The Keeper of the Purse: Finance Drives Innovation
Traditionally speaking, the Finance Department isn’t looked at as a function of innovation. This is normally reserved for Marketing or Product Management, but hear me out. The “Keeper of the Purse” is much more than the department that won’t approve your budget request. Finance is an unbiased, data-driven team that has an eye into every part of the business. In an article on Forbes written by my colleague Uwe Erdtmann, he argues that through the use of an intelligent suite, finance experts are becoming the real drivers of innovation.
In my last blog post, I spoke about the power and clarity that predictive analysis offers businesses, but what I failed to mention is who is best equipped to utilize it. Through an intelligent suite, finance leaders are supported by data, predictive capabilities, and automated scenario analysis. In my opinion, this is a key difference between Finance and other departments.
“This opportunity to innovate as a matter of course – not as a response – enables strategic moves, such as entering new markets and seizing a competitive advantage.”
Due to the constantly changing nature of the market, other functions of the business are often spending time reacting to the market instead of proactively innovating. Uwe quotes the Harvard Business Review paper which states, “To develop the right digital business strategy, [small and midsize enterprises (SMEs)] need leaders with a clear line of sight across the entire business. That’s often the role of the finance expert. As ‘keeper of the purse,’ the finance expert has the most credibility.”.
If you’re interested in the paper by the HBR, you can check it out here. I’m interested to hear your thoughts on this. Do you think that finance leaders are the true drivers of innovation? If not, which departments do?
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