Recently we have seen more clients and companies start down a path of innovation. Obviously there have been many innovative businesses in Australia’s past; however, the nature of innovation and what it takes to stay on top or even close to the top of your market has changed.
Australian businesses are no longer isolated geographically. This means other global players can disrupt their domestic market dominance.
And because many enterprises have learnt that survival depends not on dominating one product category but through profitability from a diverse portfolio of products, they are exposed to new entrants innovating across their portfolio.
We’re seeing established businesses taken to the wall in what seems like the overnight success of another company. Often, these new entrants can come from outside their industry or field of view.
Take battery technology and Tesla, or Uber and Google with the driverless car. The car companies can look to their competitors and see that everyone has a ten-year strategy to maximise the efficiency on the combustion engine. They know the market and the limitations, so therefore they know the status quo is fine for the next ten years. We can all see where this thinking has taken them…
Now add to the mix that in the US for the first time a new generation does not value buying a car and claiming their freedom like so many previous generations. The R&D spend required to leapfrog the early innovators in new battery technology is likely to be a very significant percentage of their turnover. Can they afford to risk 60% of that turn over on catching up? At this point the shareholders might just ask to “take the money thanks, Eddie.”
So, to Australia.
We are a lucky country that has had quarter after quarter of growth, and so we rode the waves of the global recession like no other country. However, today’s success can be the enemy of tomorrow’s success. All too often we are talking with companies that have enjoyed a nice market position…until now. Right now their products are starting to flounder in the market place. New entrants have arrived and even entirely new markets have emerged across the globe.
We are now seeing many large businesses start to wake up to the changing business landscape. They recognise the need to be doing something to bring new products and services not only to market but to the market differently.
Unfortunately, there’s a propensity in today’s business ecosystem that these activities are enough to be considered as ‘innovation’ without producing tangible outcomes. Businesses genuinely want to survive – but unfortunately, they are operating under a false sense of security from this trend.
For innovation in the Australian context there is no silver bullet and you need to be proactive if you want to find a winning idea. Australians love to gamble and this is what many companies are doing with their innovation strategy (check out our video on Innovation Gambling).
We know that a systematic approach to innovation increases the likelihood of success. There is no ‘one size fits all’ method that guarantees a win. However, you can measure and monitor your progress on your innovation activity so that you can increase your return on innovation investment. This managed portfolio approach de-risks the game.
What if someone has found a formula that could positively improve your return on innovation activity and investment? What would be different if your job, position on the board and your retirement income all were able to be positively impacted by innovation? Would you want your company, your share portfolio, and the companies you manage to start delivering?
If the answer is yes, then call us on + 61 (07) 3041 1128 to establish an innovation strategy and plan that will drive a return on your innovation investment.
– Cameron Johns, Innovation Manager – Programs