Creativity is a bit of a dirty word in financial circles, but it does have a role to play especially in the current environment where novel solutions are to be welcomed
Creative accounting was the bane of the 1980s and still sends a shiver down the spine of finance directors of a certain age. Before Terry Smith’s famous book Accounting for Growth lifted the lid on creative accounting in the private sector, the public sector had already been read the Riot Act by the Treasury, which clamped down immediately they spotted their strict rules being flouted.
For years the names of certain local councils were tarnished by association with creative treasury ideas that had overstepped the boundaries – that is until the baton was passed to those who had thought outside the box and creatively placed their money in Icelandic banks. It was the people who found ways of bundling up sub-prime mortgages and created new forms of credit derivatives who helped kick off the ongoing financial crisis. With such a history, you can hardly blame finance folk for being risk averse to all notions of creativity.
Or can you? In current circumstances, do we not need new solutions more than we ever did? Is the idea of creativity in financial management to be scorned out of hand?
For anyone looking to develop their career it cannot have gone unnoticed that many public sector organisations are now asking for innovation and entrepreneurship in their finance directors. One view is that they simply want to be told that there is an answer to the seemingly unsolvable set of problems currently facing them. Another is that it is a coded message – bean counters need not apply.
Whatever the precise motivation, there can be no doubt that extraordinary circumstances call for novel solutions. This leaves accountants with something of a problem as a profession. On one hand, a group of people whose training and experience has led them away from creative solutions; on the other, a set of clients and customers crying out for answers.
But to coin a phrase, creativity is not rocket science. Some of the most creative people in living memory were the scientists at Nasa, who in the 1960s were charged with sending the first men to the moon and bringing them back safely to Earth. They did it by strapping the astronauts to the top of an enormous tube full of the most explosive stuff they could find and setting light to the bottom.
Nothing particularly creative in that – it is what I would have done myself. The creative bit was in solving all the hazards that presented, and in dong so developing the science of risk management, without which all the technological creativity in the world (or out of it) would not have been worth a Roman Candle.
A big part of the issue is simply to get people confident with the idea of creativity. Our culture leads us to the belief that some people are creative and some people are not. We tend to use the word ‘creativity’ in connection with artists, very skilled people applying their craft in a way that creates something that touches our emotions in particular ways. In reality, of course, most creativity is more mundane than that and all human beings are creative more or less all the time – were that not the case we would all still be living in trees.
Experts think that lack of confidence is one of the key blockers to creativity, something that is often knocked out of us as we progress from child to adult. In training people for the ‘creative industries’ a lot of time and effort is invested in allowing people to get that confidence back.
Another common misconception is that creativity is all about sitting in a dark room with a wet towel wrapped around your head until ideas come. In fact, as everyone will have found at one time or another, creativity often comes in those moments when we are paying least attention to a problem, with ideas somehow emerging from the boundary between consciousness and the sub-conscious.
Many people know the story of how Paul McCartney woke up one morning to find the tune of ‘Yesterday’ already running through his head – his original working title for the piece, ‘Scrambled Eggs’ was even named after his breakfast. Bear this story in mind for the next time you boss tells you that you don’t appear to be working.
In fact, psychologists think there are at least three stages to a creative problem-solving process. The first is about understanding the problem thoroughly. And deeply, without which the thinking process is likely to be undirected and unfocused. Once thorough understanding is achieved, the problem starts to become part of the sub-conscious as well as the conscious, allowing the brain to deploy its full capacity. After all, the more difficult the problem, the less likely it is to be solved purely by analytical means.
The second stage is about seeking inspiration and coming up with ideas. This is where a bit of the wet towel approach may come in, but of course creativity is frequently not a solitary process and familiar techniques such as brainstorming are important. If you’re Einstein you can solve the problems of the universe through sheer mental muscle, deployed in the gaps between processing patent applications, but most people need a bit of help.
Thirdly, no creative process is complete without execution. This begins with sieving the ides that have come out of the creative process and testing them to see which might be practical and deliverable, selecting the best ones, and then working out how to put them into practice. For creative ideas in the field of financial management, it is at this reality check stage that risk management comes in.
All of this may seem a bit obvious, but stepping back one realises that at least two of the three parts of the creative process – understanding problems and delivery planning – play directly to the skills and experience of finance people. The third, the bit we tend to think of as difficult, is just part of being human.
So there is no reason why finance people should worry about creativity, and their ability to innovate. It is all a matter of understanding the problem, finding the right environment and the right colleagues to spark off, and being able to recognise the quality ideas and work out how to execute them.
Alan Finch is senior finance analyst at Tower Hamlets Council
