innovation-gross-to-netMy definition of a great read or thought is something that changes the way I look at something. An example of this is a recent book I came across, “Beyond the Idea: How to Execute Innovation in Any Organization,” by Vijay Govindarajan and Chris Timble.

In the introduction, innovation is broken down into two parts: ideas and execution. I’d like to focus on the latter, as I believe it’s the notion of ‘new ideas’ in which most folks already find themselves defining innovation as. In reality, that first part of ‘new ideas’ is where most organizations expend most if not all of their energy on. What is typically found as a result of this decision is that one has many great ideas on paper, yet not implemented or in practice.

Think of it this way: most have an aversion to change. A new idea requires change, usually in and around the organization which it is to be implemented. This is a tough sell right out of the gate. And not just any change, a new ‘innovative’ change which actually requires stakeholders to think ‘outside of the box’ and consider a future state in ‘theory’ or ‘vision.’ Again, it is this second part of innovation I’d like to dive deeper into; a part that I believe is much easier to swallow for an organization, and a Gross-to-Net (G2N) organization more specifically.

A ‘Shift in Thinking’ to Execution

Believe me; I’ve been there: attempting to brainstorm the ‘next big thing’ for G2N, that new, wonderful concept that will take G2N organizations around the industry by storm. It’s tough. So what I did was shifted my thinking away from the ‘new idea’ and focused in on execution as a method of innovation instead. ‘If it ain’t broke, don’t fix it.’ Ok, well don’t replace it. From my experience, most organizations don’t have G2N issues that require a complete redesign or replacement (although some do seek that to that end nonetheless.) Rather, an improvement upon, optimization of even, execution within the G2N organization. The goal, said best by this recently read literature: all processes being repeatable and predictable. Who thought, right? Innovation defined as a repeatable, predictable process. 

Business Process Considerations

Let’s talk execution in regards to business process first. Making a G2N business process repeatable sounds easy enough, but where do you start? My suggestion, start from the top. Take inventory of all related business processes and begin to map them out.

For an example of what this looks like, take a look at this video:

Do not underestimate the value of business process mapping, and even more, communicating this mapping to the cross-functional organization. I think you’ll find, the ‘what’ and ‘how’ of optimizing these processes sort of ‘falls out.’

To that point, a few quick wins (across all business processes) once review and mapping of processes occurs, can be achieved by:

  • Implementing a standard workflow with forms
  • Performing a cross-functional review
  • Review internal controls
  • Place heavy emphasis on forms and approvals
  • Include a cross-training plan

For more detail on these initiatives and related tasks, download our whitepaper The Most Common Pitfalls in Quote-to-Cash Business Processes

Organization and Performance Considerations

In considering how to make a business process both repeatable and predictable, we must consider the organization and performance related to these said business processes. Interesting, how a few suggestions from my recent read, apply greatly to my discussion here on G2N. Within each business process, they are:

  • Break process into small, repeatable tasks
  • Extensively document
  • Strive towards result of efficient and routine process
  • Achieve specialization
  • Drive performance measurement and accountability

The Subtle Introduction to Change

By focusing in on execution, we are in turn ‘systematizing’ innovation. We are treating innovation similar to any other business process, and through this business process, we are driving the innovation by execution model. Perhaps without even realizing it, you are achieving innovation initiatives, by ‘intentionally departing from the past’ with newly optimized yet controlled business processes.

As an antithesis to this idea of innovation or change, I apply a fundamental premise I find prevalent in many finance and accounting organizations, and this typically shows very well within specific processes such as forecasting. ‘The current period will always look like the prior one.’ From the perspective of a forecasting model that mirrors this idea, which molds and forms inputs into an expected output that follows the form of past periods, we are limiting our opportunity for innovation. So standardize the procedures to the point where output always reflects inputs, and you will find, current periods no longer look like prior ones. Your true and most likely more accurate forecast ‘falls out.’ Big changes implemented? No. Change, and in turn, innovation through execution achieved? Yes. 

So, now that you’re considering the alternative to the ‘new, big idea’ for defining innovation, and as described here, using business process optimization (BPO) to achieve innovation as execution, subscribe to this blog  for more ways on how to apply this to your organization.