Australian businesses are in two minds about innovation according to a new report by American Express, The Economy of Shopping Small.
On the one hand, 43% do not believe they are innovative; on the other, 57% overwhelmingly believe that innovation drives the success of their business. This is reinforced by another report, this time from IDC (Australia’s SMB study 2015) that found that most small companies see new technologies as a massive opportunity.
For companies in the space who are concerned, here are three suggestions from my experience of working in the sector about how to address this.
1. Change Board Agenda:
Boards, even of small to medium-sized companies, spend a significant period of time on compliance and operational issues. If you have a board, review the agenda and get agreement to have meetings dedicated to strategy every alternate meeting rather than annually. Try changing the format: for example, start with a blank sheet of paper, look at adjacent industries but do not dive into budgeting too soon. If you do not have a board, consider setting up an advisory one including people from outside your industry.
2. Make time to explore:
Australia is going through an extraordinary period a capital raising for innovation. Smaller companies need to make time to get connected with this yet many CEOs typically spend their time dealing with internal problems. The way to break this cycle is to set aside a specific amount of time to get connected to this thinking. It could be a trip to one of the many accelerators or angel investing networks; linking up with industry growth initiatives, academic institutions or even an overseas trip to Silicon Valley or Israel with someone like the Chamber of Commerce. The key is to spend a period of time, say 10% or one day a fortnight, simply exploring innovation.
Five ways to successfully face digital disruption by Jeanne Ross (Center for Information Systems Research)
Digital disruption: The crucial question to ask your business
3. From Business Development to Corporate Development:
Business Development usually has a pipeline, opportunities and tenders. However, the pace of change in technology means that your competitors today will not be your competitors tomorrow. Accordingly, companies need to open themselves up to more corporate development, by which I mean, partnering with others to provide different solution, linking with technology providers to obtain a new sales channel or placing the product/service on-line at a radically different price point
Businesses can find the constant chatter about digital disruption off-putting or just scary. By changing the board agenda to focus on strategy, by setting aside time to explore innovation and by shifting to a corporate development rather than business development focus, business can examine the implications in a controlled manner.
Try it for six months and then review. There is much to gain and little to lose.