Smart Disruption A perspective on innovation for Australian organisations Smart Disruption Disrupting your own business by better anticipating evolving customer needs and innovating to meet them. Achieved by partnering with organisations of all sizes and stages of maturity to share insights and experience to create mutual value. Table of contents
Enabling smart disruption through About Executive Summary Foreword customer-centricity 04 07 08 09
The business culture Delivering smart and skills needed disruption through to deliver smart Achieving smart innovation and agility disruption disruption Final thoughts 16 24 31 36 About
Smart Disruption: most prominent across both groups to a perspective on established and digitally create collaborative innovation for Australian native organisations, partnerships and organisations is a the report provides to learn from one qualitative study a framework all another’s strengths exploring how organisations can use and experiences. established and digital- – regardless of heritage, born organisations size and industry – to It reveals that in Australia are achieve success in this partnering for mutually approaching business new era of business. beneficial outcomes can transformation. ensure the longevity of The report describes Australian organisations Interviewing 25 senior the similarities and at all stages of their decision makers – differences between how transformation journeys, including CEOs, CIOs, each group approaches as well as the future CXOs and CDOs – from transformation. It also stability of our economy. some of the country’s highlights a desire ESTABLISHED ORGANISATIONS
DIGITAL N A T I V E S Australia's current Comparative strengths business characteristics Digital Natives’ strengths
Knowledge of how Understanding and Digital Advanced technology is consumed comfort around the Natives Natives by customers pace of change Agile, fast-moving and Periods of intense innovative. Understand growth have led to how to operate in rapid adoption of more an environment of systems and structure constant change, making it increasingly but lack the systems difficult to be agile. and processes to Striving to maintain Deep understanding Flexibility to try out new scale. Operating in a culture of innovation, of how customers act platforms (e.g. SaaS), to rush mode and find it but suffering from online and the inherent test and learn, discarding difficult to prioritise. legacy IT and increased difficulties of getting or adopting as desired internal and external people to grasp content scrutiny.
Established Organisations’ strengths
Take a more Resources to ensure Established Advanced holistic view changes are implemented Organisations Organisations correctly, leading to more resilient platforms Beginning their Strong adoption of transformation change programmes, journey, but with a focus on encountering internal customer, innovation Operational challenges: a focus on and technology. Digital excellence Long relationship history with the bottom line and is now part of who customers, and knowledge of legacy IT. they are, not what they what they value are trying to become.
Have the capital Non-digital channels and expertise to that work alongside invest soundly digital platforms
Smart Disruption: a perspective on innovation 5 “We have our roots in a traditional banking company, and credit and risk management are still very important. But ultimately, we have aspirations to act like a 200-year- old start-up, and we want to make sure we’re fostering innovation in a variety of ways.”
Travis Tyler, General Manager of Consumer Digital, Westpac
Established Organisation Executive
Summary John Paitaridis Managing Director, Optus Business
Enterprises of all sizes, and shape future industries and What’s emerged from our government departments generate wealth? These are some research is the need for of the questions the National organisations to embrace a and agencies right across Agenda looks at. new mindset of collaboration Australia are all dealing and partnership. Creating an with unprecedented We know that disruption is environment where learnings caused by the fast pace of are freely shared will prepare disruption. change created by increasingly businesses to more readily rapid advances in technology. respond to – and anticipate – The best response to this To better understand the impact changing customer needs and disruption has to be innovation. of this constant disruption and enable them to jointly build transformation, Optus Business The importance of innovation to new business models. interviewed leaders from the future prosperity of our country Australian organisations – from This is what we’re calling smart was highlighted by the launch Top 100 ASX listed companies disruption, and it will ensure that of the Government’s National through to innovative digital your customers have no need Innovation and Science Agenda. start-ups. Our goal was to to look elsewhere to have their The Agenda is designed to ‘drive identify the opportunities for demands met. smart ideas that create business organisations at different stages growth, local jobs and global of their transformation journeys However, this process of continual success’. Fostering innovation to share existing knowledge self-disruption is not easy and and commercialising ideas is the and experience. few of us have all the answers to key to growing productivity and achieve this alone. This is where competitiveness – both for our We discovered that there is collaboration and partnership organisations and our country. much that digital start-ups and plays its part – the sharing of established organisations can – learnings and experience. The Our challenge is how to achieve and want to – learn from one other. opportunity lies in our ability to this. What differentiates the Each group shares a common leverage these learnings, because successful organisations? How do goal of achieving long-term if we can do this well, it will you build a culture of innovation? sustainability, and to do so with an position us strongly to fuel the How do you establish partnerships innovative, yet structured approach. future of the Australian economy. between businesses, academia and researchers to collaborate
Smart Disruption: a perspective on innovation 7 Foreword Dr Lara Moroko Macquarie Graduate School
Australian businesses Difficult if not impossible to for Australian organisations, – from start-ups to extrapolate growth; shows that we have a deep Historical strategies are no and diverse spectrum of skills traditional players – are longer successful; in both established and digital long used to turbulence. Profitability and growth are born organisations. The great not coupled; opportunity now is to bring these Be it transformed by deregulation, The future is highly uncertain; skills together into a collaborative the removal of protections, The environment is highly network. Providing support, globalisation, new market surprising. frameworks and platforms where entrants or evolving customer the work of meaningful innovation needs, all of our industries and To many current business leaders, this and transformation can happen, markets have had to adapt to environment may seem very familiar, will benefit individual businesses real and lasting change. and is being perpetuated by what and Australia more broadly. Steve Blank calls “explosive shifts in In previous years, these periods technology, platforms and markets.”1 To quote one of history’s great of transformation have been customer centric innovators interspersed by significant periods of Surprise, uncertainty, complexity, "Coming together is a beginning, market stability, where customers, explosive change, unclear future staying together is progress, and competitors and the business paths and the diminishing impact working together is success." environment are relatively predictable. of traditional strategies are all Henry Ford making ongoing transformation Today, this pattern of cyclical both necessary for survival and transformation and stability is difficult to achieve. no longer applicable. It has been replaced by one of constant Yet, if businesses are to succeed in this turbulence. As long ago as 1965, one new environment and Australia is to of the fathers of modern strategy, have a successful innovation economy, Igor Ansoff, defined “turbulent then they are challenges that must be environments” and spent the next addressed and overcome. thirty years developing theory to help managers grapple with what he saw Encouragingly, Smart Disruption: as their common characteristics: a perspective on innovation
1. Why large companies find it difficult to innovate, and what they can do about it. Steve Blank, June 2016. https://steveblank.com/2016/06/23/intel-disrupted-why-large-companies-find-it- difficult-to-innovate-and-what-they-can-do-about-it/
Smart Disruption: a perspective on innovation 8 Chapter 1 Enabling smart disruption through customer-centricity Characteristics: customer-centricity The most successful Business has always been about Discussing the importance of business transformations delivering products and services customer-centricity to Westpac, in ways that delight consumers, Travis Tyler says: “We always are driven by a desire to which in turn drives brand loyalty make sure the customer is deliver superior customer and delivers revenue growth. supported first, and then ensure experiences2. our processes and policy systems Digital Advanced Today, true innovators are don’t get in the way. With the level “We can’t stand still. We’ve creating markets where previously of transparency options available, Natives Natives got to continuously move and none existed. They “find a way if you don’t look after customers Built around satisfying While they monitor for continuously improve to create to turn non-consumers into and make sure they’re first, then 3 customer demands, immediate customer better experiences for customers consumers” , and sustainable you won’t receive their business but still trying to feedback, their ability and employees,” explains Virgin futures are founded upon an longer term.” fully understand how to rapidly respond to it Australia’s Royston Lim. From ability to predict and satisfy customers engage may not be efficient as the Digital Native perspective, the customer needs. Excellent The sentiment is echoed among with them. Create it once was. They rely Carolyne Burns from Expr3ss! customer service is as much about Digital Natives. Peerbrief’s Rob online ecosystems for too much on data to says: “We’re very much about ‘the anticipation as it is participation. Fanshawe says: “Customers are customers, developers, provide the answers, customer comes first’. It’s all about our world. Everything from next Getting it right has never and engineers to instead of asking listening to them. We actually round investment to revenue is been more important either. share questions, learn customers exactly need to understand what’s based on customer numbers, NewVoiceMedia estimates and develop product what they think. happening in their business.” engagement rates, and growth Australian businesses are losing improvements. rates. If we don’t focus on the $11 billion a year due to poor Struggling with In today’s digital world, ‘the customer, then we don’t exist.” customer service4. effective scalability. age of the customer’ is firmly established in many industries. Reassuringly, Established Consumers have control of their Organisations and Digital Natives overall experience with brands, both state unequivocally that with more choice than ever before delivering a product or service to – from products to engagement enhance the customer experience platforms – as well as plenty is at the heart of the majority of Established Advanced of channels through which to business decisions made. Organisations Organisations air grievances. On the journey Focused on to become more understanding customer-centric. customer needs and Introducing new then meeting – and customer experience beginning to anticipate roles, implementing – them. They use customer-centric various channels and design thinking, methods to gather, and involving the listen and respond to customer as part of feedback, and are likely the ecosystem. They to involve the customer monitor and respond, from the outset in using NPS to measure product design. 2 https://www.squiz.net/blog/forrester-report-cx-drives-business-transformation satisfaction. 3 What is disruptive innovation? Clayton M. Christensen, Michael E. Raynor, Rory McDonald. Harvard Business Review 2015: https://hbr.org/2015/12/what-is-disruptive-innovation 4 http://www.newvoicemedia.com/blog/19181-2/
Smart Disruption: a perspective on innovation 10 A journey of co-creation and collaboration
The opportunity for shared Customer-centricity means placing business learnings exists in how the needs of your customers at the Established Organisations and heart of your business. This ensures Digital Natives interact with their that you are delivering services customers. How they manage which customers actually want and grow their customer base, and need. This approach gives use customer insights and involve brands a competitive advantage, customers in product development. unleashing a possible cycle whereby organisations can continually tailor offerings based on their deep understanding of their customers.
Smart Disruption: a perspective on innovation 11 Understanding the how and why of customer engagement
Both Established spent by this group on listening always conduct sufficient market Organisations and Digital to customers, the value of this research to effectively analyse “We send a market “Even though it’s information is in knowing how to what the data means. There is survey and customer the more traditional Natives are collecting, act on the insights gathered. also uncertainty around how to survey to our guests way of doing it, collating and sharing accurately measure customer customer feedback. This understanding empowers satisfaction and to really post-travel, which when you’re small Established Organisations to understand their needs. returns 500 daily and you don’t have However, how they listen better target specific audiences. It also helps tailor offerings to These examples highlight the responses. Over the a large sense of is different in structure, nature and type. optimise business performance. need for organisations to maintain course of a year we volume, talking to a level of intimacy with customers Conversely, Digital Natives tend to capture over two customers is the best Established Organisations as they scale and grow. This can be rely on customer data to evaluate typically rely on traditional done by maximising engagement million customer way of building an satisfaction, understanding methods, such as Net Promoter with customers through all data points we can understanding of how a customer engages with Score (NPS) to listen to customers available touchpoints, with a them, rather than why. Many in analyse to monitor what they like and and develop an understanding consistent experience delivery. the group want to develop an trends and track dislike. The online data of their brand advocacy. While understanding of why, but do not performance against captured can be quite significant time and resources are competitors and our misleading without own expectations.” this context.”
Royston Lim Rob Virgin Fanshawe Australia Peerbrief
Smart Disruption: a perspective on innovation 12 Creating presence in physical and digital marketplaces “We could see a handful “A florist called us at of customers were 5pm on a Friday to operating poor data say it had its EFTPOS models, and even machine stolen – though there was going this was a few days to be a short-term before Valentine’s Day, While online services rapidly respond to their individual However, Peter Wataman, revenue hit we made meaning without it the have changed the way needs,” Carolyne Burns says. in describing a shift in Flight Centre’s retail stores being purely a conscious decision of store was going to miss individuals engage with Regardless of the channel used transactional to become more doing the right thing for out on huge amounts brands, bricks-and- to engage with customers, experiential and inspirational, says the customer by helping of weekend business. mortar stores still have consistency is key. According to “Anyone can go online and search Flight Centre’s Peter Wataman, and see options. To come in and them improve their We managed to find a an important role to “The fact that our customers do look and ask for some expertise model, which in some replacement machine, play. Most Digital engage with us quite a bit, either becomes extremely important cases meant that they and then drove two Natives lack experience through enquiry or through their and obviously we encourage that travel management, delivering could move to a more hours to the store to in running physical person-to-person consulting, a very consistent customer which tends to bring a bit more cost-effective node ensure it could open for operations. As a result, experience, is paramount to of a trusted relationship.” type. While it wasn’t business as normal on many from this group our business in terms of great for numbers the Saturday.” may struggle to tap into repeat customers.” Digital Natives understand customers want flexibility when during those couple the growth opportunities Many customer experiences purchasing products – especially of months, it was Travis Tyler this presents. start online. From product and those on monthly cycles – and ultimately better for the Westpac services research, individual have successfully turned low Expr3ss! is adopting a personal brand offerings and peer and barriers to exit into a selling point. business as we’ve got a approach to ensuring customers industry reviews. Digital Native Even if it has a negative impact on happy customer who is are engaged through digital and expertise in operating in these the bottom line in the short run. engaged and loyal.” non-digital channels: “We place environments where there is As Ento’s Aulay Macaulay states, regular calls to our customers. considerable competition, and “People are more likely to select These constant ‘touches’ of direct understanding the features us because there’s a lot lower risk Doug Stuart customer engagement allow us customers’ value in their buying with the lock-in contracts. But, it’s Instaclustr to understand what users of our decisions, are invaluable. a low barrier to exit that keeps us services like and dislike, so we can on our feet, which works well.”
Smart Disruption: a perspective on innovation 13 Anticipating customer needs through collaboration
“The product team “There are crowd- Growing engagement Established Organisations further validation at workshops such opportunities through along their transformation as those in our co-creation spends a lot of time sourcing platforms programs are the most likely to feel environment, ThinkSpace. We listen investigating what built into our software, mobile, social, digital they are partnering with customers to customers, turn what we hear people want, and what where users can make and in-store experiences to launch tailored services. into the product or service they the best way of doing suggestions on new opens a range of avenues Businesses from this group involve want, and then engage them in the their customers in product design ways they want. The journey is such things are, usually in the features they’d like for businesses to co- by hosting human-centered design a powerful thing when it comes form of AB testing on to see added. People create with customers, workshops that aim to uncover to customer relationships,” says the website or app. can up or down vote truly delivering against consumer wants, and strategic John Paitaridis. This provides two on whether they’d like customer wants meetings with senior executives, to seek real-time industry feedback. Some Digital Natives are involving feedback loops – to see this feature and needs. customers in product development customer feedback on added too, meaning Using this approach, Optus is cycles, through online communities But few Australian businesses building longer-term customer consisting of customers, systems the issues they’re having, our customers are believe they are effectively engagement and loyalty from engineers and sales and marketing and how customers effectively defining partnering with customers. This its decision to collaborate with professionals. This allows them are responding to the how the product leaves a wealth of opportunities customers: “Before we commence to maintain a high level of quick to innovate and drive forward changes made. These evolves themselves.” anything, we determine desirability response and support to customer industries ripe for the taking. through customer feedback, queries, and uncover customer two cycles are extremely customer involvement, and priorities for the next stage of visible and important Rob product development. to the business.” Fanshawe Peerbrief
Brent Maxwell THE ICONIC
Smart Disruption: a perspective on innovation 14 Sharing opportunities: customer-centricity
What Digital Natives can What Established learn from Established Organisations can learn Organisations from Digital Natives
Which market research and How to use behavioural insights How to create a advocacy measurement tools to to improve customer experiences use to better understand drivers of customer engagement customer-centric business Insights around effective How to best use data to provide marketing and customer retention valuable customer insights strategies
How to consistently interact Best practice for creating online with and engage customers non- ecosystems and initiatives that digitally and within a physical efficiently capture customer environment feedback
How to effectively manage Which digital tools and services large customer bases enhance the customer experience, and how to build these Learn how Flight Centre, View other videos in series Virgin Australia, Airtasker and carsales approach customer centricity.
Smart Disruption: a perspective on innovation 15 Chapter 2 Delivering smart disruption through innovation and agility Characteristics: innovation and agility Australian businesses overcoming the challenges faced, as they’re based on what’s best have an unprecedented to ensure that all businesses have for a small business, instead of the resources they need to be established one.” opportunity to change, innovative and agile. supported by current Established Organisations Those Australian companies acknowledge the need for a greater Government policy as that do have a high-performing focus on innovation and seek new Digital Advanced well as technological innovation culture are mostly start- partnerships, often external to the Natives Natives capabilities. ups or early stage companies. They company. This type of collaboration Innovation is central Feel they could be have a strong focus on continually can help overcome known gaps Embracing innovation and to this group, and how doing more to be developing ideas, and there is or weaknesses by providing fresh transformation across all it operates. There is innovative. However, an expectation from within that thinking. However, the group often organisations will help the country extensive testing, the conflicting priorities developing and questioning new finds itself restricted by allocating the fulfil Australia’s vision for an ‘Ideas group is comfortable and a focus on running ideas is part of an employee’s majority of its resources to business- Boom’. It will also improve the with the 80:20 rule, lean while experiencing day job. These companies have as-usual activity. It may also lack the country’s position as a leading and they are open growth, can restrict structured themselves to actually innovative and energised culture that player in the global economy. to risk taking. Data innovation. work on the business rather than drives change. is accessible, and in the business. Currently, only 16 per cent of Australia Post is an example of an businesses are able Australian businesses have a high As Digital Natives grow and Established Organisation changing to action ideas. performing innovation culture, mature, it often becomes difficult the way it approaches innovation while 39 per cent have little or no for them to maintain this initial and transformation: “Innovation innovation culture at all.5 In the focus on innovation and a vibrant, is about testing in a low-fidelity World Economic Forum’s world ideas-driven culture. Growth way, so you’re not investing huge ranking for digital competitiveness and scale present operational amounts of time and money in Australia ranks just 18th, challenges, from effectively something that’s not proven, and Established Advanced behind countries including engaging employees and satisfying shut it down or change if it’s not Organisations Organisations New Zealand, Canada, the needs of a growing customer working. It’s something start-ups Denmark, and Netherlands.6 base, to increased financial do really well, and a mentality we’re Addressing past Conspicuous focus reporting and compliance. They trying to foster internally,” says oversights and on innovation rather Australia has many innovation also need to turn ideas into action. Samatha Bartlett, Australia Post. beginning to do more than expectation. strengths, ranking high in the AB testing, test and Multiple avenues Global Innovation Index for Anthony Saines from carsales While Established Organisations learn. Implementing being used to explore competition intensity (#8), gross explains how expertise from recognise a need to do more to ideas is a bigger innovation, including expenditure on R&D (#14), and Established Organisations helps enable innovation internally, the challenge than internal incubators, ICT use (#16)7. Regulations are overcome issues created by group still plays a central role in coming up with them. external partnerships, being implemented to foster IT growth: “Not having experience delivering Australia’s ideas boom. Looking to develop design thinking, and and entrepreneurism, creating managing a growing business can partnerships with support from start-up an attractive marketplace for all have an adverse impact on results. Its expertise in scaling businesses Natives to assist with accelerators. businesses that keeps our Leadership have never known for growth and overcoming innovation. country’s best talent on its shores. anything different, meaning the barriers to it, is an invaluable decisions executed can be naïve, asset. The lessons Digital The difficulty is in bringing labour intensive, and inefficient Natives can learn from this will these strengths together and improve their chances of success, domestically and globally. 5. 2015 Australian Innovation Systems Report. http://www.industry.gov.au/Office-of-the-Chief- Economist/Publications/Documents/Australian-Innovation-System/Australian-Innovation- System-Report-2015.pdf 6. The Networked Readiness Index 2016: http://reports.weforum.org/global-information-technology- report-2016/ 7. The Global Innovation Index 2016: https://www.globalinnovationindex.org Smart Disruption: a perspective on innovation 17 Barriers and Innovating your enablers of way to smart innovation disruption
Enablers Present In Barriers Present In
Leadership DN EO Time EO According to the National Established Organisations and Listening to Innovation and Science Agenda, Digital Natives can fuel smart ALL Resources customers DN innovation is about new and existing disruption by sharing their businesses creating new products, respective expertise around test- processes and business models. and-learn processes, fostering Partnerships EO Mindset EO innovation cultures and mindsets, Our report findings suggest that effectively managing business Collaborative the most important innovation growth and overcoming barriers EO Knowledge EO culture requirement for organisations is to to innovation. anticipate and address customer Openness to Pathways and needs. This ability to self-disrupt DN EO critique processes will lead organisations on the path to a sustainable future. People DN Technology EO
Environment DN Culture EO
Control EO
Conflicting ALL priorities
The unknown ALL
Smart Disruption: a perspective on innovation 18 Creating your ideas boom
To ensure long-term require entrants to present to a internal innovation incubators. success, it’s essential committee before progressing their Human-centred design helps investigations, and THE ICONIC businesses understand where “Our ‘intrepreneur’ “Ideas Lab supports the that organisations invites customers to judge ideas. opportunities exist and how to program involves notion for staff that identify and pursue the address them. developing an idea, we’re an innovative Scoring Systems right innovation ideas. Virgin Australia introduced an pitching it to people company, and value This means fostering To prioritise and identify the best internal crowd-sourcing platform within the organisation, employees’ ideas and the right culture to ideas, scoring systems can decide to foster innovation. Ideas Lab is and then the rest of contributions. It’s great encourage ideas to flow, what ideas get put into action. open to all 10,000 staff, where Businesses adopting this approach users are encouraged to submit the business votes as to from an innovation as well as the processes are also creating dedicated teams solutions to business challenges whether it progresses and staff satisfaction to capture those ideas who are responsible for managing and briefs posted on the site. to development. In fact, perspective.” and decide how and if to the entire process of how a new Royston Lim, Virgin Australia one of my young team act on them. There are product goes to market, and communicating back on explains: “Each challenge members has gone off Royston Lim a number of approaches its performance. entered into Ideas Lab must be to work with a venture Virgin to consider. sponsored by a business unit. capital company to Australia Incubators and It’s their responsibility. We make Hackathons it clear they have to review every accelerate an idea that Partnerships idea, and respond to provide delivers value back to Hackathons maintain and develop Internal incubators, design employees with feedback.” the company.” a focus on innovation, and provide thinking, and establishing Westpac has a number of easier routes for ideas to be subsidiaries and partnerships can incubators to rapidly ideate realised. Events also foster a overcome barriers to innovations. Samantha and test concepts, and uses collaborative culture, and processes Subsidiaries are investing in Bartlett human-centred design to better and structures are becoming start-up incubators to remove Australia understand where opportunities more mature as organisations organisational restraints to Post lie in its value chain. learn to optimise their outputs. business, along with hiring For example, carsales’ hackathons “Native” type people to run
Smart Disruption: a perspective on innovation 19 Overcoming the innovation limitation
To succeed in the Sidekicker’s Thomas Amos: “We process because they wait for the digital economy, both have daily stand-ups to make sure entire picture to emerge first. “You can always come everyone is on top of what they’re in Australia and on the The case for implementing up with a million doing, to discuss any problems that global stage, businesses people are having, and things that the 80:20 rule is supported by ideas, but if you don’t benefit from being able to might be working really well. This Airtasker’s Tim Fung: “The concept implement it counts constant feedback loop is critical of perfection is very difficult in move quickly and rapidly for nothing. We’ve got to our business, and ensures we’re the modern internet world. Bugs adapt to market change. always moving forward.” and glitches are almost inevitable, 1,000 tools we want meaning it’s about acceptability. to build, but only have Digital Natives are typically the Applying the 80:20 Rule You have to know that some capacity to push out best equipped to be agile, and things in your software won’t are comfortable operating in an work first time.” 10 things in a month. Adopting the 80:20 rule – the environment of constant change. principle that 80 per cent That’s our biggest There is no legacy that needs of business outcomes are Data Accessibility innovation limitation.” protecting, making decisions determined by 20 per cent of and change faster and easier to activity – and iterating during Digital Natives place significant implement. In contrast, many the process allows decisions to value on using data to make Ying Wang Established Organisations be made rapidly. It also means business decisions, while Venuemob recognise it is an area where they changes can be applied as Established Organisations place need to improve. required. Aligned with a fail-fast more emphasis on corporate culture, businesses successfully knowledge and experience. Both groups can build and support adopting the 80:20 rule By making data more accessible an innovative culture by adopting understand that if they waited for to employees, Established approaches such as: every data point they would never Organisations can open up get to making a decision. innovation avenues, with all staff Agile Methodologies empowered to identify new trends Adopting this principle overcomes and demands, and respond and Daily huddles and scrums develop a challenges created by too many develop services accordingly. collaborative culture and provide a stakeholders being involved, which constant feedback loop. The impact only slows down the decision-making of this approach is illustrated by
Smart Disruption: a perspective on innovation 20 Be risk-aware, not risk-averse
“Traditionally, we had a “At a time when One Established Organisation so, Established Organisations will number of large multi- the business wasn’t Test-and-learn is second nature to most successfully transitioned to a recognise where you can take risks year programmes that profitable I was flexible working environment without jeopardising the trust of cost tens-of-millions of able to formulate Digital Natives. It’s with test-and-learn: “We had a customers, and learn to build a dollars executed over a a business case to used extensively by pilot space over 12 months, with culture where employees are not the group. Established every employee cycled through it punished if they make mistakes. number of years, we’ve demonstrate how for a three-week period. We’ve now broken these up hiring a big number Organisations feel they used different configurations Discussing why Redback into incremental chunks of new people should be doing more each time too. It’s been a great Technologies is risk-aware rather in this space, meaning way of getting feedback on the than risk-averse, Managing of capability that are re- would build out our Director Phil Livingston explained: they have a significant technology, and the space itself. prioritised on a weekly, capabilities, saving us Similarly, we’ve proved this way “We encourage our team to take monthly and quarterly millions and millions opportunity to learn of work is very doable, meaning risks, as long as it’s not on the basis. This breaks up of dollars. That’s a from their digital born the business is more supportive compliance or legal side of the counterparts. of the changes.” business. And as long as at the the delivery process into sign of people being end of it, we have data to show much more agile and open to risk, change, To adopt the mentality, and Established Organisations must why something did or did not iterative development and keen to evolve overcome an inherent fear of also develop a higher tolerance work, and why.” and openness to risk, taking less- cycles that deliver faster at scale.” failure, Established Organisations should look to develop and test calculated steps and challenging results and in doing so new products, services or policies the status quo. It is another area we’re also encouraging Brent on a micro-scale, before mass where the group can learn from teams to take more Maxwell production and distribution. its Native counterparts. In doing risks, to fail fast and THE ICONIC iterate again until the problem is solved.”
Ean Van Vuuren IAG
Smart Disruption: a perspective on innovation 21 Managing business growth and scale
Established Organisations churn, and cross-sell and up-sell. Digital Natives and Established are able to share learnings The challenge is maintaining a Organisations “In areas where “We’ve got really focus on people, culture, quality Leverage existing partnerships, around test-and-learn by there’s no benefit in smart people who control, innovation and customers enabling innovation and providing Digital Natives at the same time. Balancing these expanding customer bases being different, our have a wealth of expertise on managing areas is the key to success. Articulate and manage opportunity is to use experience from growth. It is an area organisational change our scale to reduce other areas which Handled poorly this can lead to Implement new policies and where many Established staff dissatisfaction and attrition, the cost of doing they can bring into practices supporting staff Organisations have meaning Digital Natives must business in those our business. It’s learn to manage it better. Discussing the impact of Ento’s significant experience, commodity areas, important we bring partnerships with Established whereas it's one Digital By partnering with Established Organisations, Aulay Macaulay which then allows us these learnings into Natives can struggle with. Organisations – who have says: “The partnership works for the time to focus on our business, and expertise in delivering, structuring both sides. We get greater access where we do want to apply them for Tim Fung, Airtasker, sums it up: and managing growth – Digital to market products, and we be different according our gain.” “I think the benefit of working Natives can learn to: become part of their innovation with big businesses is they have strategy because we’re agile and Manage break points in the to our markets and solved 99% of problems. They’re can execute quickly.” growth cycle our customers.” Thomas absolute experts in their field.” Amos Navigate the mergers and Sidekicker When going through rapid acquisition process Peter growth, Digital Natives tend to Effectively break down the Wataman be focused on numerous things costs and implications of Flight Centre simultaneously to achieve it: how running a growing business to increase market share, minimise Better negotiate with other
Smart Disruption: a perspective on innovation 22 Sharing opportunities: innovation and agility
What Digital Natives can What Established learn from Established Organisations can learn Organisations from Digital Natives
Developing processes to address Developing internal incubators How to become issues around capability, and hackathons to capture ideas knowledge, time and resources and remain innovative and agile How to create an appropriate Piloting ideas with small groups evaluation and approval process of users before expanding them for ideas
Best practice for managing Accessibility of data to improve organisational restructures decision making and growth
Test and learn to improve knowledge, take smaller risks, fail fast and iterate
Learn how Mirvac, View other videos in series Sidekicker and Redback Insight into innovation Technologies approach methodologies like Agile innovation. and the 80:20 rule
Smart Disruption: a perspective on innovation 23 Chapter 3 The business culture and skills needed to deliver smart disruption True business Employers are seeking workers Digital Natives embody transformations are who can see the ‘bigger picture’ creative, flexible and dynamic and better understand the cultures – enabled by flatter only possible with the context within which they work. structures. Yet the group still “We are shifting away right skills, attitudes admits to lacking the leadership from rigid hierarchical and experiences. While training within academia and experience to scale their structures and and industry, together with business for growth, recognising Organisations need government initiatives, will help a necessity for guidelines and becoming more fluid, to attract and grow narrow the technology skills values communicating what the the aim is basically to new talent and skills gap, organisational cultures, organisation stands for. Digital assemble the necessary experiences and leadership will Natives are experiencing issues to foster an innovation help close it further. skills or capabilities for with attrition as they grow and culture and leadership, mature. This can be due to a lack Through talent, leadership, a particular piece of enabling them to of formal policies. work. By having this partnerships and culture, take advantage of businesses must empower current flexibility, we’re able to When it comes to creating an new technologies to employees and future generations innovation environment, there pull individuals together support their ongoing to believe they can be savvy are clear distinctions in structure from different parts of transformation. innovators in this new economy. and cultures between Established the business, combine They must entice an interest in Organisations and Digital technology, ICT and STEM among their expertise, deliver While the attitudes and Natives. This difference presents experiences are evident across current employees and future a collaboration opportunity to on an initiative, and Established Organisations and generations by demonstrating the provide the respective groups with then transfer across to Digital Natives, the technology potential these roles play in the the abilities they need to transform future of the Australian economy. another piece of work or skills are in short supply. and upskill employees for it. team upon completion.” However, a lack of ICT skills By shifting just one per cent of among graduates represents only the Australian Workforce into part of the shortages being felt STEM roles, PwC estimates there Ean would be a $54.7 billion increase in Van Vuuren by industry. New technologies Australia’s GDP.9 IAG and processes mean businesses need to re-skill employees who Established Organisations are were previously recruited for roles least likely to feel they have a that have evolved. “Almost five highly energised culture. Businesses million jobs face a high probability from the group are looking to of being replaced in the next build a more open, flexible and decade due to digital disruption”,8 collaborative working environment. according to CEDA. This will complement structured and formal learning policies.
8. Australia’s Future Workforce. CEDA. 2015: http://adminpanel.ceda.com.au/ FOLDERS/Service/Files/Documents/26792~Futureworkforce_June2015.pdf 9. A Smart Move. PwC. 2015: http://pwc.docalytics.com/v/a-smart-move-pwc- stem-report-april-2015
Smart Disruption: a perspective on innovation 25 Characteristics: business culture and skills Building a diverse workforce for Digital Advanced Natives Natives smart disruption Establishing their Working to maintain culture, recognising a a creative, flexible need to attract and and dynamic culture, Established Organisations work: Digital Natives appeal Both groups are recruiting from retain staff. Working while being more and Digital Natives to people who are flexible and one another to acquire leadership collaboratively, but performance driven. agile by nature; Established skills and talent too. For example, more thought is Learning focus is recognise that hiring Organisations appeal to people Flight Centre’s Peter Wataman needed around how not as strong as the right people is a who value stability and working says: “For certain circumstances the organisation is in the early days, critical component of for large organisations. we look to hire from start-ups. going to scale. Must but a big listening It’s extremely important to make identify new ways culture remains. business transformation. This natural selection strengthens sure where those people are to ensure staff are Encountering issues It is fundamental to the existing cultures of both placed in the organisation and the sufficiently supported. with attrition from acquiring skills and groups. However, it makes it harder role and responsibility they have. for them to change and adapt. poor management leadership, maintaining The challenge for an organisation of restructures. like ours is there is still that company cultures, Recruiting Outside traditional way.” ensuring diversity, the Comfort Zone and not employing too On the other side, Aulay Macaulay Some Established Organisations at Ento, says: “We’d definitely hire many individuals from and Digital Natives are actively from established organisations. Established Advanced competitors. trying to attract employees Our perfect candidates have outside their usual type to a mixture of small business Organisations Organisations A common recruitment integrate the skills they need and large in their work history. Trying to foster a Transforming to create challenge faced by Established to transform. The benefit of It’s important for roles like more open and flexible a more collaborative Organisations and Digital this is that it creates a more implementation, support, and culture, with a strong and energised Natives is that despite the need diverse workforce, with varying project management, as they focus on learning environment, for diversity and fresh thinking, personality traits in the team – understand the rules to play by.” and opportunities to introducing cross- businesses are more likely to be it more flexibility and agility, expand knowledge. functional teams attract employees who are or more process orientation. Understand how to and flattening comfortable with the way they manage growth, have organisational employee policies in structures. Constantly place, and looking to looking to others to attract and retain evolve and learn. Gen Y talent.
Smart Disruption: a perspective on innovation 26 Strong Leadership is Maintaining Learning Building a Corporate “It’s making sure “We aren’t afraid Important for Change and Development Memory that you let your to refer back to With a willingness to learn and As Digital Natives scale, however, With many Established experience in the mistakes that were challenge leadership a key feature the focus on learning can decrease. Organisations and Digital Natives past inform the future made. Our Executive of effective business transformation, In these instances the formal ‘learning as they go’ in the digital it’s critical all businesses boost structured and prescriptive learning era, a formal structure to ensure and it’s about getting Team believe you’ve technology and digital skills and processes deployed by Established past mistakes are not repeated that fine balance got to be upfront foster a belief that each employee Organisations are one solution to is key. Few organisations in either between looking at if you’ve made has a role to play in change. overcome this challenge. group have processes in place to things again in a a mistake. It’s a The best leaders understand they achieve this. don’t always know everything. To maintain a healthy and different way, but mistake you don’t With strong direction, they create dedicated focus on learning and The businesses overcoming this also using what you want to make again, a culture of constant learning. development, one Established have implemented networking and Organisation has quarterly training mentoring programs, to ensure have learnt to get but which might Sharing this expertise and fostering a collaborative culture across the themes: “Four times a year for an learnings are transferred and a better outcome be relevant to business enables the organisation eight-to-ten week period we’ll have celebrated. They also have post- going forward.” something we’re to better serve customers and the a focus on a core business area, implementation reviews to learn considering doing.” product or service. such as developing customers, about what contributed to success improving processes or boosting (or failure), and what they should Travis Tyler At THE ICONIC, the CEO strongly NPS. During this period there’s avoid doing again in the future. Westpac Brent promotes the understanding that ongoing communication, videos Maxwell he doesn’t know everything. and other content hosted on our One Established Organisation has THE ICONIC He doesn’t always have the best owned channels, and activities such e-learning systems in place to train information. And he relies on as timetabled training sessions. employees on how to do things. his teams to feed him the best This training extends across our This is supported by a “buddy information. At a recent off-site, entire workforce, and ensures system”, where executives will show “The CEO got people to practice we’re developing the skills we new team members how to do saying ‘no’ to him. That’s how need to succeed, and to help something, coaching them through serious the Executive Team are our customers.” the process until it is mastered. about people challenging.”
Smart Disruption: a perspective on innovation 27 Business structures for smart disruption
There is increasing fingerprint logon capabilities, Travis Listen and respond recognition of the Tyler says: “It was literally three Glean insights from employee “Learn where people’s people in the organisation working satisfaction surveys, one-to-one benefits of cross- strengths are, and together for a couple of months meetings and mood boards functional teams – a developer, security expert and then find and foster Open and transparent or matrix structures business person. Within six weeks we Remaining true to the those – that’s went live to customers, and that’s company values in business. been one of the most successful exciting. It builds a Rewarding and recognising customer-facing initiatives we’ve stronger team, which Smaller, collaborative teams Remunerate, reward and done in the last two years.” is in the best interest can help foster leadership and celebrate success accountability. They ensure the of the individual and Keeping staff engaged and Stock options and share schemes necessary skills can be rapidly Encourage staff to be the collective.” developing their skillsets is a core sought and developed component of delivering successful more invested in company to capitalise on opportunities. business transformations and performance For instance, THE ICONIC Carolyne fostering the necessary skills. While Growth opportunities embeds engineers into each Burns Established Organisations have more Provide opportunities for staff of its teams to enable faster Expr3ss! resources at their disposal to achieve to step up in the business innovation and problem solving. this, Digital Natives are typically Corporate Social Responsibility smaller so can be more interactive Flatter structures consisting of Enable staff give back to the and more personal with staff. cross-functional teams also allow wider community organisations to scale, seamlessly Both are important abilities, Be an industry leader operate across borders, enable and they should be adopted Build dynamic teams, recruit teams to stay connected globally, by both groups. The key to the best talent and set the but act in the best interests of the success including: industry standard local market, and reduce issues Flexible work environment caused by short staff tenure. Communicating Empower staff to work the Celebrating company wins, way that best suits them One Established Organisation recognition from senior benefitting from functional leadership and harnessing teams is Westpac. Explaining internal social media platforms the development process for its
Smart Disruption: a perspective on innovation 28 Get a fresh view from diverse thinking
Engaging with a variety One approach is to have formal Reverse mentoring programs, of mindsets can provide partnerships with universities. Or where senior management are “Certainly within IT “I’m here to put the in some instances, be located on partnered with graduates and there is an ageing fabric of a mature businesses with fresh university campuses. The pathways younger staff, are a popular workforce. We need organisation into a less and different thinking, created – from intern programs choice for helping businesses allowing them to remain and formal recruitment initiatives engage with the youth mindset new ideas and new mature organisation, – enable improved collaboration and foster skills and leadership. talent, meaning without losing that at the forefront of to deliver new thinking and ideas, One Established Organisation you’ve got to bring in flexibility and response.” industry trends. and create a talent pool businesses explained: “The whole idea is can draw from. there’s an element of you teaching fresh blood and new One demographic that both them about the organisation. But ideas. Encourage that Name Withheld Established Organisations and Others involve universities to more importantly, the students thinking, not punish it.” Digital Native Digital Natives are seeking help solve business problems, or are teaching you about the insights from is youth. After all, host one-day competitions and technology they’re using, how businesses’ future employees are hackathons. Using the learnings they’re communicating with David Crisp also their future customers. Hiring provided by students, businesses friends, and what’s important Ford the mindset of the people you’re are approaching problems in to them.” serving can enable a plethora new ways and delivering new of growth and innovation capabilities – for employees However, there also remains opportunities. and customers. recognition of the value that experience can bring to an It also helps to generate an Flight Centre asks students organisation. Travis Tyler from interest in technology and to work on business problems, Westpac says, "One of our the opportunities available to bringing a fresh lens into the focuses is how we can leverage bridge the skills gap as the next organisation. "The challenge and the experience from different generation enters the workforce. opportunity is in how we harness generations and demographics, that, and we’re seeing a lot of because you can't mimic or fantastic ideas.” fake experience."
Smart Disruption: a perspective on innovation 29 Sharing opportunities: business culture and skills
What Digital Natives can What Established learn from Established Organisations can learn Organisations from Digital Natives
How to support a large workforce How to foster a collaborative, How to develop effectively through formal open and more risk-tolerant programs and policies culture the right skills and culture Insight into effective tools to use Encouraging challenges when identifying and developing to senior management company culture
The importance of experienced What’s needed to create an leadership in enabling the business environment of self-learning to grow and scale
Communication channels that encourage collaboration
Learn how Mirvac, View other videos in series Flight Centre, carsales Insight into effectively working and Expre3ss! approach in cross-functional teams skills and culture.
Smart Disruption: a perspective on innovation 30 Chapter 4 Achieving smart disruption The building blocks for
Dr Lara Moroko smart disruption Macquarie Graduate School
Twentieth-century So what can companies do, the Macquarie Graduate School thinking dictated a starting today, to embrace of Management suggests that innovation and smart disruption, for many companies, there is a company should build while positioning themselves to disconnect between knowledge or buy in competitive thrive in turbulent competitive of collaboration and innovation advantage, create a environments of the future? best practice and the ability to implement and embed it in their barrier around their By reflecting on the experience day today businesses. turf and defend it at and aspirations of participants in all costs. Smart Disruption: a perspective This is a significant issue for on innovation for Australian individual companies and the This worked well when the pace organisations, together with economy as a whole, as the of change meant competitors global thought leadership Australian economy may stand to were known, attacks could be and best practice, these three lose “$9.3 billion worth of value, if anticipated and market position practical measures could help it doesn’t leverage collaboration could effectively be defended. Digital Natives and Established in the workplace (currently worth Organisations to supercharge $46 billion a year).”12 With turbulent change here their engines for smart disruption: to stay, this type of mindset Established Organisations are is proving to be less and less 1. Close the collaboration successfully addressing this gap by effective. Australian companies and innovation capability building internal teams with deep are evolving their capabilities to capability in innovation that can be more flexible and open. But gap – at an employee collaborate with business verticals they often find it difficult to build and team level to coach, mentor and model best these “dynamic capabilities”10 practice. These teams not only organically, without the benefit The Australian Bureau of support innovation initiatives, but of external reflection, input Statistics estimates that only 45 identify employees throughout and mentorship. per cent of Australian businesses the organisation who have the are “innovation active.”11 Anecdotal capability to champion ongoing evidence through my work with innovation work.
10. Teece, D.J., Pisano, G. and Shuen, A., 1997. Dynamic capabilities and strategic management. Strategic management journal, pp.509-533 11. Australian Bureau of Statistics (2016) Innovation in Australian Business, 2014-15, 21/07/2016. Available from http://www.abs.gov.au/ausstats/[email protected]/mf/8158.0 12. Deloitte Access Economics (2014) The Collaborative Economy – unlocking the power of the workplace crowd,17 July 2014, p.1. Available from http://www2.deloitte.com/au/en/pages/ economics/articles/collaborative-economy-unlocking-power-of-workplace-crowd.html
Smart Disruption: a perspective on innovation 32 Practices of internal collaboration, Other criteria, commonly used to Aalborg University in Denmark), such as this, have been shown to evaluate Digital Natives for the for example, drivers of partnership be a key driver of innovation in purposes of partnering (or indeed and investment readiness Australian businesses, as well as direct investment or incubation), for both Digital Native and having positive impacts on staff include the general capabilities Established Organisations (in engagement and productivity.13 and aptitude of the founders and this case, venture capital) are the depth of their customer or currently being researched with Perhaps more importantly, these market insight. Digital Natives’ the anticipation that advancing companies build a broad internal founders and management knowledge in this area will fuel network of employees who teams' ability to understand successful innovation activity and are “collaboration-ready” and and respond to the needs of the smart disruption. sufficiently skilled to identify the partnering organisation are also types of opportunities for external critical and come to the fore 2. Evolve internal partnership and innovation that as the partnership progresses business models to be create value for all parties. It to formalisation. These “soft” may seem implausible that an skills can be a challenging final collaboration-ready Established Organisation would stumbling block preventing the at a business unit level find it difficult to detect and establishment of an otherwise evaluate a fruitful partnership fruitful collaboration. Furthermore Collaboration and co-creation opportunity. However, the nature they are difficult to acquire in the for innovation have been shown of Digital Native ventures can absence of existing experience to result in a swathe of positive mean that indicators of future or ready internal mentors. Savvy benefits, from access to resources, success generally relied on by Digital Natives, who understand faster time to market, enhanced Established Organisations, such the need for and benefits of customer experience, more as audited accounts, testable collaboration, are engaging competitive offerings, decreased and reliable profit projections and with seasoned professionals costs and strategic flexibility, 14 customer adoption rates, simply with deep market knowledge to enhanced brand awareness . don’t exist. Evaluation of the and Established Organisation Despite these benefits, the ABS opportunity may rest instead on experience to bridge this gap. This found that only “15 per cent of the demonstration of “product engagement may be via informal innovation-active businesses had market fit”, i.e. the core product/ mentoring, through the creation at least one type of collaborative service/idea of the Digital Native of advisory boards, consulting, arrangement during the year 15 works effectively and meets the or formal board appointments. ended 30 June 2015.” needs or solves the problem for a substantive customer group. Detecting and evaluating Working with intrapreneurship, Practice with the common tools of prospective successful entrepreneurship and innovation, innovation and entrepreneurship collaboration partners is a the stumbling block to an otherwise can give individuals and teams worthwhile, but generally fruitful collaboration I commonly inside Established Organisations a underdeveloped asset for most see is one or more partners with ready lens to appropriately assess individuals and teams. At the an inflexible business model. A prospective opportunities for Business Model Design Centre business model describes “the partnering with Digital Natives (an interdisciplinary centre for rationale of how an organisation in the initial stages. business model research at creates, delivers, and captures value”16.
13. Ibid 14. Frow, P., Nenonen, S., Payne, A., & Storbacka, K. (2015). Managing Co‐creation Design: A Strategic Approach to Innovation. British Journal of Management, 26(3), 463-483. 15. ABS Op Cit 16. Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley & Sons. p.14 Smart Disruption: a perspective on innovation 33 An Established Organisation also exists for established there are exciting possibilities commonly has a number of business, particularly in periods for increasing the scope of business units, each of transformation – across the exchanges between all business with a specific business model. business or within individual types. All businesses can benefit The business unit/model is business units. Thought leadership from seeking out like-minded organised around a factor that in business model innovation urges organisations who are trying to shapes the natures of its creation, us to create and deliver value solve the same problem, delight delivery or capture of value; for for customers while structuring the same customer or meet the example customer type, product the business for profitability and same need. group, geographical region, or flexibility. Increasingly, this requires regulation. A Digital Native, partnering. This process can start At times, this may require engaging particularly in the early stages, as simply as asking “Who can we with potential competitors to starts with a single business model partner with to solve this problem/ share the common problems. – in this way it is a one business deliver better value to customers/ At Sydney incubator Stone and unit enterprise. When Established fill a real need?”, “What can we Chalk, for example, established Organisations and Digital Natives offer the partner?” and, “What do funding partners and start-ups partner, it's likely to occur between we expect from them?”. are all prospective competitors the Native and one business unit of and beneficiaries of advances in the Established Organisation. 3. Actively create, fintech. Despite this, the value of collaboration to solve common Flexible business models allow for support and opt in problems has compelled these partnering with other businesses to “matchmaking” competitors to co-create, promote, to provide superior value and platforms for resource and evolve this hub. experience for customers and/or collaboration - at an efficiency of resource use At other times, proactively and costs for the partnering organisational level establishing diverse networks businesses. Conversely, inflexible is required. The Australian In addition to staff engagement business models depend upon Hearing Hub is a collaboration and productivity and business exclusivity or control with respect between researchers, educators, flexibility, a core imperative to IP, production, customer clinicians and innovators for innovation is successful relationships, distribution and/or with expertise in linguistics, commercialisation and profit network engagement to capture audiology, speech pathology, growth. Recent research into sufficient value to be sustainable. cognitive and language sciences, successful commercialisation Put simply, the business models psychology, nanofabrication of innovation in our region are not flexible enough to share and engineering sciences. Each found collaborating with local, the upside of collaboration partner organisation has a deep established firms was critical to (in terms of profit and other specialisation that contributes to start-ups in building the skills, intangible benefits) with partners. the achievement of the collective scope and multinational reach common goal, i.e. improving the The opportunity to create typically needed to establish treatment of patients. The depth 17 collaboration-ready business reliable profitability. of skills, experience and resources models exists for early stage of the individual Hub members While platforms for partnership Digital Natives as well as those is complimented by sufficient and collaboration exist (e.g.: going through rapid growth breadth across the network. incubators, accelerators and early and iteration. The opportunity stage investment programs),
17. Paradkar, A., Knight, J. and Hansen, P., 2015. Innovation in start-ups: Ideas filling the void or ideas devoid of resources and capabilities? Technovation,41, pp.1-10.
Smart Disruption: a perspective on innovation 34 This means that treatment of willing collaborators to work It is for this reason the National hearing and speech disorders together, meaningfully. Whatever Innovation and Science Agenda can be undertaken holistically, the reason for their inception, is important to our collective underpinning the Australian these networks can serve as an future. New sources of economic Hearing Hub’s position as a beacon exemplar for more creative and resilience can be created by for research, training and practice. robust commercial collaborative supporting the innovation platforms. Entrepreneurs and capability of people and teams, Collaborative networks exist and intrapreneurs alike need look no the scope of collaboration-ready thrive when the level of success further than their customers business units and the willingness achievable by the network is for inspiration. Going beyond and capacity of organisations to greater than what is possible organisational boundaries in order create collaboration platforms. for individual members. The to collaboratively solve a pressing willingness of partners to share customer problem or meet a vital Smart Disruption: a perspective skills, connections and resources need is a critical first step on the on innovation for Australian (including customer/market path to positive market change organisations clearly shows that knowledge, technology, capital, and smart disruption. Digital Natives and Established customer networks and scaling Organisations are willing and capability), is a common key The engine for smart eager to evolve and adapt, to vibrant and robust embracing the strategic posture collaboration platforms. disruption exists and capabilities that underpin In my work as an academic success in the 21st century globally In Australia, truly diverse networks researcher, I often engage with competitive environment. The of complementary collaborators companies that have reached engine for smart disruption exists. tend to be more common in maturity in local markets, Fuelling the engine with support contexts where success comes foresee headwinds for future for partnership and collaboration from achieving broad goals. In growth or acknowledge that is a worthwhile investment for these contexts, profit, market their once successful business our companies, markets and the share or revenue targets are model is a natural target for Australian economy. sought in addition to other disruption. Encouragingly for sources of value, such as positive the national economy, many social impact (e.g.: better patient of these companies see this as or student outcomes, the creation an opportunity to explore new of knowledge). Perhaps it is the markets and business models, scarcity of funding, the complex solve new problems and tackle nature of the challenge at hand emerging areas of customer need. or the promise of achieving a lasting positive legacy that draws
Smart Disruption: a perspective on innovation 35 Final
thoughts John Paitaridis Managing Director, Optus Business
Never has business transformation felt right across the organisation; to address more immediate needs been so pervasive. No organisation and ICT skills are predicted to by creating the environments and today can be complacent about become an entry-level requirement cultures to attract and retain the their place in the market – they for many jobs of the future18. This best talent, growing their skills must continuously adapt and combination of circumstances is and empowering them to deliver innovate to remain relevant and creating the perfect storm. innovation. Innovation is not a grow. In speaking with the many department; it’s an organisation- organisations – both Digital While the rate of Australian ICT wide mindset, and having the Natives and Established – through jobs is expected to grow more right skills, culture and leadership our research, we found that quickly than that of the workforce in place will enable ideas and 19 while all are actively working on as a whole , growth is not keeping organisations to flourish. customer-centricity, there were up with demand. The ICT skills in three key components at the centre high demand are those which are Innovation and Agility of successful transformations multi-dimensional – combining where there is more to be done: technical with soft skills. The Only by equipping ourselves Business Culture and Skills; Government is responding to this to innovate, will we be able to Innovation and Agility; and gap with a commitment of $48 adapt to the need for constant Partnerships and Collaboration. million to inspire STEM literacy transformation. This ever-ready for the future, along with more state of change and ability to Business Culture immediate initiatives such as self-disrupt will mitigate many and Skills improved visa arrangements to organisations’ ‘Fear of Being attract entrepreneurs and ICT- Uber-ed’ that we identified In Australia, we have reached a skilled workers. through our research. tipping point – we are seeing a As business leaders, we also Digital Natives show us the way shift to the next wave of growth have a critical role to play in with their inherent openness to through a services-based economy. addressing this challenge. Building change, to risk, to innovation; their Digital disruption is no longer a partnerships with academia agile and flexible approach to trial phenomenon exclusive to the IT can help to fuel our future skills and error; and their culture of department, its effects are being requirements, while we can start challenging the status quo.
18. Tomorrow’s Digitally Enabled Workforce: Megatrends and scenarios for jobs and employment in Australia over the coming twenty years. Hajkowicz SA, Reeson A, Rudd L, Bratanova A, Hodgers L, Mason C, Boughen N, CSIRO (2016). 19. Australia’s Digital Pulse: Developing the digital workforce to drive growth in the future. Australian Smart Disruption: a perspective on innovation 36 Computer Society, 2016. However, even Digital Natives can Partnerships and We were also the first partner learn and leverage from others. Collaboration of Fishburners, now Australia’s What our research has shown largest co-working space for is that where many Established However, we have learned that we start-ups; as well as being the Organisations have an innovation don’t always have all the answers technology partner of Stone and advantage over Digital Natives to solve innovation alone. We reach Chalk, Australia’s leading fintech is in the embedded structure out to a network of partnerships incubator. Optus and our parent and governance to identify which through which we can extend company Singtel also manage ideas to pursue and to scale our own skills and capabilities our own venture capital arms, them for growth. and benefit from the knowledge Optus Innov8 and Singtel Innov8, and experience of others. For through which we fund technology In addition to these formal example, we believe that it’s vital start-ups like BitSight and the IoT processes however, embracing to collaborate with educators to platform Jasper (which was later methodologies and concepts like address the future skills gap, which sold to Cisco). 'test-and-learn', 'agile' and ‘fail- is why we’ve joined forces with fast’, will allow innovation to sit These examples are based on a Macquarie University to develop a easily alongside business as usual foundation of shared values and joint cyber security education hub. and to start delivering value. goals with our partners. They are Our shared ambition to protect built to deliver long-term mutual Australia through cyber security This is a journey that Optus is on; success, and we believe, will play has resulted in a partnership which we face the need to continuously their part in delivering Australia’s seeks to narrow the STEM skills adapt to stay ahead of changing innovation agenda and its strong gap through cyber education, customer demands. To address economic future. this, we have developed a training, research and consultancy. company-wide approach to We are a founding partner of the innovation, enabled by our Think Macquarie Park Innovation District, Big ideas platform, as well as the goal of which is to drive our Yes Labs and ThinkSpace, innovation and competitiveness, to where teams follow test and learn attract and retain talent, and to methodologies to build innovative create inclusive employment and customer solutions. entrepreneurial opportunities for the community.
Smart Disruption: a perspective on innovation 37 Dr Lara Moroko biography
Dr Lara Moroko Macquarie Graduate School of Management B.Bus (Hons) (UTS), MCom, PhD (UNSW)
As an educator, researcher and She is responsible for the co- industry consultant, Lara combines creation of unique and immersive her passion for entrepreneurship learning and teaching programs, and innovation with her expertise where students wrestle with live in the area of value creation for business issues while working customers, staff and stakeholders. alongside industry partners Through her research and consulting from social entrepreneurs and background, Lara builds a bridge start-ups to ASX 100 companies. between the latest in global thought Specialising in innovation, leadership, and the challenges and entrepreneurship and strategy she opportunities of implementing best is a lecturer in the MBA, Master business practice. of Management and Executive Education programs. Prior to embarking on her academic career in 2005, Lara Lara has been widely published spent more than 10 years in academic, management working in the private sector and general business media in across the banking and finance, Australia, New Zealand, the pharmaceutical and health, United States and Asia. Her construction and engineering, research areas include inter- advertising, design, IT and relating and implementing Design telecommunication industries. Thinking; innovative business modeling and "lean" practice; Lara draws on her experience and the creation of value through in the corporate sector and enhancing employee, customer her ongoing consulting work and student engagement. throughout her role as Lecturer in Management at the Macquarie Graduate School of Management.
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