Our new prime minister Malcolm Turnbull said in his first statement after being elected Liberal leader: “We have to recognise that the disruption that we see driven by technology, the volatility in change is our friend if we are agile and smart enough to take advantage of it.”
Earlier this month, he launched an “ideas boom” with a $1.1 billion package and several legislative changes to ensure Australia could move towards taking advantage of it.
The innovation statement included 20 initiatives split into four key pillar areas. These were:
1. Taking the leap: backing Australian entrepreneurs by opening up new sources of finance, embracing risk, taking on innovative ideas, and making more of our public research.
2. Working together: increasing collaboration between industry and researchers to find solutions to real world problems and to create jobs and growth.
3. Best and brightest: developing and attracting world-class talent for the jobs of the future.
4. Leading by example: the Australian Government will lead by example; embracing innovation and agility in the way we do business.
You might be thinking, how can I be part of the “ideas boom”?
Innovation isn’t something that is left for entrepreneurs in garages. Every company has an incredible capacity to be innovative by training your staff on world leading innovation tools and how entrepreneurs make decisions. You can also start to work with startups here and globally to improve your existing business model or explore new ones.
Here are 10 tips to help you be part of the “ideas boom” in 2016.
I’ll split this into two areas. Firstly, how you can work with startups here and globally. Secondly, how you can increase your internal capability to improve your existing business models.
Working with startups
1. Be open with your business problems and key areas of strategic importance. Entrepreneurs need to firstly identify if a problem exists and then secondly, consider whether their solution can alleviate the problem better than an alternative provider. By being open, you’re reducing the work entrepreneurs need to do to assist you to solve your biggest problems.
2. Look outside your “world view”. You might be asking: why don’t I solve my problems myself? Well, the best solutions often comes from outside your “world view”. A world leading innovation method is “Open Innovation”. This phrase coined by Henry Chesbrough, outlines a firm innovating with external ideas and sharing risk and reward.
The most famous type of “Open Innovation” is contests, such as the $US1 million Netflix Prize. Consider using Melbourne born contest platform Kaggle or holding a contest with a co-working space in your city, like (Melbourne) inspire9, (Syd/Bris) Fishburners, (Perth) Spacecubed, (Bris) River City Labs, (Adelaide) Majoran Distillery.
3. Invested before you buy. Investment into a startup is often a risk-reducing way to see how the founding team and operations of a business actually work before you acquire an entire business. Some of the biggest business lines of major companies are startups which were acquired. Even Google with its ample resources, has initiated many of its key business lines externally — such as YouTube and Google Maps.
4. Become an early customer. Investing and contests aren’t the only options — you can simply become an early customer. Becoming an early customer gives the startup the cash injection it needs to continue its research and development and it allows your business to have significant influence over what is built and when.
With much of the complexity of a business now outsourced to world leading providers, such as hosting to Amazon Web Services who also provides their services to customers including Expedia, Airbnb, Adobe and Netflix, the risk of partnering with a startup is considerably reduced.
5. Partner with start ups in booming markets. To keep ahead of the competition, you can join the ranks of IBM, PayPal, Microsoft by partnering with a firm like Israel-based SOSA to help you stay on the front foot in identifying world leading startups and technology.
While improving your innovation efforts by leveraging external providers is one way to advance, the capability to innovate internally is often something that is underdeveloped. Some companies have innovation units within their businesses, others seem to have almost everyone inside their business innovating. What tools are these companies using to improve their existing business models and create new ones?
6. Embrace failure. If you’re not having some projects “fail” then you’re simply not taking enough risks. Nearly all successful startups have had between one to three significant business model changes before they landed on the winning business model. But even then, they implement a continuous improvement model to constantly improve as well as to create and capture value. If a project fails, celebrate the failure and share the lessons the team learnt.
7.Be customer first. One thing startups have in common is a lack of significant resources and company history, so the only thing they can do is to go out, speak to customers and gather insights on customer problems and how to solve them. As a result, many are collecting customer feedback from day one. This ensures they are building something their customers actually want. “Design Thinking” and “Human Centered Design” have advanced in leaps and bounds by US design firm IDEO and Stanford d.school. Download their guides Ideo and Stanford d.school.
8. Embrace the power of your people. Internal ideas platforms such as Spigit or Innocentive can unlock the power of your employees. These platforms provide you with software to call for and manage problems and solutions from your own employees. Often you’ll end up with more ideas than you know how to deal with! Being open with your employees about your strategic priorities and implementing a system to filter these ideas will be essential.
9. Inspire an entrepreneurial mindset. Sharing stories of how leading entrepreneurs made decisions can assist your employees to have a paradigm shift. For good measure, hiring an entrepreneur in residence on a retainer can help ensure your team in thinking with an entrepreneurial mindset. This is our most popular service at The Entourage Beanstalk Factory.
10. Embrace the one-page business model. The “Business Model Canvas”, with the “Value Proposition Canvas” or the “Lean Canvas”, are all great places to start. They map out the business model on one page, so your entire team understands how each division of your business is involved in the journey of creating and capturing value. This is the quickest way to get people from different silos talking the same language and focusing on the same thing.
Peter Bradd is CEO of The Entourage Beanstalk Factory, a leading provider in innovation training for your people. Their team is made up of successful Australian entrepreneurs, experts in teaching corporates how to innovate.