Internal barriers dampen businesses’ passion for innovation

Following the success of its inaugural Business Readiness Index on Information Security, Canon Australia announced a second module focused on Innovation. Conducted by GfK Australia, the report is based on surveys with more than 530 local business leaders, with a focus on attitudes and actions aimed at staying ahead of the curve. The comprehensive study reveals that while they recognise the importance of innovation, only 38 per cent consider their business to be innovative.

Most aren’t doing enough to drive innovation with 40 percent implementing just one innovation initiative. While challenges vary by business size and across industries, a lack of budget is perceived as the biggest inhibitor and resistance to change also features prominently. On the flipside, highly innovative companies are distinguished by their strong culture of innovation that permeates business units and empowers individuals to drive new ideas and ways of working.

Money isn’t everything

Treasurer Scott Morrison wielded both the carrot and stick in the 2018 Federal Budget, but the decision to cut tax concessions for research and development was out of step with the government’s commitment to boosting innovation. Yet for many businesses, there are problems closer to home.

The study found a range of emotional barriers that hold organisations back from implementing measures to drive innovation. For medium to large businesses, conflicting agendas and a breakdown in communication are cited as the biggest struggle for 63 per cent (medium) and 70 per cent (large) respectively. Self-doubt is a knife in the side for half (49 per cent) of small businesses, where leaders lose faith in the value of original ideas over time.

“Bigger budgets are viewed as a magic wand but businesses are made up of real people with real emotions,” says Gavin Gomes, Director of Canon Business Services. “It’s telling that internal barriers play a critical role in holding businesses back from an innovative future. Self-doubt, conflict, denial, pride and diminishing excitement are all real hurdles to overcome. These feelings often increase with business size.

“To overcome these barriers, businesses need to focus on the opposite emotion – belief. Belief is undermined when people see the wider industry innovating faster than their business. Leaders are responsible for delivering tangible changes that show progress is possible. Throwing money at a problem doesn’t always set your business up for success,” he continues.

Size matters less than intention

It’s encouraging that 78 per cent believe being innovative is important to being successful in the modern economy. Despite this, businesses have implemented an average of just three initiatives. Even the most popular initiatives – like having a process for gathering and acting on employee ideas, or nurturing an innovative company culture – have only been implemented by a quarter of businesses. Agile working, training investment and collaborating with other businesses were even less common.

Larger organisations feel more internal pressures, which could be due to increasing bureaucracy and conflict. More than half (54 per cent) of employees in these larger businesses feel unmotivated when it comes to innovation, while a whopping 42 per cent dismiss it as a buzzword.

On the other hand, for smaller businesses staff and budget limitations are holding them back from bringing their vision to life. They also feel less supported by government when it comes to funding, policy and access to talent.

“It’s a myth that smaller businesses can be more innovative because they’re more nimble, just as it’s a fallacy to assume that larger businesses can be more innovative due to their greater resources,” Gomes says. “It comes down to how the organisation is set up and how new processes are introduced so they don’t cannibalise other parts of the puzzle.”

“Hiring the right people is a great place to start, and it is important to build a diverse workforce in the process. Innovative companies prize people who show initiative and have good communication skills – across myriad backgrounds, experiences, skills and, importantly, age. They will drive meaningful change no matter how large or small an organisation is.”

Fostering a culture of innovation

The divide between highly innovative companies, and those that rated themselves lower on the scale, is a culture that encourages new ways of thinking and working. 74 per cent of highly innovative businesses believe it comes down to fostering an innovative culture, with 69 per cent actively building this from the inside out. The role of the individual in driving innovation is also given more significance, with more than 1 in 2 innovative organisations (57 per cent) seeing non-management employees as the catalysts of change.

“Not only do innovative businesses place a stronger recognition on skills such as digital literacy and data science, they also value curiosity, independent thinking, and a sense of initiative more than their counterparts,” says Dr Jeroen Vendrig, Research Manager at Canon Information Systems Research Australia (CiSRA).

“To facilitate a dynamic environment where employees can learn and grow, and where ideas can thrive, reward attempts even if they ‘fail’ – like a badge of honour. It’s not really failure if you learnt something along the way,” he advised.

As a result, while less innovative companies appear to struggle with 1 in 4 believing employees are indifferent to innovation efforts, innovative companies demonstrate a much higher level of motivation, excitement, and passion in comparison. They also appear to

demonstrate visible progress of innovation efforts, and are more likely to have a clear measurement of how their business has evolved.


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