Tip: A Leader's Road to Managing Innovation

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“Management is doing things right… Leadership is doing the right things.”

 A paraphrased quote from Peter F. Drucker (...or Warren Bennis)

To be successful and effective in today's fast-paced digital business environment, Credit Managers have to innovate and adapt. To do this requires an understanding of the innovation process. Initially, you have to define the problem at hand. Then comes working to develop innovative ideas for change. The final stage requires the tools and resources for a successful implementation, followed by continuous evaluation and adjustments. 

Innovation can not be done in a vacuum

You have to consider the playing field for innovation in a real-world context. Consider the following: 

• The degree of your company's culture and senior management support is conducive to innovation and change. You may have to think incrementally, avoiding large-scale recommendations.
• Staff capability and training.
• The administrative capacity to manage new initiatives.
• Your company's financial limitations.
• Your ability to marshal cooperation from a cross-functional team of stakeholders.

There may be obstacles to overcome

It may seem daunting to think about being an innovator when your entire day is taken up with shifting priorities and demands. Without change, this will be your continuing fate. There are daily obstacles to change. Does any of the following sound familiar? 

• There are too many things to do with too little time. 
• We have to overcome the negative perception of the Credit Department's role.
•  Sales or even senior management does not see the need for change. 
• Credit Department staff is overworked or does not have the depth of knowledge needed.
• System capabilities are not adequate for the needed changes.
• Budget, what budget?

Innovation requires knowledge of your unique company culture and the level of cooperation you will receive to do things differently when it makes sense. By their nature, innovative changes may be disruptive as legacy business practices are transformed. Keep your eye on the end game. The goal of innovation is to stay ahead of competitors, drive business growth, and facilitate sustained cash flow and profitable revenue in the case of credit management. 

Innovation comes in different forms 

Think of innovation in the following ways:

• Innovation may have to be incremental in an organization where quick change and buy-in from the various stakeholders are slow and difficult.
•  It can offer breakthroughs, such as when your company acquires a new more powerful system. 
• Innovation may also be disruptive, requiring quick action and cross-functional cooperation to adapt to business or economic changes. Think of how quickly companies adapted to the recent pandemic, remote work, and consumer preference changes. 

The four steps of innovation

• Examine broken processes. 
• Develop an array of ideas for new approaches and select what works best.
• Implement agreed-upon solutions.
• Assess results and adjust where needed. 

How do I start?

Successful innovation is a team sport. 

• First, identify the top three issues negatively affecting your department's performance. Then address number one, then two, then three on a continuous basis.
• Set up meetings with a cross-section of stakeholders. Work to break down silos to get a variety of perspectives. At first, it may be difficult, even contentious. Do not give up. 
• Listen, and explore ideas that can be accomplished if you work together.
• Learn from the perspectives and needs of others. By including a network of relevant stakeholders, you can leverage a knowledge base that is otherwise unavailable.
  Conclusion: 

Although you work for a company, think like an entrepreneur. Think is a “real-world context.” Be willing to take the necessary risks. Think creatively, and demonstrate your desire to search for better ways to do things. Retain a commitment to succeed. Although you may face headwinds, never give up.

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