Companies that are innovation-friendly grow faster and are more profitable than their rivals. Yet many managers aren’t happy about generating and implementing ideas. Controllers don’t appear to be particularly helpful here either: an online study of the Institute of Management Accounting and Control of WHU – Otto Beisheim School of Management shows that the Controlling community keeps a certain distance from the innovations issue. This seems to be consistent with the general image of the controller. Controlling is said to be a profession that strives for security and prefers the status quo. Is this image of the controller as "innovation killer" an accurate representation, or is it cliché? Aren’t there lots of little innovations – besides recent 'blockbusters' such as the balanced scorecard – that found their origins in Controlling departments? How can Controlling provide support for the innovations pipeline, and how innovative is Controlling itself? These are just some of the questions that were discussed by over 100 controllers, heads of Controlling, CFOs, managers and academics on September 12th at the 8th WHU-Campus for Controlling which was hosted by Professor Utz Schäffer and Professor Jürgen Weber. Leading practitioners from MLP Finanzdienstleistungen, Deutsche Bundesbank, Henkel and the Dematic Group gave presentations on innovative projects in their companies. In addition, Holger Ernst, Professor of Technology and Innovation Management at WHU, provided exciting and thought-provoking ideas during the experts’ discussion.
Professor Jürgen Weber kicked off the conference by introducing the topic. He began by explaining the terminology and different types of innovation. According to Professor Weber, “An innovation does not always result in a new product. There are also process, position and paradigm innovations”. He continued by looking at current examples from four DAX Companies – SAP, Henkel, Telekom and Lufthansa – from which he took his central finding: “The more radical the innovation, the greater the change in the role of the controller has to be. If this doesn’t happen, then the innovation will not meet expectations and may even fail“. It is essential that explicit innovation management takes place. All in all, by orienting themselves to innovation, controllers are taking a significant step on the way to becoming business partners.
The progression from reactionary report writer to innovator was at the heart of the presentation given by Benno Günther, Head of Controlling at MLP Finanzdienstleistungen. One of the developments that he has introduced in the area of Controlling at MLP in the last ten years is an innovative concept for handling questions on strategic issues. As and when required, a work group known as the “Innovation Lab” is set up which has members who are freed from all other duties for the duration of the project. The company gives the team their own separate apartment where they can get together and be creative away from the business environment. In doing so, the company is more able to tap the full innovative potential of its employees.
Wilhelm Lipp, Head of Central Controlling, followed with a report on the successful steps taken at the Deutsche Bundesbank (German Central Bank) towards achieving a strategic focus based on a framework developed by Strategic Controlling. He stressed how important it is that management has a clear commitment to strategy as well as transparent internal communications in order to incorporate innovation in the management process.
What are the topics that controllers will be addressing in the near future? Professor Utz Schäffer opened the afternoon session by presenting the findings of the second WHU study on future trends in Controlling. IT and Efficiency remain at the top of the list of Top Ten topics. Compared with the findings of 2011, Business Partnering and Controlling Recruitment are the topics that have grown most in importance. Internal Communications and Cash Orientation are new to the list. This makes it clear that Controlling is undergoing a fundamental transformation process. Of the three tasks that controllers carry out to support managers, i.e. unburdening, supplementary, and constraining, there will be a significant reduction particularly in the unburdening task. This development has been prompted most notably by the pressure of improving efficiency and new developments in information technology which lead to a higher degree of standardization and automation as well as outsourcing to shared service centers. This development process has been largely completed at Henkel. The experiences and challenges they faced in the process were described in detail by Frank Tenbrock, Corporate Director of Henkel.
The experts’ discussion brought together Professor Holger Ernst, Chair of Technology and Innovation Management at WHU, and Andreas-Aristotelis Papadimitriou of the Dematic Group who offered an exciting, alternative perspective on the subject. Ernst stressed that innovations have a strong focus on results which is what makes a good idea into an innovation (“the Transrapid wasn’t an innovation”) and he gave a broad summary of the most important topics in innovation management, such as handling failure or overcoming organizational barriers. Papadimitriou continued by encouraging controllers to have the courage to overcome these barriers and he presented the successful developments in innovation controlling that he himself has promoted.