While Australia’s business leaders recognise the importance of innovation, barely a third consider their own business to be innovative.
The findings, revealed in Canon Australia’s Business Readiness Index, show that most businesses aren‘t doing enough to drive innovation, with 40 per cent implementing just one innovation initiative. While challenges vary by business size and across industries, a lack of budget is perceived as the biggest inhibitor and resistance to change also features prominently.
On the flipside, highly innovative companies are distinguished by their strong culture of innovation that permeates business units and empowers individuals to drive new ideas and ways of working.
Money isn’t everything
Treasurer Scott Morrison wielded both the carrot and stick in the 2018 Federal Budget, but the decision to cut tax concessions for research and development was out of step with the government’s commitment to boosting innovation. Yet for many businesses, there are problems closer to home.
The study found a range of emotional barriers that hold organisations back from implementing measures to drive innovation. For medium to large businesses, conflicting agendas and a breakdown in communication are cited as the biggest struggle for 63 per cent (medium) and 70 per cent (large) respectively. Self-doubt is a knife in the side for half (49 per cent) of small businesses, where leaders lose faith in the value of original ideas over time.
“Bigger budgets are viewed as a magic wand but businesses are made up of real people with real emotions,” Gavin Gomes, Director of Canon Business Services, said. “It’s telling that internal barriers play a critical role in holding businesses back from an innovative future. Self-doubt, conflict, denial, pride and diminishing excitement are all real hurdles to overcome. These feelings often increase with business size.
“To overcome these barriers, businesses need to focus on the opposite emotion – belief. Belief is undermined when people see the wider industry innovating faster than their business. Leaders are responsible for delivering tangible changes that show progress is possible. Throwing money at a problem doesn’t always set your business up for success,” Gomes added.
Size matters less than intention
The report reveals that for small businesses it is staff and budget limitations that are holding them back from bringing their vision to life. They also feel less supported by government when it comes to funding, policy and access to talent.
Larger organisations, on the other hand, feel more internal pressures, which could be due to increasing bureaucracy and conflict. More than half (54 per cent) of employees in these larger businesses feel unmotivated when it comes to innovation, while a whopping 42 per cent dismiss it as a buzzword.
“It’s a myth that smaller businesses can be more innovative because they’re more nimble, just as it’s a fallacy to assume that larger businesses can be more innovative due to their greater resources,” Gomes said.
“It comes down to how the organisation is set up and how new processes are introduced so they don’t cannibalise other parts of the puzzle.
“Hiring the right people is a great place to start, and it is important to build a diverse workforce in the process. Innovative companies prize people who show initiative and have good communication skills – across myriad backgrounds, experiences, skills and, importantly, age. They will drive meaningful change no matter how large or small an organisation is,” Gomes concluded.