The importance of being innovative | Sydney Morning Herald 15 Feb 2012

by Josie Gibson

A news editor pulled me aside once, after I had made a big editorial call, and said: “In future, I want us to be the second outlet to run a breaking story like that.”

Being chided, however tongue-in-cheek, rankled. I hadn’t landed us in hot water, it was a calculated risk. His words stuck with me over the years as exemplifying Australia’s risk-averse culture.

We like to win, to lead the pack, but we feel vulnerable out front. What if we fail?

Later, working with seasoned executives, I was fascinated by discussions of leadership, strategy and decision-making. The global financial crisis separated the best from the rest as leaders were forced to make tough decisions fast, based on less-than-perfect information, throwing out the rule book without sacrificing  growth potential.

Like it or not, crisis mode is the new norm. Today’s operating environment is hyperconnected, volatile and fragmented. Technology is a major driver, but the changes are more profound and the implications for Australia are far-reaching. Sections of our economy might be cushioned by resource wealth and Asia’s growing markets, but such advantages are selective and finite.

The key is innovation and, depending on your perception, in Australia it’s either a massive problem or a golden opportunity.

New research by global corporation GE underlines Australia’s quandary. The GE Innovation Barometer found that while 86 per cent of Australian business leaders agree innovation is the main lever to create a more competitive economy, only 2 per cent of the 2800 global executives surveyed nominated Australia as an “innovation champion”. Asked to assess their own country’s reputation, 18 per cent of the 100 Australian executives in the survey put us in the “champion” category.

Australia fared better in another study commissioned by GE, leading the world in key areas of support for innovation efforts such as university-industry collaboration, and research and development spending. But the GE findings indicate a deep disconnect between how we perceive ourselves – innovators, risk-takers – and how others see us.

Regardless of whether it is fuelled by complacency, arrogance or fear, this perception gap potentially condemns Australia to global irrelevance. While we boast promising sectors and companies with genuine  records in innovation, research by leading European business school INSEAD, the World Economic Forum and others indicates that our relative innovation performance is languishing. Asia, in particular, is catching up fast.

In Australia, the innovation debate is too often fractured, hijacked by semantics and skewed to science and technology at the expense of deeper questions about leadership, culture and national identity. Business blames government, government blames business, and the research community blames everyone else.

Within organisations, the situation can be just as dire. Innovation efforts are often narrowly defined and heavily protected. Most workers are shut out of the process. Is it any wonder Australian productivity is suffering?

Changing behaviour is a complex, long-term proposition. It is about doing and trying, not just talking. It involves courage and a sense of purpose. Change is led by leaders prepared to cop flak and take risks. We do have such leaders, but not enough of them – yet – to influence the debate.

Government has a critical role to play in ensuring settings that enable business to create jobs, generate wealth, explore possibilities and tap new markets. Political debate aside, the potential for the national broadband network, for example, to transform service delivery and drive the creation of new business models within the public and education sectors is immense.

What is increasingly clear is that the terms ‘‘innovation’’ and ‘‘employee engagement’’ are inherently linked. Innovation is, at its core, a leadership responsibility, and therein lies the real opportunity. Harness people’s natural curiosity and capabilities and the race is half won.

Research published last year by Harvard professor Clayton Christensen and his colleagues found that organisations regarded as high-performing by industry peers and investors actively encourage the behaviours that produce innovation. The strategy is clear and widely communicated. Responsibility and accountability are pushed down to those with direct carriage, leaving executives clear to survey the horizon. Questioning is encouraged and experimentation is the norm. Reasonable failure is not a sackable offence.

As Australians, by default, we gravitate to our comfort zone. But we have the resourcefulness, pragmatism and resilience that come from living in a harsh land far from just about anywhere perceived to matter.

We also have high-calibre, globally competitive executives, a skilled workforce, political stability and populous, fast-developing neighbours.

Such dualities in our national psyche have been part of the problem and acknowledging them is part of the solution. Being able to embrace multiple, competing realities is a hallmark of a new world where either/or is increasingly irrelevant.

Innovation is often couched in sweeping national terms – “frameworks” – or technological jargon that intimidate and divert leaders from the real task, which is to motivate their people to improve things and try new approaches.

The most thoughtful leaders I’ve met rarely mention innovation; they accept change as part of the operating environment. They constantly scan for trends and future opportunities. Their management style  provides clarity about big goals and autonomy for those under them. Their remuneration and reward structures encourage staff to collaborate, question, solve problems and strive to do well.

Today’s good leaders know that the only way to steer through uncertainty and ambiguity is to  focus on the big questions – “What might the world look like in five or 25 years, and what are the implications for us?” – instead of adopting somebody else’s stock answer, or being diverted by short-term market or political sentiment.

For Australians, accepting the mantle of individual leadership on innovation and seizing the opportunity to act – to “put a ding in the universe”, as Steve Jobs would say – is more than achievable; it’s a national imperative, and not just for economic reasons.

A former journalist, Josie Gibson established a CFO network and now runs a creativity and innovation advisory business.

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