A CSIRO and The University of Queensland survey has revealed the innovation characteristics that top-performing ASX-listed companies share – and they’re principles that any business in any sector can embrace to drive performance.
In December 2020, we released ‘Thriving through innovation: Lessons from the top’ which shows how innovation drives financial performance, and how some top ASX companies outcompete.
Our findings are especially relevant now as the economic fallout from the COVID-19 pandemic continues. They show how financial success stems from an ability to pivot and try new things, and how co-creating value with customers can deliver market-leading innovations. Companies thriving through the tumult are already employing many of these strategies.
The single most important ingredient: The right attitude
While the other factors play a huge role in driving performance, the single most important is corporate entrepreneurship. There are three building blocks of corporate entrepreneurship:
- Risk-taking: Willingness to try bold, new things
- Innovativeness: A culture that prizes technology leadership and innovative solutions
- Proactiveness: Clear, persistent efforts to lead the competition and the market
These qualities support innovation and prevent a business-as-usual attitude from stifling growth opportunities.
Collaboration is key
The importance of collaboration was crystal clear in our analysis. This includes formal co-creation activities with a range of collaborators (including suppliers, customers, university partners, and public and private research agencies). Collaborations help accelerate innovations by unlocking new knowledge and opening new paths to markets.
Engaging formally with external partners works best when it augments strong internal R&D activities. Both parts are vital to establishing and maintaining a well-rounded innovation system connected to the outside world.
Be a creator, not just an adopter
The top ASX companies we surveyed deliver innovations that are new-to-the-world or new-to-Australia that power their performance. Yet most Australian companies still prefer adopting existing technology. Across Australia an overwhelming 75 per cent of new business products are simply adopted from somewhere else. Reflecting this strategy our own survey shows that 73 per cent of firms use cloud and mobile computing – it’s pretty much par for the course. This is a problem because our analysis of performance shows that this type of off-the-shelf adoption does not drive the bottom line. In fact, in the fight for the top, adoption loses handily to novelty.
But remember that adoption can be novel too, especially when tailored or combined with other innovations. This can be a faster route to high performance. There is a lot of room to grow here, particularly around business processes innovations. For instance, only eight per cent of the firms surveyed reported using cognitive computing, and less than six per cent report using block chain.
Innovate on multiple fronts
Complementary or supporting innovations are the key to unlocking value from the initial investments in new products and services. In our analysis we found the key is to be a ‘triple threat’ – introducing products, processes and business innovations at the same time. Triple threats unlock additional value and help to sustain value creation in the long-term.
Achieving market leading performance
The overall message from our analysis is clear – if you make one big bet, start with corporate entrepreneurship. Before you can change anything, you must have the top-down management support to do something bold. Then you can toss out the ‘not-invented-here’ attitude and start collaborating to bring diverse knowledge and technologies together and produce market-leading products and services.
As Australia’s National Science Agency, CSIRO helps companies innovate to grow. With nine industry-focused business units, we help thousands of organisations to solve their greatest challenges through innovative science and technology. Discover how CSIRO can help your business rise to the top
This article was originally published by CEDA. Read the original article here.