Design Thinking Mindset: The CFO Path to Innovation

Posted on 24 May 2023

​When it comes to the process of decision making inside their respective organisations, chief financial officers have worked their way up to a seat at the table. CFOs need to be adaptable in their leadership approaches in order to be effective in the face of looming ESG reporting challenges, managing generative AI, and handling human resource issues such as remuneration and changing workplace trends.

To be able to make a more significant contribution to the overall success of the organisation, the Chief Financial Officer (CFO) position has to be able to think beyond the day-to-day operations of accounting and finance.

According to a recent report published by the Institute of Management Accountants (IMA), the most effective method for CFOs and other members of the C-suite to tap into thoughtful leadership and become more strategic leaders of their organisation is to take a leadership approach that is based on design thinking. This leadership approach involves empathising with an audience, defining a problem, ideating potential solutions, prototyping potential answers, and finally testing what you have come up with. 

Putting the process into action

Design thinking leadership is something that most accounting and finance professionals are not typically taught in most business schools, but it is something that is required throughout the industry because we do need to contribute to innovation. Design thinking leadership provides something that can be another tool in the toolbox, and it is something that most business schools do not traditionally teach.

According to the IMA research, the design thinking process may be "deployed in finance functions to refine the function's strategic direction," in which case members of the finance function and the finance function's internal stakeholders would be essential end users to engage in the process. This is true regardless of how the C-suite decides to apply it.

The first thing that has to be done in order to empathise with those affected by a problem that needs to be handled is to determine who exactly is affected by the issue. According to the report, this stage may also incorporate direct observations as well as dialogues. The next stage is called defining, and its purpose is to provide clarity to the situation and derive meaning from the facts gathered in the first step. After that follows the process of ideation, which is the first step in developing potential solutions to the issue. The latter two processes, known as prototyping and testing, are performed in an iterative manner until the group develops a solution. 

According to the IMA report, the concept of design thinking is that leaders and teams may "fail fast to succeed faster," which enables CFOs to be more agile in their jobs. The more rapidly things are likely to change, the more flexible organisations will need to be.

The strength derived from familiarity

Not everyone in the financial department needs to be an expert on the process, which is difficult and requires a deep understanding in order to lead with it, but everyone in the organisation may benefit from being familiar with it. The process is complicated and requires a deep understanding in order to lead with it.

If you put yourself in the position of a stakeholder, it could appear to be a straightforward matter.

However, when we begin to go over some of the particular elements that allow you to accomplish that, such as ideation, this takes us beyond the typical method of brainstorming, which is probably restricting ourselves in the majority of situations

In today's volatile business climate, it is essential for finance teams to have the abilities that are taught and practised via the design thinking process in order for them to perform successfully.

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