THE REALITY OF INNOVATION UNZIPPED - INNOVATE OR EVAPORATE

The message was loud and clear from middle market companies in the recent Deloitte and Australian Business Foundation investigation: innovate or evaporate. 

More than 50 companies participating in the joint study, The Reality of Innovation Unzipped,  defined innovation as 'the clever use of new ideas and ways of doing things in order to add business value and deliver hard targets and specific outcomes'. 

The study indicated that it was not the supply of creative and innovative ideas that was at question - that is a given in a nation of early adopters and technology integrators.  Participants believed the challenge was to ensure a repeatable and rapid means of converting ideas into business value. 

To meet this challenge the participants agreed innovation needed to be seen as a core component of an organisation's growth strategy.  It also needed to be managed like any other process within the organisation with the necessary targets, funding, resources, accountability and skills to convert innovative ideas into business and speed up return on investment. 

The companies involved in this qualitative study agreed innovation is not something you do only if you are an enlightened firm, 'it is something you do because you have to...to survive.'

All agreed they can no longer get by competing on cost or price, or even just on quality.

Narelle Kennedy, Chief Executive of the Australian Business Foundation said "Australian businesses understand that competiting on the basis of knowledge and innovation rather than cost is a decisive factor in achieving competitive advantage."

Key messages emerging from the Australian Business Foundation Deloitte investigation were:

• Innovation is more pervasive in Australia than we think
• Innovation is the active ingredient in transforming businesses
• Innovation is driven by markets and customers not just new products and technologies
• Innovation harnesses creative thinking in a disciplined way to solve a real problem.

Deloitte Growth Solutions partner Julia Bickerstaff said the study confirms that courage, vision and leadership are required for companies to be innovative.

Deloitte is a recognised leader and award winner in innovative practices and believes successful innovation starts with the CEO and is woven into business strategies.

"Deloitte recognizes that innovation is a people process.  As a firm we are committed to coming to grips with the innovation process ourselves before taking our tried and tested offering to help Australia's middle market grow and proper in sustainable and creative ways.

"The investigation showed that truly innovative companies have dedicated systems and tools to support the innvovation process.  The participating companies and case examples in The Reality of Innovation Unzipped found that many of their best innovations come from interactions with their customers and analysing their customer behaviour," Ms Bickerstaff said.

The participants in The Reality of Innovation Unzipped study identified seven major insights into innovation in businesses in Australia:

1. Innovation energises business growth and creates value
2. Innovation fosters imaginative business models
3. Innovation needs partners
4. Innovation must be disciplined to contribute to competitive outcomes
5. Innovation motivates people
6. Innovation is highly context specific: one size does not fit all
7. Innovation is multi-faceted and complex, yet must be repeatable

The difficulty identified was being able to sustain that innovation edge, acquire the right skills to convert innovative ideas into business and speed up the return on investment.

The case examples in The Reality of Innovation Unzipped are Australian companies that have successfully applied one or more of the innovation insights to grow their businesses.

"Australian businesses understand that their competitive advantage comes not from cost-cutting, but from competing on the basis of innovation, distinctive know-how and collaborative business relationships," Ms Kennedy said. 

"In fact, innovation only results in sustained productivity and prosperity, for both companies and nations, when it involves transforming the way business is done.  This is a challenge that the leaders of both businesses and governments share," she said.

"To take Australia's innovation journey forward, middle market firms believe business and government need to collaborate to create an environment that helps smart enterprises innovate - that is, pursue new opportunities and manage the risks and uncertainties that are inherent in any innovation.

Visit www.deloitte.com.au and www.abfoundation.com.au