As organisations emerge from multiple lockdowns into a radically different operating environment, their ability to drive and sustain innovation will be vital to future growth.
Companies that prioritise and invest in innovation are far better positioned to deliver superior growth and performance post-crisis, according to a McKinsey report. For instance, organisations that maintained their innovation focus through the 2009 financial crisis outperformed the market capitalisation average by more than 30% — and continued to deliver “accelerated growth” over the next three to five years.
Increasingly, finance and accounting professionals will be called upon to lead and support innovation initiatives — and to adopt a more strategic role within organisations as automation replaces many of the day-to-day accounting tasks. Yet any form of impactful innovation requires a high and sustained level of creativity — a skill that has historically remained undeveloped (and largely untapped) within finance teams.
So how can finance professionals meet the seemingly abstract requirement of driving innovation and generating creative ideas?
A new study published in the Journal of Applied Psychology presents a practical and encouraging answer to this question. A team of researchers found that creativity is a skill that can be developed and sustained over time — even in the most unexpected places.
“We discovered that if managers provide a supportive, learning-oriented environment, even employees in ‘noncreative’ roles can rapidly improve and sustain their ability to innovate,” said Ella Miron-Spektor, the lead author of the study, and an associate professor of organisational behaviour at INSEAD. “The key is to encourage employees to recognise that creativity is an acquired skill, and then provide ongoing opportunities to learn from creative experiences.”
According to Miron-Spektor, this is among only a few studies that have gained conclusive insight into how — and why — creative abilities change over time. While there is an abundance of research on the topic, the majority of previous inquiries have focused on creativity at a given point in time. Moreover, most studies have investigated creativity in professions where it is part of the employees’ defined role, such as in science, art, or design.
Mapping creative output
To gain a new and more dynamic perspective on employee creativity, Miron-Spektor and her colleagues, Dana Vashdi and Hadas Gopher, based their research on data collected over nine years at a manufacturing plant belonging to Elop, an Israeli technology company.
In 2007, the company’s manufacturing division launched an innovation platform to encourage employees to submit ideas for improving their workforce or work processes. Managers reviewed the suggestions and provided feedback, and a panel of experts rated the creativity of the new ideas in terms of their originality and usefulness.
By analysing the data from Elop’s platform, Miron-Spektor was able to map the creative trajectory of each employee over seven years, using the number of suggested ideas and their average quality every year (based on the expert panel rating). Each employee had a different trajectory.
“We learned that by understanding an employee’s goal orientation and innate beliefs, we can predict his or her ability to be innovative over several years,” Miron-Spektor explained. “As a result, gaining deeper insight into goal orientations can have major ramifications for companies looking to embed a culture of innovation for the long term.”
Broadly speaking, goal orientations reflect the psychological framework within which employees interpret and react to tasks.
Understanding goal orientation
Past studies have identified two specific approaches or goal orientations: a learning orientation and a performance orientation.
Employees with a learning orientation have the innate belief that their skills and abilities — including creativity — can be developed and improved with effort, whilst employees with a performance orientation believe that their skills and creative abilities are fixed.
“Through our analysis, we discovered that employees with a learning orientation improved upon their creativity very quickly and continued to generate high-quality ideas, even when it became difficult to depart from tried-and-tested approaches,” Miron-Spektor explained. “On the other hand, performance-oriented employees became discouraged when they ran out of fresh ideas, and stopped engaging with the entire process at a much faster rate.”
To gain insight into your own goal orientation, ask yourself: Do I attribute my success or failure in creative endeavours to the amount of effort I’ve invested; or do I attribute my success/failure to my innate abilities?
“By paying close attention to our inner dialogue and assumptions about our own creative skills and abilities, we can begin to appreciate how our innate beliefs shape the way we approach tasks,” Miron-Spektor said. “So, if it turns out that you are more performance-oriented, for instance, then you should begin to challenge your own assumptions and seek learning opportunities that sit outside of your comfort zone.”
For finance leaders and managers, having an understanding of a team member’s goal orientation (including their own) can enable them to tailor their approach accordingly — and to ensure that teams have a mix of learning- and performance-oriented professionals. This scenario provides a strong foundation from which to embed a more distinct culture of innovation within your finance team.
When embarking on this process, Miron-Spektor identified three steps for finance leaders to consider:
Reframe creativity. “People within finance tend to undervalue or overlook their own creativity, so we need to reframe what creativity is,” she explained. “A creative idea can be defined as an idea that is novel, and that is both practical and useful in an everyday context. In addition, it is important to understand that creativity is just another muscle … we all have it, but it needs to be regularly exercised and developed.”
Establish a learning-oriented environment. This requires creating a workplace culture in which professionals are encouraged to gain knowledge, experience, and expertise within and outside of their own field. For instance, finance managers can begin to assign a wider variety of tasks and to consider shifting team members to new roles and positions that require them to work with new methods or to collaborate more closely with others. When working with performance-oriented individuals, it becomes particularly important to provide an environment in which taking certain creative risks is encouraged — and in which it is also safe to fail when taking these risks.
Develop a full life cycle for innovation. Finance managers should look to create a structured system or platform through which team members are called upon to put forward innovative ideas and suggestions. According to Miron-Spektor, it is critical to ensure that ideas are fairly evaluated and that team members receive structured, developmental feedback on their submissions. “If ideas are rejected and no feedback is provided, it is likely that the process will backfire and employees will disengage,” she added. “Feedback is key to improving the ability to differentiate promising ideas from those that might fail, and in learning how to develop new ideas into accepted solutions.”
— Jessica Hubbard is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at Alexis.SeeTho@aicpa-cima.com.