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
The largest 1000 companies will spend $ 700,000,000,000
this year on R&D
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
Innovation and strategic business planning
are becoming more important itemson the CFO’s agenda
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
70-95% of innovations fail
LaggardsLateMajority
EarlyMajority
EarlyAdopters
Innovators
The“Chasm” Current wave Next wave
70-95% of innovations fail
70-95% of innovations fail
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.
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
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
Imagine…
“We will stop irritating you”
We will stop irritating you
Ruter fixed the PRODUCT….
now the SERVICE
“We will stop irritating you”
Product innovation is about
WHAT
Service innovation is about
HOW
€ 1,000,000,000+ = 0%
€ 30,000,000 = 6%
Product innovation is
EXPENSIVE
Service innovation is
HARD
Why is service innovationHARD?
Service innovation clashes with
business and organisationlogics
Logics = values, assumptions, beliefs and practices that prevail
within an organisation and a sector
$ 40,000,000,000spent on advertising services
$ 2,000,000,000spent on designing services
The customer has the answer
Design for a rocket,
fly a paper plane
WHY should the CFOsponsor, lead or ownservice innovation?
The“Chasm”
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
Creativity to break with convention
332013 © Livework
“We will stop irritating you”
LISTEN to customers
2013 © Livework
Validating in the real world (service prototyping)
35
Co-create across teams, customers, partners
Be agile, not perfect
The CFO shouldsponsor, lead, or own
service innovationbecause…..
He/She is uniquely positioned to lead the organisation in
practicing service innovation…..
and thereby:• Lower the risk of failure• Achieve better business
performance• Foster greater internal collaboration
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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