Andy's Finance Training Website:
https://www.superchargedfinance.com/free-stuff/
Contact Andy Burrows:
https://www.linkedin.com/in/andrewburrows/

FULL EPISODE TRANSCRIPT

Adam: (00:03)

Welcome back for another episode of count me in Adam Larson here along with my cohost Mitch Roshong. As we look to cover all things affecting the accounting and finance world, our topic for today is highly relevant. We had a great speaker, join us from the K and talk to you, Mitch, about strategic business innovation. How did the conversation go?

Mitch: (00:18)

The conversation was great. Andy Burrows is qualified as a chartered accountant in the UK and then moved from public practice audit to big business finance. He was quickly promoted through the ranks to finance director at the age of only 29 and has since worked in various sectors of business, including energy professional services and software. Andy is truly brilliant and had a lot of great stories to tell. So let's take a listen to the conversation.

Mitch: (00:43)

What is a strategic business innovation?

Andy: (00:52)

Sure. Well, I guess first of all, I started using the phrase strategic business innovation to talk about a big change that transforms the business in some way. But I'm not too specific. When I started using that phrase at all I wanted to do is distinguish from innovation in the finance function itself and look at what's going on outside of finance in terms of innovation. I guess secondly if you look at the definition of innovation in some published material, innovation is like translating an idea or an invention into something that creates value that a customer will pay for. So it's customer-focused, you know, for example, online banking or online grocery shopping, it makes customers lives easier or online shopping, like Amazon or even iPods. It just makes customers life's easier than it was before and I guess I'm not just thinking of technology, I think I'm open to thinking about other transformation ideas as innovation. Things like you know, for example when Southwest airlines brought in the 20 minute turnaround, it wasn't necessarily technology based, but it saved millions of dollars and it was transformational in terms of their business and enabled them to sort of dominate as a low cost airline for a number of years. So it's kind of transformation and new ideas for value creation within the business rather than within finance that I'm thinking about when I talk about strategic business innovation.

Mitch: (02:44)

And then in your opinion what should a finance professionals attitude be towards strategic business innovation?

Andy: (02:56)

Well, I guess start by thinking about an example of like blockbuster. It's an old example. I guess to reiterate blockbuster video could have had the chance to buy Netflix for about $50 million in the year 2000, but they refused. I think Netflix were even the laughed out of the board room. But a few years later, obviously blockbuster went bust and Netflix is now worth, it was about $30 billion when I last looked. That's incredible. And it's one of those examples. I mean, why didn't blockbuster want Netflix? And you know, I will say is because they weren't interested in customers except to make money out of them. So anyway, it's a big case study, but a and best not get sidetracked. Our main point in mentioning it is as a finance person, you don't want to be working for the next blockbuster or the retailers that are going out of business because of Amazon and so on. So that's why we're going to pay attention really to the likes of blockbuster and innovation. The other thing I'd say is that finance, and this is my slogan over the last few years is mainly in the business to drive performance. So finance has got to take to find this is going to care about the success of the business and we've got to desperately want to help the business to succeed and avoid failure. So we've got to have an open mind when it comes to innovation. We don't want to be the ones to say no to the next Netflix or Amazon because we were too risk averse. But at the same time, we don't want to support a repeat of the dotcom bubble, which had very little substance and was fueled by excitement and people throwing money at things just so they wouldn't be left out. So I guess that's the kind of balance for you I'd encourage for finance professionals with innovation.

Mitch: (05:13)

Sure and just as an aside to that, it was your article I came across on LinkedIn about the blockbuster and Netflix and that's what really interested me into bringing up this conversation and learning a little bit more about your mindset because it seems, you know, 20, 20 hindsight, right? You come across situations like that and it's just unbelievable to look at those numbers and the opportunity missed. So as finance you know, look to support innovation as part of their business strategy what kind of advice do you give those who are considering, you know, maybe a little bit of a riskier initiative as you said, or something innovative for their organization that's a little bit outside the box. How would you kind of coach them through that?

Andy: (05:56)

I think the first thing I'd is make sure you don't stifle research as far as resources in the business permit. Just allow and encourage research into new technology and new thinking and even research into competitor activity, you know, keep tabs on what competitors are doing and it may take a long time for that research to yield any results. And actually it's impossible really to do a business case for it because it's like we're researching to find out what we don't know yet, so how can we say what the returns are going to be? But we've got to give that like I said, as far as resources permit, we've got to give that that opportunity to do that. but it's important to, for those people involved in that, to know that what the purpose is, is to work out what new things could benefit the customer and that we should listen to those views really when we have strategy discussions. The second thing I'd say is related to that, we'd have to be careful not to kind of stamp out innovation too quickly on the basis that the business case doesn't stack up. You know, you could argue that online banking may not have had a very good business case if you measured it up against the do nothing scenario because all it was was a new technology. We're an offering new accounts or it wasn't gonna particularly you know, move people from one to another. But the fact was it was going to keep customers from going going away because of the technology used by competitors. So it wasn't a fair comparison really to say you know, to compare against the status quo. I suppose the fair comparison would be, what if we don't do it? That's a different ballgame. So you know, can we afford to let our competitors do a better job of serving our customers? So you've gotta think of it that way rather than just say you know, think of it in isolation.

Mitch: (08:28)

Well, as somebody who solely does their banking online, I'm very happy to see that all of these banks made that transformation. So great example once again now and, and I believe you did write something on that topic as well, so, yeah, that's tru...

S01 E92 - Fellowship