What innovative businesses do differently

Innovation has been at the forefront of the national agenda for some time, increasingly so since Prime Minister Malcolm Turnbull ushered in the “Ideas Boom” in late 2015. At every level of every business, whether SMEs, not-for-profits, start-ups, sole traders or Fortune 500 listed companies, innovation is essential to stay relevant and keep ahead of competitors. By Chris Brell

The 2017 GiveEasy Innovation Index was released in May, supported by Westpac, Australia Post and the Australian Graduate School of Management (AGSM). The Index measures innovation in the not-for-profit (NFP) sector, assessing eight vectors of innovation: internal collaboration, organisational velocity, culture, rewards and recognition, technology, external collaboration, innovation focus and stakeholder centricity. Based on self-assessment of these eight pillars, a total innovation score is calculated. While the Index focuses on the social sector, its research is useful to all industries.

Westpac is dedicated to supporting businesses and individuals to embrace innovation, including through its support of the Innovation Index to help the NFP sector and its Businesses of Tomorrow program, which is supporting 200 businesses to shape Australia’s future.

The 2017 Innovation Index saw a significant increase in innovation performance in Australia’s NFP sector, up 9 per cent since 2016.

Since the first Index in 2015, innovation has increased each year, demonstrating how the industry is deepening its understand of the value of innovation. The greatest growth was seen in Stakeholder Centricity, which rose by 11.5 per cent since 2016.

Our vision is to be one of the world’s greatest service companies, and as customer expectations morph, we aim to harness innovation to find new and meaningful ways to address their needs. Stakeholders should be at the centre of all businesses and it’s impressive to see NFPs have embraced this.

Within the NFP sector, the key barriers to innovation were identified as Access to Funding, Culture and Organisational Velocity. The NFP sector faces intense competition in a crowded marketplace, as is the case in many sectors. Innovative ways of thinking to set the business apart from competitors is often the key to winning business and attracting new customers. Being innovative in regards to stakeholder centricity can be the difference in maintaining those customers.

Innovation is often not seen as a business priority as it can be perceived as costly and timely with a low return on investment. Yet, innovation is essential for preservation and to adapt and thrive in the new economy. Too many businesses and industries have been left behind by digital disruption as they underestimate the risk that new ventures present.

Businesses that scored low across measures  of innovation reported an absence of a clear strategy and senior leadership vision as a major barrier to innovation, the greatest barrier after inadequate funding.

This demonstrates the importance of executives to prioritise innovation, and make innovation central to the businesses core strategy. However, innovation should not only be implemented top-down but also needs to come from the bottom-up, creating a workplace environment where staff at every level feel empowered to do things differently and present their ideas.

This is where the culture of the organisation is critical. Creating the right environment where collaboration and innovation thrives will foster a sustainable innovation agenda creating value beyond immediate needs. Staff who feel encouraged to think laterally and take calculated risks feel more satisfied, reducing turnover, and ensuring collaboration thrives.

Often when businesses consider improving innovation, the starting point is upgrading technology, which is quickly dismissed for being too expensive. It is, however, also important to consider technology as an enabler of innovation, not the sole or key driver. Yet, there are many cost effective ways to implement innovation which are often overlooked. Culture, collaboration and customer service can be the difference between a business that remains stagnant and falls behind competitors, or the business that expands into new segments and reaches more customers.

Business collaboration can create new opportunities to drive shared innovation and can be an important source of support, advice and access to new networks. Westpac’s Businesses of Tomorrow program is designed to help 200 Australian businesses network and collaborate, as well as benefit from the opportunities that Westpac’s connections can provide.

An example of a business that incorporates innovation into every aspect of its operations is Thankyou. Thankyou was recognised for its innovation as it was ranked the top innovator for 2017 based on peer review in the GiveEasy Innovation Index.

Thankyou was founded on an innovative philosophy; what if the profits from purchasing everyday items like bottled water, food and body care products could go towards the millions of people living below the poverty line? Nine years later and Thankyou has continued to think differently, and has now expanded to produce over 50 different products and has launched a baby range to help fund child and maternal health programs around the world.

“Innovation to me means challenging the system; the way things have always been done before. We see a lot of people making ‘improvements’ on ideas but true innovation is about forging a new path and going boldly where others haven’t before,” said Thankyou co-founder and Managing Director Daniel Flynn on how Thankyou stays ahead through innovation.

“To innovate you’ve got to be prepared to go big and fail hard, then learn and go again. You need to remove the culture of fear that sits around failing, and as a team be prepared to live outside your comfort zone every day,” said Daniel.

Innovation is a constant learning curve. At Westpac we’re offering support to businesses through our Businesses of Tomorrow program, grants for NFPs through the Westpac Foundation and the Davidson Institute produces resources to help businesses expand their innovation capacity. We look forward to continuing to support the GiveEasy Innovation Index and hope to see even greater increases in innovation in the NFP sector in 2018. 

Chris Brell is Head of Industry Innovation at Westpac Group

Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.

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