innovation…..
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and thereby:• Lower the risk of failure• Achieve better business
performance• Foster greater internal collaboration
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Service Design –From Insight to implementation
Service Design for Business: A Practical Guide to Optimizing the Customer Experience
Melvin Brand Flu
+31 655767278
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