If you think innovation is critical to the economy, think again: apparently, the degree to which business perceives this to be so depends entirely on its size.
The Commonwealth Bank of Australia conducted research and found 70 percent of all Australian businesses identified the “critical” role of innovation to the economy.
But it was the smallest businesses – those with a turnover of less than $1 million – that were most likely (73.9 percent) to perceive innovation as critical to economic growth.
The perception was shared by 70.4 percent of businesses with turnover between $1 million and $5 million, 65.1 percent of businesses with a turnover of $6-25 million, and by 64.8 percent of businesses with a turnover greater than $25 million.
CBA business and private banking group executive Adam Bennett saw the lower weighting of innovation among medium to larger businesses as potential evidence of businesses losing the mindset that helped them grow in the first place.
“Innovation starts with asking questions about how to do things simpler and more efficiently,” Bennett said.
“While business owners often think of innovation as involving the use of technology, more often it involves thinking critically to better understand business challenges and opportunities.
“These findings show an interesting change in priorities from small to medium enterprises. It is vital that as businesses grow, they continue to think like a start-up or the small challenger that they once were.
“This means constantly questioning the norm, and reflecting on how they can better meet the needs of their customers and even be a disruptive force in their industry.”
Of businesses that did recognise the importance of innovation, 37 percent believed it was about finding “simple things they can do on a day-to-day basis” to improve ways of working.
They identified a lack of resources and ideas or having a business partner that is “all talk, no action” as inhibitors to maintaining an innovative mindset.
Big business, big thinking?
The idea that businesses should maintain a start-up mindset as they scale is somewhat controversial.
George Smart, founder of creative agency Theobald Fox, opined in The Guardian last year that it was “ironic” that big business wanted to emulate start-ups “when those very same start-ups would kill for a slice of that big brand’s privileges”.
“To say that big brands should think like start-ups is a flippant comment,” Smart wrote.
“Perhaps what really belies the trend is that the big boys want to engender the hunger and creativity that tend to go hand-in-hand with start-ups.
“But this hunger and creativity would be better served via the carrot, not the stick.”
Chunka Mui, co-author of The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups, believed big companies that embraced innovation would be unbeatable.
“Yes, small and agile beats big and slow, but big and agile beats anyone—and that combination is more possible than ever,” Mui wrote in Forbes.