Innovatia

will not drive the desired outcomes and may even hasten a cultural decline. In the past two decades, Australia has emulated many global models. We have spent big on incu- bators, accelerators, innovation labs and funds. Businesses and government green lit these initi- atives, believing they would lead to high-growth models on the side without disrupting the status quo seen in companies like Amazon that contin- ue to lead the world in return on R&D funding. To replicate this example, other businesses would need to remove dividends so that capital could be invested into the rebuild of foundational infrastructure and shift the focus from risk reduc- tion to core innovation. The two biggest mistakes in business were trying to run new models on top of legacy foundations, and assuming the custom- er base would be converted into new models by direct marketing. The very few success stories from this approach reduced both the willingness to innovate and the level of investment. Big business in Australia was not comfortable with failure and did not consider it necessary to driving innovation across the organisation. Un-

like many governments across Asia, the Austral- ian government did not support new products and services. As a result, many Australian busi- nesses lag international contemporaries in de- veloping unique intellectual property and highly innovative business models. Key skill sets flowed overseas to environments “As we work towards an innovation culture, two things must be inevitable in business: transformation – technological and otherwise – and failure.” where new ideas were accepted and supported by vigorous funding ecosystems. In Australia, an innovation mindset is required to reduce reliance on natural resources and strengthen the econo- my against the impact of fluctuations in demand. Business in Australia requires an energised

transformation effort. Operating-model transfor- mation is key to ensuring the success of Australian business against competitors with better access to funding and technology. Technology transfor- mation is also essential, and if the core technol- ogy is no longer fit for purpose, then disruption is inevitable. Business must have the capacity for core innovation in order to drive two factors: a lower-cost technology transaction and the ability to deliver cost-effective business advantages. In focusing on operating-model and technol- ogy-foundation transformation, businesses will undergo a reset period, develop a culture that considers innovation a core competency, and ar- rive in a position to compete, but commitment is essential. Businesses need to accept failure as the cost of building an innovative enterprise. Finally, businesses should articulate a moat in detail, which should become the business mis- sion and the desired outcome of a transformation effort. This requires that the company innovate the operating model and the technology founda- tion of the business, and ultimately establish an active culture in which innovation is once again

a core competency. This new enterprise will be a beacon for inspired leaders, present and future. Sammy Kumar is the Co-founder of Sayers Group, an advisory, innovation and investment business, purpose-built for the new economy. Prior to this he was Managing Partner for PwC Australia’s Enter- prise Business, Strategy and Transformation, and its Asia practice.

HTTPS://YOUTU.BE/47MTG-WSKNK

Video: Tim Brown, CEO and President of the de- sign consultancy IDEO, describes the key build- ing blocks – from an open mind to an empathic approach to business.

INNOVATIA

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