IT is no longer sustainable for CFOs to decide that innovation is someone else's job. Leading CFOs who are passionate about their roles as champions of growth are champions of innovation too.

Everyone agrees that innovation has a keen place in business. Yet many have stagnated in their traditional approaches to innovation, and are failing to keep pace with the technological advancements and increasing customer expectations that are massively redefining the competitive landscape.

Those who believe that innovation belongs within R&D are hugely mistaken. Companies that have taken innovation outside the confines of the R&D department and embedded it within every level of the organisation are those that are making the greatest strides ahead of their competition.

Innovation should not only drive product and process development, but also brand, customer experience, supply chain and new business models. Innovation must be pervasive - vertically and laterally across the business. It is everyone's responsibility, championed by the leadership team, including the CFO.

However, this may not come naturally to many large organisations and, in particular, to CFOs. Finance leaders have an intrinsic focus on risk management and cost reduction. But with growth returning to the business agenda of many companies, innovation - when successfully executed - is what will drive the products and services that bring home the buck or improve productivity for better cost efficiencies.

COLLABORATIVE INNOVATION

Bucking conventional thinking, leading companies recognise that innovation does not only come from within. More companies are looking outside their organisations to partner with others, including entrepreneurs, academics and even competitors, to develop new innovations and build their own innovative capability and processes.

According to EY's recent consumer products study Delivering agile innovation, about 66 per cent of executives surveyed globally felt that collaboration with entrepreneurs (or corporate venturing) is strategically important to them. It's a win-win collaboration: for large companies, these partnerships give them direct access to new ideas that they can commercialise, and also lessons on the process of innovation. For entrepreneurs, they benefit from access to funds to invest in their ideas and build scale, as well as knowledge relating to governance and market insights.

However, such collaborations are neither easy nor fruitful always. Less than 10 per cent of the consumer products executives we surveyed said they are good at aligning incentives, and only 20 per cent said they realised revenue increases thanks to a partnership. The CFOs of both the corporate and entrepreneurs in the collaborations have a core role in making these relationships work.

The CFO needs to lead in undertaking the due diligence to find the right partner, including ensuring that strategic priorities and cultural fit are aligned. Modelling the return-on-investment and determining the right funding model will be key. Both the entrepreneur and the corporate must agree on an appropriate return on their investment, be it capital or shares in the entrepreneurial company.

THINK GROWTH, ACT INNOVATION

The CFO should also play a vested role in establishing a governance framework, KPIs and measures of success, and take a long-term perspective on the relationship, including ascertaining whether the entrepreneur will ultimately retain its autonomy, or be integrated within the corporate.

Leading CFOs who are passionate about their finance role view themselves as champions of growth - and champions of innovation. They ask difficult questions of themselves and constantly push the boundaries of management thinking.

For example, how can they use their influence in the C-suite to ensure innovation is on the executive agenda, and make it an investment priority? Can they take a lead role in revising the governance relating to innovation, to create a more favorable and nimble environment, while at the same time ensuring there is adequate risk management and measurement frameworks in place? What are the right investments in innovation to support growth, whether by accessing new business offerings, or by developing new skills and processes to increase innovative capabilities?

What is clear is that saying innovation is someone else's job is no longer sustainable for businesses today, and probably career-limiting for the CFO too.

The writer is Asean and Singapore Managing Partner at EY; the views reflected in this article are the author's and do not necessarily reflect the views of the global Ernst & Young organisation or member firms