The ultimate innovation checklist

In an age where the innovation imperative is everywhere, where the 'ideas boom' is shared on bus shelters and every second white paper expounds the business case for digital, why are so many businesses still lagging behind consumer demand?

Is it because with so many different technology options, channels and competitors, it all seems far too complex? Or are we stuck wondering what innovation actually means?

The answer, according to Peter Williams, is simple.

"Innovation is simply trying new ideas. You don't need an army of consultants. You need an idea or a problem to solve, you learn through experimenting and you talk with customers to see what they think."

As Chief Edge Officer for Deloitte's Centre of the Edge and Chairman of Deloitte's Innovation Council, Williams says it's time to stop thinking of disruption as a "threat-based narrative" and start seeing it as a massive opportunity. 

"I've looked at innovation programs around the world, and the general Return on Investment (ROI) is 400 per cent. That's a clear business case for trying something new," he says.

Deloitte's recent report SMBs in the digital race for the customer also highlighted the continued trend to adopt digital among small and medium businesses (SMBs), with SMB owners and managers predicting the proportion of sales involving digital tools will rise to more than half of all sales activity within just five years.

"We're in a world of rapid movement, where technology is advancing at an exponential rate but its price is falling," explains Williams. "What used to cost a fortune and would exclude SMBs has been democratised to be available to all. Competing is no longer about outspend, it's out-think and out-execute."

At the same time, customers have moved way ahead of businesses in terms of expectations.

"Australians absorb technology like sponges, but our institutions absorb technology like bricks," he emphasises. "Your customers are not measuring you against other firms in your sector, but against the best experience they have anywhere."

A framework for ideas

At our recent Business Forum event series Williams outlined the 10 types of innovation, a 'periodic table' of innovation elements developed by Deloitte and global innovation consultancy firm Doblin. This framework is based on the discovery that all great innovations comprise some combination of these ten basic types.

"You can split these into three categories," explains Williams. "We tend to see most innovation in the product offering, but most of the business value comes from the configuration – or a combination across the three areas."

  1. Configuration is where you make sure you can convert your innovation into a profitable revenue stream. Do you need to change the business model? Can you network or partner with others to amplify value? How do you create the most effective team structure and process for continual improvement?
  2. The offering includes the product itself – what sets it apart and makes it new, and the ecosystem around it, such as complementary services or an app marketplace
  3. Experience focuses your innovation on how the user will engage with it – customer service, any brand extensions, distribution channels and distinctive interactions.

Using these 10 areas, you can break down a business problem in different ways to come up with new ideas. Williams says this starts with spending some time understanding what's happening around you.

"My view is that if you're not zooming out of your business every week to see what's going on, you're going to get overtaken. You think you're working hard on the everyday but you're running faster and faster to stay still."

Dean Firth, Macquarie's Head of Business Banking, says this is a common issue he hears amongst small business owners.

"If you're so busy taking care of the day to day, you may not think you have time to come up with new ideas. But if you automate some of that day to day, you have that opportunity to improve both operational efficiency and client experience," he says. "You need those breakout moments, or everything will stay the same."

New world of social collaboration

Williams sees social as one of the biggest untapped opportunities for small businesses to innovate and co-create. "Organisations that incorporate social software in the way they work are so much more productive – and business partners who use social achieve a 50 per cent higher revenue than whose who don't."

He gives the example of Yammer, an internal social tool that allows him to adopt his model of "working out loud" – sharing, asking and coordinating through his broader network.

"It's a way of working you just can't do via email. If we have a meeting, it's not about sharing what we already know because that's already posted on Yammer.

"Social software can help you collaborate inside your organisation to make you more productive and efficient, and know what is going on in your organisation at any point in time."

Three platforms to check out

According to Williams, we all have access to the best in class technology used by the largest firms. Here are three examples of platforms that are equally relevant and accessible for large organisations and SMBs:

  • Salesforce – a cloud platform for CRM that ticks all the boxes – mobile, analytics and cloud, and includes an ecosystem of plugins to help with productivity
  • PropertyIQ – developed by Macquarie and CoreLogic for the property and strata segments, this is cloud based, mobile and makes teams more productive.
  • Square – a chip reader for tablets that lets you take credit cards with a new model: free POS software, pay per transaction

The digital innovation checklist

According to Williams, if you are doing anything in technology it needs to tick four boxes:

  • Mobile – more than 50 per cent of internet traffic in Australia has been through mobile phones since 2014. If your website isn't responsive, you need to fix that fast.
  • Analytics – the next big things in technology (artificial intelligence, internet of things, mobile payments and more) all depend on data – and the insights you can extract from that data.
  • Cloud – "Think of it like a tap," advises Williams. "Turn it on when you want it. Pay more if you use more. You no longer need to dig a well – do not put technology on your balance sheet."
  • Social – "This is much bigger than Facebook and LinkedIn. It’s a shift in how we use tech, from transactions to collaboration, learning and sharing."

Start with the customer journey

Williams also cautions against focusing solely on internal efficiency when it comes to innovation.

"Think about the experience of the customer – what's the greatest experience you can give them?"  That process may include talking with customers and prospects, then mapping their typical purchase journey to identify friction or barriers at each touchpoint.

"If you want to grasp this opportunity to innovate, get involved with platforms and ecosystems in your industry," Peter advises. "Get good at collaborating. Invest in social, mobile and data because it will pay off in spades. And above all, do something."

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This material has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL & Australian Credit Licence 237502 ("Macquarie") for general discussion purposes only, without taking into account your personal objectives, financial situation or needs. Before acting on this general information, you must consider its appropriateness having regard to your own objectives, financial situation and needs. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service.