Innovation: the lifeblood of business success
What do Lonely Planet, Ferguson Plarre and Microsoft have in common? A whole lot, according to Professor Danny Samson of the Department of Management and Marketing: innovation, both in products and in business structure, is order of the day for these corporate entities.
Professor Samson recently conducted research into the role that innovation plays in business success. His report, Innovation for business success: Achieving a systematic innovation capability, investigates the ways that both small-scale and large-scale businesses use innovation to maximise profits and efficiency.
Before you think that innovation is one of those business-speak buzz words that translates to not-a-whole-lot for ordinary people, innovation can improve the outcomes and results for every industry and sector. From teachers to plumbers and everything in between, innovation is a key strategy in reflecting on shortcomings and devising a method to improve and develop.
“Innovation is about doing things better,” Professor Samson says,
“It goes hand-in-hand with human evolution. We are always trying to improve, and innovation is about doing things differently and better.”
Without cluttering the issue with intricate complexities or jargonistic pie graphs, Professor Samson distils innovation to its simplest form: “It really is as easy as trying new things.
“It gets easier yet,” he says.
“Innovation doesn’t necessarily mean patenting new products and inventing novel business structures. It doesn’t have to be entirely new to the whole world, if it’s new to the customers and marketplace, then it is innovation.”
For instance, Lonely Planet didn’t re-invent the wheel when they started doing television shows and creating iPhone applications. Harnessing new technology and creating a transportable ‘app’ for travellers on the road in Paris or Peru was new enough to the industry, and has resulted in significant profits. And it all started with a little in-house brainstorming.
Examples of successful innovation can be found anywhere.
“Almost any business or product that has flourished in the market has been influenced by innovative practices,” Professor Samson says.
“Think of an Apple iPod or iPad, flat-screen televisions or even Google. They have all broken out from existing markets and supplied something resoundingly new to consumers.”
This research thwarts the maxim, “If it’s not broken, don’t fix it”. Instead, his findings suggest, “If it’s not broken, make it even better.”
“Areas for businesses or organisations to look at or revise involve priorities and resources, measures of performances, rewards and recognition for staff and then behaviour and culture,” he says.
Employing innovative strategies, which often yields groundbreaking results, doesn’t involve shattering the entire foundation of your business: merely reassessing practices that are not working, and formulating revisions in line with customer demand, changes in technology or new ideas.
Professor Samson gives two tips to Australian businesses, to help improve innovation and as a result, profits.
“Firstly, great businesses invest in new offerings – in terms of products or services – for their customers. So, be sure to update and modernise to keep your business relevant and at the forefront of the market.
“All investments can be risky, however, so it is best to do your research.”
The second piece of advice for businesses is to cast an innovative eye upon existing processes and the organisation of the business itself. Professor Samson suggests, “It is obviously good for business to be as efficient as possible. Businesses should engage in refining internal processes to improve services and reduce running costs.”
When innovation becomes imprinted in the “DNA of a business”, employees begin to perform their everyday tasks looking through this new lens. Not only are employees carrying out their expected duties, but the change in mindset means that workers are opportunistically looking for new and innovative ways to find additional profit and improve efficiency.
Creating a business with innovation as a core value and behaviour often boosts worker morale and makes for a more rewarding workplace. “Innovation taps into people’s creativity and gives them a sense of satisfaction when they create something new and improved. It’s a fantastic dynamic to have in a workplace.
“Additionally, when a business, small or large, gains a reputation for having innovative products and practices, it makes them a very attractive employer. This helps businesses to win in the labour market, and attract the best talent in the field.”
It is a mistake to think that innovation is the domain solely of big companies. “In fact, small businesses can be even more flexible and entrepreneurial than large companies. This naturally lends itself towards innovation,” Professor Samson says.
This report has shed a new light upon business innovation. The principles and findings of this report were used by the Department of Innovation, Industry, Science and Research to develop policies and brochures to support Australian businesses.
Reflecting on the context of Australia’s business landscape, Professor Samson says, “Australia is a high cost country. Businesses here have high overheads and running costs. We don’t have better service or quality than other countries.
“The thing that can give Australia the competitive edge, however, is innovation. Innovation is the ultimate weapon for all Australian businesses, large or small.”
For a copy of the report email Professor Danny Samson