Recently, I was meeting with a client after performing an assessment on their back office operations. Unfortunately, the assessment highlighted a number of areas where the company was significantly under-performing when compared to industry benchmarks. The company’s head of the shared services organization sat stiffly as I, as gently as possible, relayed the details of our assessment and proposed major changes to their organization.
It wasn’t until I displayed a PowerPoint slide which had as its headline, “The organization ‘appears’ to be innovative, but in reality is focused on ‘blocking and tackling’ and is not innovative” when the SSC leader finally erupted. Literally leaping out of his chair, he exclaimed, “How can you say we’re not innovative? Just last year we standardized our systems to one ERP, and introduced document management and workflow to reduce the use of paper in our organization!”
I waited a beat, let him sit back down, and simply said, “That just makes you normal.”
What Does Innovation Really Mean?
That exchange led to a long discussion on what “innovation” means in the back office. I realized at that time that many organizations struggle managing the day-to-day, and “innovation” and “normal” are often considered the same thing. But they are not.
Standardizing systems and processes, reducing exceptions, updating business rules, automating manual activities, monitoring and reporting on operational performance, these are all the “normal” things that you can and should be doing. But many organizations are stuck in the mud of daily operations, wheels spinning, inching forward, only to slide back into the muck.
The “art” of innovation is found in creatively improving daily operations. This starts by doing the things that you are supposed to be doing, and constantly evaluating your processes and performance to see where hidden opportunities for improvement lie.
Being Open is the Key to True Innovation
It continues with being open and honest about your operation, your organization, and yes, your people. Refreshing your operation with new tools, process improvements and talent helps to drive innovation, but it is not innovation in and of itself. Innovation is a mind-set, and requires a cultural change, where thinking about change is as important as processing an invoice correctly and on time. That comes from leadership.
Innovative leadership is focused on current performance and future challenges. It balances managing the day-to-day with a focus on other key financial, operational and business objectives, such as lower cost, improving service levels and controls, achieving greater scalability, etc.
Innovative leadership doesn’t protect the status quo, it challenges it every day, and pushes staff to act and think in the same way. Not everyone is going to “get with the program”, and some will resist change. But identifying who your future leaders are, and working to develop them becomes a key part of the job.
Innovation is not just implementing Robotics Process Automation, Cloud-Based Systems, Self-Service Portals, etc. These are some of the tools that help you to drive change, but without innovative leadership, if they get implemented it’s because “everyone else is doing it.”
Defining “innovation” may be somewhat similar to Supreme Court Justice Potter Stewart’s famous definition of pornography: “I know it when I see it,” but for back office operations, there is a roadmap that can be followed. It starts with leadership, challenging the status quo, driving change, and introducing new concepts and technologies.
The first stop on the road is changing the organizational culture and thinking. Most people aren’t very comfortable with change, and back office staff take a certain comfort in the status quo. “This is how we do it” is a common refrain. Innovative leaders, on the other hand, resist the comfort of the day-to-day and push those around them to think and act differently.
We will further explore the concept of innovation in future articles, and look into the ways organizations can change the focus from “blocking and tackling” to “creative and strategic transacting.”