Beverley Head
July 12, 2016

Big business and big innovation

Corporate

Big business and big innovation

Tanya Monro: Large organisations can face difficult innovation challenges

With the Coalition now primed to take hold of the post-election parliamentary reins, Australia’s innovation switch has again been flicked, and big business had better be ready.

In his victory speech Turnbull didn’t once utter the words ‘innovation’ or ‘digital’ – but he did stress the; “Need to ensure that we maintain a successful transition from the economy fuelled up by the mining construction boom, to one that is more diverse.”

And with the ratings agencies Standard & Poor’s and Moody’s giving the Government a nudge about the need to improve Australia’s balance sheet or risk its AAA rating, that transition needs to happen quickly and (relatively) inexpensively.

Much of the early oxygen in the innovation debate has been sucked up by startups, FinTechs and innovation hubs.

But the reality is that much of the nation’s innovation related heavy lifting will have to be done by big business.

Startups are by their very nature innovative. As the University of South Australia’s Deputy Vice-Chancellor of Research and Innovation, Tanya Monro, noted: “In a small venture there is nowhere to hide and those that are not driven to disrupt are exposed.”

However she warned that; “In a large organisation you can hide,” and there was a risk that; “In a large organisation it can become a conversation about innovation, not a culture of doing it.”

This is especially the case as the structures developed to help manage large enterprise become “barriers to responsiveness,” Prof Monro said.

Scale need not however be an impediment, according to IBM’s global chief information officer Jeff Smith. Formerly the head of IT at both Suncorp and Telstra, Mr Smith recently told an audience of C-suite executives in Sydney that innovation was not about; “the scale of people, it's the scale of thought.”

A long-term advocate of Agile, Mr Smith said that the approach supported small self-directed teams that were loosely coupled but tightly aligned to a strategic direction.

At IBM the need to percolate that notion at scale across the enterprise has led to the establishment of another of Smith’s Agile Academies (he set one up at Suncorp for the same reason) this time offering 30 courses broken into segments of ten.

According to Mr Smith; “We have 30 coaches for 400,000 people. We are getting a lot of leverage out of them because of a better curriculum and the onus on the teams themselves,” which are largely self-directed, loosely coupled, but tightly aligned.

By coaching the entire workforce on Agile; “We have dispelled the myth that it's for the selected few.”

To foster scale, Mr Smith nurtures “atomic” level, but multi-process, Agile teams which can then be replicated across IBM. To scale the innovation effort across IBM every team performs a retrospective every week.

“Culture is a way of working - and about the only unique thing a company has. So it had better provide a competitive advantage,” he said.

Prof Monro believes that successful innovation cultures are “about flattening hierarchy when it comes to good ideas and not having a hierarchy of decision-making.”

Elizabeth Eastland, CSIRO’s general manager of strategy, market vision and innovation, said that for large companies it was important to keep teams at between 8-12 people in size, and to foster some degree of team diversity. However she warned too much diversity meant a team “can't cohere or gel – there needs to be a shared value set.”

She also stressed the importance of the working environment noting that: “Innovation happens at less than 100 metres and has to do with accident and chance.”

As founder of the University of Wollongong’s iAccelerate programme, Dr Eastland said that the physical facility was deliberately designed so that; “All the toilets and coffee making was on one floor. They had to go to one floor for their coffee and accidentally engage.”

Amantha Imber, head ‘inventiologist’ at Inventium which has worked on innovation strategies with organisations such as Nestle, the ABC, Lend Lease and Mirvac, stressed the importance for large enterprise to deliberately build an enterprise innovation capability and nurture an innovation culture.

Dr Imber also said organisations needed to establish an innovation process and policy which was able to balance incremental and disruptive innovation efforts.

Prof Monro noted that in a university setting where commercialisation is a key goal “it’s about keeping entrepreneurs, staff, students and partners feeling supported rather than hindered.

“There are a number of things that you need to do – but the leadership needs to clearly articulate innovation as a value and what success looks like.”

As to what kills innovation, Prof Monro said that it came down to a “fear of failure, excessive monitoring and measurement – when people are watched they revert to what is safe.”

“What kills innovation is internal competition from structures that drive conservatism,” she said.

 

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