Meaningful innovation (part two)

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Speaking at The Economist’s CFO Summit 2013, Hal Gregersen, Professor of Leadership at INSEAD, examined how CFOs can foster innovation to prepare their businesses for the future.

After ascertaining that innovative thinking is two thirds nurture and one third nature, Gregersen set about developing a process which would help people harvest their creative ability. Working with a team, he examined the behaviour of 6,000 recognised ‘disruptors’ and determined that the higher up in a company an individual is, the greater the need for an innovative outlook.

Asking the Right Questions

“If we decide to spend our time and energy doing the things that innovators do we can get better at delivering value to our organisations.”

One of the most important characteristics of disruptors is that they systematically ask a lot of questions. Gregersen used Alan George Lafley, former CEO Procter & Gamble, as an example. Lafley often visited supermarkets and even customer’s homes, in a quest to see what problems they faced in their day to day lives.

“After going to a few homes then [Lafley] goes to the corporate offices and he has a conversation about what’s going on and how could we do it better.”

This first hand research allowed Lafley to witness the challenges facing consumers and ask his team how to solve them. The ability to ask the right question is, in Gregersen’s opinion, pivotal to the continued success of a business. Following this reasoning, he suggested “question storming” as an effective means of framing and solving a seemingly impossible challenge.

Original Solutions

In 2008, David Neeleman founded Azul Brazilian Airlines, a low cost, domestic airline. The first challenge he faced was that Sao Paolo airport did not have any free landing slots. Undeterred, Neeleman decided to use another airport as a hub. The closest airport was more than an hour away and consequently a taxi ride to the city would cost passengers more than the airplane ticket.

Neeleman suggested building a bus network to shuttle people between the airport and the city. At first his senior management team were sceptical. They did not want to invest in a solution that had never been implemented by an airline. Neeleman persisted and questioned every objection his senior management team made. Eventually the network was built and in 2009, Azul became the first airline to transport more than 2bn passengers in its first year.

Implementing and Nurturing

Gregersen is well aware that many finance professionals do not evolve in an environment which embraces original ideas. However, his research has led him to believe that by making small changes to everyday habits, anyone can enhance their ability to creatively solve problems.

In the words of Peter Drucker, the man behind the concept of ” management by objectives“; “The most common source of management mistakes is not the failure to find the right answer. It is the failure to ask the right questions.”

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