Recently, I attended an Australian Institute of Company Director's Fellows' Lunch, which was sponsored by BDO. The event was comprehensive and attended by some of the most interesting players in the technology sector. It explored the topic of organisational innovation and digital disruption, with the aim of better preparing company directors for embracing change within their business.
Key takeaways included that we should consider innovation in broader terms than just technology, the process of experiential learning in innovation and how Australia can catch up to the rest of the world.
1. Redefining Innovation
It's a common misconception that innovation and change is about new computers and electronics - essentially just a matter of technology. It's not. Innovation can mean anything, from processes and procedures to people. It’s important that organisations understand what influences their workplace culture and how to embed innovation into their organisation’s DNA. It means thinking differently about the way things are done, which can sometimes involve using new technology, but frequently requires a different approach to assessing workplace culture and changing behaviour rather than systems.
For directors, the key message here is that they need to be considering innovation in their company as extremely broad.
2. Australia needs to catch up
Australia is 20th on the World Intellectual Property Organisation, INSEAD and Cornell University's Global Innovation Index - we should be much higher.
Adapting to the latest industry trends requires an enormous commitment to research and development (R&D) spending, but the size of Australia’s domestic market means this isn’t always a viable pursuit. Our relatively small population means it’s rare for a locally developed product to earn its R&D costs through domestic sales alone.
One way to overcome Australia’s limited population is global expansion. For example, an innovative product or service that takes off solely in Australia has a maximum audience of around 25 million, whereas the USA has a population exceeding 300 million. For two products with a similar cost of delivery, making the move from the domestic market to a foreign one can make a significant financial difference.
For many decades Australia has lagged because we have a robust economy and commodities to export - we haven't needed to innovate in the same way as some other countries. But participation in other economies means that Australian enterprises will need to firstly catch up to the innovations from the rest of the world and then innovate ourselves.
3. We can do this through experiential learning
One of the speakers, Beau Leese, discussed the need for experiential learning in innovation. It's all very well educating your workforce or hiring an educated workforce, but those who are going to be innovators need to go through experiential learning - instead of just considering theories, you need to immerse yourself in real experiences and continually apply those theories in practice. Even if you hire someone with appropriate qualifications, this shouldn't be the end of the journey. Applying and testing theories in real life by encouraging a culture of experimentation is therefore essential.
Many believe large organisations with big budgets are the only ones that can afford to innovate. However, because experiential learning requires you to be in the everyday running of the business, it's often mid-market businesses and individuals that are more involved. Meanwhile, larger enterprises may be able to afford an innovation team, but if they don't understand the day to day of the business, they won't understand how to innovate effectively.
Innovation is essential to survival. This means experimenting in a broad range of areas - experimenting in people, processes and procedures as well as technology. What you must remember to do, however, is fail quickly - try new things, but if they aren't working, give them up before it's too late.
Planning for long-term success
While we see a lot of talk about innovation, it doesn’t always translate into anything tangible for businesses. To turn intent into action, BDO can help guide organisations through the varying lifecycle stages of growth. Businesses in the early phases can meet with members of our tax and research and development teams to see which grants are available, while the advisory team can setup a business plan. Once they grow, we can help them raise capital in the market and prepare for further growth.
I look forward to continuing to discuss the topic of innovation with my clients and attending future AICD Fellows’ lunches. If you have any questions, please feel free to email me at firstname.lastname@example.org.