Innovation: the real story


There is a fair bit of romanticism about innovation (usually from outside of business). It is often thought (usually by people who are not accountable for providing returns on shareholder capital) that innovation is a strategic jump, a significant invention or a major discontinuous development. People do not realise that these strategic jumps are very risky business and most fail. The same people often bemoan the apparent reluctance of Australian capitalists to grasp the ˜obvious opportunities and run with them. Our experience is quite different.

We have found that in Australia business innovation is, in fact, an intensely practical process requiring managerial leadership. It requires the purposeful and often step-by-step building of capabilities in enterprises to institutionalise the capacity to innovate . From a business perspective, innovation is really about creating new value for money . To do this well, the best innovators focus on the right type of business model (consisting of strategy, products/processes, organisation and people) to create the value they seek.

Second, science and invention are not the main source of innovation in small and medium- sized businesses. It is true that they play an important role in making and sustaining long- term change. There are some real examples of great success in this area, including Cochlear and Resmed, and their stories are something to be celebrated. It is also true that, as a nation, we probably do not do enough commercialising of invention. The real prizes for a business, however, will not come from invention. Success will come when everyone in the business is engaged in innovation, has an increased understanding of their customers, and are organised so that their talents and knowledge are effectively harnessed.

Third, managerial leadership plays a vital part in building innovating enterprises. Leadership provides the framework for focusing creative energies, sets the standards for taking risks, and is accountable for ensuring innovation is both an organisational behaviour and a systemic capability.

Fourth, front-line employees have much creativity to contribute. The challenge for many small and medium businesses is to unlock this creativity and align it with business objectives. This becomes a difficult challenge when companies are growing rapidly . Managerial leadership of a much higher level of capability is required.

The task of transforming a medium-sized business into an innovating enterprise does not happen by chance and does not happen overnight. The transformation is a deliberate and purposeful process based on an agenda that is strategically focused. It is embedded in the business strategy and aligns and improves the four areas of strategy, products/processes, organisation and people.

Transformation requires a systematic and patient commitment to building the innovating enterprise and must come from:

  • The owners who provide the risk capital and expect to get a return from a well-managed process.

  • The executiveswho provide the strategy and the energy to implement the right game plan.

  • The leadershipwho work with people in the business to mobilise their contribution and provide direction where needed.




Innovation and Imagination at Work 2004
Innovation and Imagination at Work 2004
ISBN: N/A
EAN: N/A
Year: 2005
Pages: 116

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