Life on the bleeding edge

Now perhaps I am a being elitist – but it seems rather depressing that in Australia, we consider a website with a shopping cart a sign of innovation. I guess it all comes down to your definition of innovation, and how low you feel you need to set your standards.

In a week where politics seemed to spin into fantasy land of mad hatters and double entendres, the Australian Bureau of Statistics chose to release their latest measures for business “innovation” in Australia. While the figures the ABS measured are certainly valuable and  interesting, they have equated business innovation with some rather simple measures of a few fundamental Internet technologies. The KPIs they primarily reported are broadband Internet connectivity, website presence, and e-commerce transactions.

ABS - Proportion of Australian businesses receiving orders via the Internet 2009 to 2010

It is worth considering that the ABS measurements are meant to cover the entire economy, so there are many thousands of small farming businesses and brickies labourers in the figures.

Once you wade through those, businesses employing 200 or more persons and those employing 20-199 persons were the most likely to receive orders via the internet (34%). The least likely to receive orders via the Internet were those with 0-4 persons employed (21%).

Compare this to buying things online – where business “innovation” seems to be twice as likely, with 40% of businesses with 0-4 employees and 73% of businesses with more than 200 employees buying from suppliers online.

Now it certainly is important to try to measure innovation at a business level, because it is a key factor determining future business growth. It is also typically one of the highest priorities of CEOs of successful organisations.

McKinsey did some interesting research into the attitudes of CEOs to innovation in 2008. One of the key findings was that CEOs almost unanimously felt that corporate culture and the people in their team were the key factors which would determine the success of efforts to innovate.

Now it should be rather obvious, but innovation doesn’t usually flow from the top of an organisation. It does however need supportive leadership for innovative measures to ever move beyond the thought bubble stage. Ideally, your organisation should be aiming for a culture where failure and experimentation have a valid place, and leadership is willing to support and build these efforts into strategic plans, and provide resources.

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