Finance leaders are creating conditions for innovation success across a range of industries.Getty Images
From artificial intelligence to green energy and the metaverse, paradigm-shifting innovation is reshaping every sector of the economy. Here in Canada, the government has invested substantially in new technologies, fuelling the growth of an entrepreneurial landscape that is rapidly shifting.
Underpinning much of this change is digital transformation, which involves upgrading outdated processes and harnessing practical developments such as machine learning and artificial intelligence to boost efficiency, manage data seamlessly and free up bandwidth to problem-solve.
But this transformation is not just the purview of chief technology officers. Finance leaders are the keepers of the numbers and much of that data, making them integral to ensuring a business can sustainably manage change.
“Digital transformation is crucial for Canadian companies to remain competitive, increase efficiencies and better serve customers in an increasingly digital world,” says Winnipeg-based Enoch Omololu, founder of the personal finance platform Savvy New Canadians. “As a finance leader, I recognize the strategic importance of innovation and have led initiatives to implement new financial planning and analysis systems, automate reporting and integrate artificial intelligence into forecasting at my company.”
Mr. Omololu recently led the effort to implement a new financial planning and analysis system, harnessing dynamic modelling and the ability to automate routine tasks for the finance team. Not only did this help with forecasting and budgeting, it “freed up my team’s time for more value-added analysis,” he says.
And, in Mr. Omololu’s experience, the role of chief financial officer or other finance leaders in driving innovation doesn’t stop at payroll or accounts payable.
“Finance brings analytical rigour and an ROI mindset to help evaluate which innovation programs to pursue,” he says. “Finance leaders get to help shape the innovation strategy and enable investment in new technologies that can transform the business. Guiding resources to high-potential programs that drive growth and efficiency is extremely rewarding.”
That ability to keep the bottom line in mind is central to a finance leader’s role in innovation, says Tyler Thielmann, president and chief executive officer at Vancouver based Spring Financial, a financing company which provides personal loans and mortgages.
“When projects are not accurately measured, companies can spend capital recklessly,” he says, adding that the finance leader plays a key role in determining the minimum viable product version of a new technology or initiative, leaning on clear hypotheses and metrics for success to strike that balance between creating something great and investing wisely.
“Sometimes this also means making a judgment call and abandoning projects that are proven not to work,” he says.
The team at Spring Financial prioritizes digital transformation as a focal point of their business. Efforts have included building custom software to review supporting documents to loan applications. Spring Financial was also one of the first Canadian financial institutions to enable text message communications with customers.
Through this automation, Spring has seen big increases in efficiency. In fact, 30 per cent of their loans are approved with zero staff members touching the process.
Mr. Thielmann credits their ability to innovate to fostering an “idea meritocracy” where “anyone can bring forth ideas.” It’s why he advises innovation leaders to ensure diverse representation at the table.
“Having a diverse team means diversity of thought – people see things that don’t exist yet in the Canada market and can contribute interesting ideas,” he says. “It all starts with a leadership team that is curious and asks questions.”
This can sometimes mean a finance leader is stretched beyond their comfort zone, says Wajdi Ghoussoub, head of finance at Plooto, a Toronto-based financial solution that automates payments for small and medium-sized businesses.
“Being a CFO tasked with launching innovation programs forces you to go beyond the numbers,” Mr. Ghoussoub says, pointing to his own experience guiding the investment in a new technology stack that touched multiple, very different areas of the business including design, vendor management and remote-work collaboration. “As we build, we think of people, processes and technology. You have to strike a balance between all three.”
And, finally, there’s the finance leader’s crucial role in budget management.
“In today’s world of high interest rates, finance executives are increasingly acting as the final gatekeepers behind smaller and smaller amounts of cash getting out of the door,” Mr. Ghoussoub adds. “Return on investment is more critical than ever, especially in cash-constrained environments where funding is expensive.”
With digital transformation, you’re constantly juggling different priorities, he says, balancing short-term returns and longer-term gains in things like productivity.
“Naturally, a CFO is in the business of making decisions knowing the trade-offs,” Mr. Ghoussoub says. “It makes the job exciting and fulfilling.”