Just how do you become “innovative”?
Innovation! It's a term that's thrown around business meetings all over Australia. You've probably heard the words "we need to be more innovative" on a number of occasions, as companies try to break out of the routine and stand above the crowd.
If you're unsure whether you have the business governance and information management foundations that make a difference, you don't.
However, it's a rather unhelpful term. Trying to "be innovative" is about as useful as trying to be creative; without a spark of imagination and an ability to analyse the market to find potential gaps, it's simply an exercise in sitting around thinking.
And yet, the purpose of innovation and the results of innovating successfully make it an important focus for Australian organisations. But how on Earth do you do find this competitive advantage?
For many, it comes down to research and development (R&D). Though before anything, it starts with information management. After all, you can't develop without research, and that requires analysis of market trends, pricing strategies and countless other criteria that will form an innovation strategy.
Australia lagging
The Department of Industry, Innovation and Science's (DIIS) 2015 report on the matter of innovation suggests R&D is becoming a greater focus Down Under. Businesses across the country know that they need something different from the rest of their competitors, so gross expenditure on R&D as a percentage of GDP reached 2.12 per cent in 2013 – a leap from the 1.48 per cent at which this figure stood at the turn of the century.
Organisations that undertake R&D initiatives are "more likely to report large increases in sales and profitability".
However, despite the extra money going towards developing new services and products over the past few years, Australia has started lagging in the innovation stakes compared to overseas competitors, the DIIS explained.
Business expenditure on R&D is 218 per cent lower than the top five OECD countries in the world. In an increasingly globalised world, where growth is not restricted to our own shores, organisations need to be innovative leaders, or risk being washed away by the competition.
That's not to say innovation through research and development should be ignored – just refined. The DIIS report indicates how organisations that undertake R&D initiatives are "more likely to report large increases in sales and profitability". So what's going wrong?
Putting the R back into R&D
There's no point in developing anything without significant research. It's the equivalent of tying your laces before putting your shoes on. Business leaders may think they're doing enough in this regard, but are they using their information to their full capabilities?
Research is entirely reliant on analysing the information that's out there.
Research is entirely reliant on analysing the information that's out there. When decisions are not based on good research, it's unsurprising that Australian organisations are lagging. That's why before 'innovation' is even attempted, it's important to make sure your business has the right management structure for all its data, information and knowledge.
In short, it's taking the logical steps to R&D – developing true business governance, researching the market and gaining insight, and then acting on a strategy to give it the best chance of success.
If you're unsure whether you have the business governance and information management foundations that make a difference, you don't.
Making stronger decisions
Information also allows leaders to act with less fear and more confidence. Recent research from Amway suggests that as many as 70 per cent of Aussie entrepreneurs have a fear of failure that restricts their decisions.
Business leaders can use valuable insights to make stronger decisions. It all starts with information – perhaps the most valuable business asset, and one of only four a leader can rely on.
While, at the moment, Australian businesses are spending more on innovation and still lagging, with access to the right information, we can turn these stats around, spending less on more.
