Just before Christmas, KPMG published its report, Keeping us up at night: the big issues facing business leaders in 2018.
200 businesses, drawn from across industries, and comprising ASX200+ companies as well as SMEs responded. The results are not surprising – the Top 10 concerns for all Australian businesses are:
For SMEs and the mid-market, regulation took third spot, with government efficiencies fourth and concern over energy costs fifth. But there’s no disputing the number one fear.
According to Partner James Mabbott, Head of KPMG Innovate, pressures on Australian business have increased. Two significant events have taken place: American giant Amazon recently launched in Australia, and the Tesla battery in South Australia has gone live. At some point this year, Facebook may allow its 15 million active Australian users access to its Facebook Messenger service for payments.
These events may herald a new wave of change and transformation across the banking, retail, and energy sectors. To stay afloat, Australian businesses need to get their digital and innovation houses in order. Yet whilst “digital” has certainly gone mainstream, innovation is an area where we continue to lag as a nation.
Why? The real innovation challenge facing our businesses is cultural, and changing culture requires leadership. How do we talk about innovation? What do we say at board meetings, with our people, and in our communities? And how do we act? Is there alignment between what gets said and what gets done?
The first thing to do is to make a commitment to innovation. Make it clear inside and outside your organisation that innovation is important. This commitment must also be backed up by providing funding, access to tools, and setting measures that reinforce desired behaviours. Remuneration processes and goals for both leaders and staff need to reflect this desired outcome. Innovation must connect back to your business strategy and what role everyone in the organisation plays in terms of idea generation, experimentation, and distribution of innovative solutions.
Your organisation also needs to make it safe to innovate. This means looking at how you deal with failure and risk-taking. By being curious we create the opportunity for change, for spotting growth opportunities, customer trends, new developments in technology and listening to our people.
To innovate effectively means establishing a dialogue where leaders effectively communicate to the broader organisation where and how they want to innovate, and the tools and support available. This means listening to the ideas our people have and being open to their input and perspectives.
Our people are often closest to customers and will see opportunities that are not immediately apparent to executives. This is where in-house crowdsourcing, hack-a-thons, and accelerator programs can give people a voice and opportunities to contribute to the future growth agenda of an organisation beyond their day-to-day roles.
If Australian businesses want to allay their fears about disruption, we need to tackle the Innovation Agenda now.
Rob Bazzani, National Managing Partner, KPMG Enterprise