Featured image above: the Minister of Industry, Innovation and Science delivering his address at the AFR National Innovation Summit
Innovating isn’t just about creating new businesses – it’s also about transforming the old.
This message formed the crux of the Hon Greg Hunt’s speech at the Australian Financial Review’s 2016 National Innovation Summit as he presented plans for his portfolio as Minister for Industry, Innovation and Science.
“Innovation is about the new firms absolutely, unequivocally…but also the existing firms,” said Hunt, insisting that the latter should be innovating through “new or improved goods or services, new processes or new business models.”
Pointing to Dulux, CSL, Telstra and BlueScope as examples of Australian veterans who are thriving through investments in R&D, the Minister warned that less-savvy business won’t be bailed out.
“We can’t prop up existing, failing services,” he said. “They have to be able to compete.”
The need for speed
According to other leaders at the AFR Innovation Summit, the window of opportunity is closing for some of Australia’s oldest and largest corporations.
Data61 CEO Adrian Turner says he returned to Australia after 18 years in Silicon Valley because he was concerned about Australia’s pace of change. He believes Australian businesses don’t have long to get on board the age of digital and data-led markets.
“We have a five to 10-year window,” says Adrian.
Chairman of the Australian Advanced Manufacturing Council, John Pollaers, pointed out that although the world has moved into the fourth industrial revolution – the merging of the physical and cyber worlds – many companies are still working their way through the second and third industrial revolutions of electrification, automation and IT.
“If we underestimate technology we will fail,” says Pollaers. “If we underestimate the resistance to change and innovation, then we’ll also fail.”
Maile Carnegie believes companies need to stop ‘hand-wringing’ and start taking action.
“Our financial institutions, if we don’t get them moving, are in for a world of hurt,” says the former Google MD, who recently joined ANZ as Group Exec of Digital Banking. “Banking is a massive data play – those industries are getting disrupted.”
“We know what we need to do so we need to move the conversation to doing it…At the end of the day strategy is all about making some choices.”
So how can old businesses achieve innovation?
“Fail fast, fail cheap, pivot,” suggests Suzana Ristevski, Chief Marketing Officer and Head of Strategy & Growth for GE Australia, New Zealand and Papua New Guinea.
With speed and agility considered vital to innovation but difficult in large businesses, CommBank has turned to partnering with startups.
“They have the agility, we have the scale, so it’s a pretty great marriage,” says Tiziana Bianco, head of the CommBank’s Innovation Lab.
Corporate law firm Gilbert and Tobin have also invested in ‘self-disruption’ to avoid becoming obsolete, positioning themselves as a ‘market disruptor’ and increasing their stake in startup LegalVision to 20% at the start of August.
BHP Billiton, who was forced to cut its dividends by 75% in February this year, has moved to a five-point plan (see The big three drivers to job growth).
- Hastening production
- Accelerating technology competencies
- Creating innovation hubs to address innovative solutions to specific challenges
- Setting up programs to build from the inside the company
- Forging partnerships with unis, CSIRO, and CRCs
When asked at the AFR Innovation Summit what would happen to jobs if they innovated through automation, BHP’s CTO Diane Jurgens said her company is upskilling existing workers; taking them off machinery and teaching them to operate machines from the safety of a control room.
Group CEO & Managing Director of Domino’s, Don Meij, told the summit’s audience that if we don’t take our skills ‘upstream’ in this way, we will simply miss out on the market altogether.
– Elise Roberts