In it Together – the finance role in innovation

If you ask NHS clinicians and managers about the finance role in innovation I guess the response might not be overwhelmingly positive. Our National Inquiry into the Finance Leader’s role in Innovation uncovered some surprises.

Historically we will have experienced finance leaders providing investments for innovation, saying yes or no to new developments. In the literature finance innovations are primarily associated with the release of resources rather than in the sphere of social value. But that’s not what is going on now.

In our Inquiry witnesses gave us examples that illustrated that finance leaders were identifying with a leadership role in social innovation (creative ways of working and communicating, cooperating and collaborating to generate social value Jiang and Thagard, 2013) [i] by being enablers and facilitators, rather than custodians and guardians. This shift into balancing assurance with change is significant.

We found examples where finance leaders were developing a new set of relationships within and across functions:

1. Working alongside and in support of clinical decision-making as a real partnership. The focus here is finance that enables great clinical care, by facilitating change rather than being authoritative managers.
2. Bringing their understanding of the whole of the organisation to bear on team or organisational challenges. Because of finance leaders in depth knowledge of all the parts, they have insights into issues that are causing problems or are stuck, and they can put this into use: “Finance, in a professional sense, we touch everything and, therefore, the network we’ve got under people, literally, if you combined it, we know everything.”
3. Creating innovation readiness by providing close to real-time data. Showing a real understanding of what it takes for teams and systems to adapt i.e. feedback in real time (not 2 months after the event). We saw fantastic work to ensure reporting on activity and cost on the same day (Working Day One) from Bolton NHS Trust.
4. Aware of and making efforts to ensure that there was a focus on data for innovation as well as data for performance.
5. Focusing on value and balancing assurance and innovation – not letting assurance stifle ideas; teaching managers to understand risk in a mature way; securing common goals to enable risk-sharing; not letting assurance stifle innovation and at the same time ensuring innovation delivers value.
6. Securing structural innovation in funding and payment mechanisms.
7. Creating a focus on the long terms as well as the short term to ensure organisational adaptation (Ambidexterity  – Raisch and Birkinshaw’s (2008)^[2]

However ‘innovation’ is not in the day to day language of finance leaders, they tend to talk about creating value, which could be mistaken by colleagues to have other meanings and intentions than generating innovation. Finance leaders need to adopt the language of innovation that enables them to take up the new roles we heard about in the Inquiry:

• Resourcing headspace (providing time, processes, people, funding), and testing ideas in action.
• Providing data and intelligence to teams to disrupt the status quo and generate ambition for a better future, supporting development and innovation for new ways of working, to create social value.

One of the key structural enablers would be to bring the business intelligence/ data/ IT functions and combine this with the finance function as a service.

What seemed to get in the way of finance leaders taking a role in innovation is of course the flip side of the above list, but also:

1. The politicised nature of the NHS generating a culture of risk aversion not necessarily held within the finance function.
2. The tension between national fire-fighting and creating local headroom for change

Finance leaders where positive about the move towards collaboration in the NHS, where ideas can spread between organisational partners.

Overall there is of course the wider context for innovation in the NHS, and the conditions for innovation are no different in the finance function. These are:

• Innovation as the day job.
• Outward looking, open to learning from others and to share learning.
• Clarity of purpose and ambition, and not being distracted away from this – particularly at the top of the organisation/ system.
• Diversifying views – bringing in a wider set of views into any problem/issue.
• Openness and transparency between partners (in clinical teams, between directorates, between organisations, between the centre and the field).
• Fail in order to learn.
• Demonstrating impact and value.
• Focus on the longer term as well as the short term.

Finally a theme throughout the cases we explored was ‘pace’ – getting behind the pace of change needed by bringing intelligence into decision-making quickly and enabling rapid testing of ideas into action with appraisal of relative value.

If we can harness the focus, pace and data intelligence in the finance function with its knowledge about the whole of the organisation, alongside clinicians commitment to professional review and making the best decisions with citizens we have a powerful partnership for innovation.

With thanks to co-author of the report Tessa Crilly

[i] Jiang, M. and Thagard, P. (2014) “Creative Cognition in Social Innovation”, Creativity Research Journal. vol. 26, no. 4, pp.375-388.

[2] Raisch, S., Birkinshaw, J., Probst, G. & Tushman, M.L. (2009). Organizational ambidexterity: balancing exploitation and exploration for sustained performance. Organization Science, Vol 20, no 4, pp 685-695.