04/02/2024

A Growth Strategy that Creates and Protects Value

Be attuned to how you are creating new value

Ask any leader what comes to mind when they hear the word "innovation" and you'll quickly hear examples of a new, user-centric product design, or an R&D team pursuing a new mission or their company’s exploration of a new market opportunity to drive additional revenue. But what if this relatively narrow view captures only a slice of the potential innovation that resides within your organization? What if your organization could unlock non-traditional avenues and areas for innovation, experimentation, and value creation?

Consider the controller function, for example, where compliance and getting things right — but not innovation — is often the primary focus. Yet, one multinational organization we've worked with turned it into an engine of innovation after facing a cash flow shortage due to declining global demand. Upon conducting external research, the firm discovered an opportunity to improve its cash flow by extending vendor payment terms from the customary 30 days to 45–60 days, in line with industry norms. This singular move generated an additional $1 billion in cash flow, which proved to be crucial for sustaining long-term investments during the industry downturn.

Here's another example of innovative thinking: Brian was a new attorney at a traditional law firm that focused on billable hours and utilization rates as its metrics of success. Frustrated by inefficiencies, Brian saw an opportunity to automate the negotiation process for fixed and alternative lease fees, a task repeated 100+ times annually. With support from senior partners, Brian implemented a client-facing survey tool integrated with draft contract templates. This innovation significantly reduced contract development time, minimized errors, and boosted utilization rates. It also led Brian to establish his own company, which specializes in data science connections and tech solutions.

Please select this link to read the complete article from Harvard Business Review.