Innovation not core for majority of Australian businesses
Innovation is not core for 75 per cent of Australian businesses, yet nearly two-thirds of business leaders believe they have the capability to drive innovation programs, a business technology provider revealed.
Ricoh, a provider of smart workplace technology, recently announced the findings of its Workplace Innovation Index, a new look into the challenges Australian organisations face with driving innovation and adapting to change.
In a survey of business leaders conducted on behalf of Ricoh by StollzNow Research, only one-quarter believe innovation is core to their business. However, a solid 40 per cent believe they must innovate for survival. Additionally, nearly two-thirds of business leaders believe they have the capability to drive innovation programs.
While slightly more than one in four business leaders (26 per cent) say innovation is important, they concede the organisation is tied down with a need to focus on current operations.
"In today’s rapidly changing economy, innovation is a must and should not be seen as a ‘nice to have’ or a ‘department’," Ricoh Australia CEO Andy Berry said. "The research reveals significant disparities between what Australian organisations are pursuing and what is seen as important.
"We know innovation can deliver operational improvements and new business opportunities, but we’re not elevating its strategy value, from the boardroom to front-line staff."
Australia trailing behind
According to the 2018 Global Innovation Index, Australia ranks down at number 20 in the list, behind much smaller economies such as Ireland and Luxembourg. It is also the first in the list to be rated with an income group ‘weakness’, with an overall score of 52.00 (68.40 is highest, 15.00 is lowest).
In Australia, Ricoh’s Workplace Innovation Index scores Australian companies 68 out of 100. The index is an average of key workplace efficiency and innovation attitudes, including attitudes towards innovation; processes for evaluating needs of staff; internal processes; the value of collaboration; and senior management’s vision for introducing innovation programs.
"While the Australian business climate is faring well, we are not exploiting innovation to its full potential," Mr Berry said.
Required level of clarity lacking
The Workplace Innovation Index also shows that 60 per cent of Australian organisations do not have a required level of clarity around systems and processes, which is holding back increases in efficiency.
Furthermore, nearly twice the rate of senior executives are more likely to feel internal policies and processes are ‘clear and consistent’ compared with their line of business manager colleagues, indicating a clear disconnect.
Worryingly, Ricoh said, nearly two-thirds (61 per cent) of business leaders report productivity loss when new systems and processes are introduced.
The research also points out that collaboration and cultural change are required to bridge the gap between innovation skills and outcomes.
According to Mr Berry, the culture of any large organisation cannot be shifted unless the people are willing to change, no matter how solid your business case or how stark the threat of disruption.
"The best thing we can do as leaders is to answer the big inevitable question: why? The clearer we can explain why we are changing, where we are heading, or how we will get there, the more our people will trust us to lead them there," he concluded.
Innovation is a key driver of productivity
In its most recent Small Business White Paper, the Institute of Public Accountants (IPA) recognised that local businesses face a wide range of barriers to innovation, suggesting that policy to support innovation needs to be flexible and broad-based.
Talent, not technology, is the key, the IPA emphasised, warning that if wider skill requirements are not addressed there are likely to be bottlenecks created downstream in the process.
“Technical skills across the workforce, and particularly interdisciplinary skills that bridge areas of expertise, are particularly important for innovation and are often subject to market failures,” the IPA added.