Where is Australia placed in the global innovation economy? Can corporate giants learn to dance? What is the role of boards and CEOs in fostering innovation? What are companies’ current innovation practices and concerns? How can we map the best way forward? With these key questions in mind, Spencer Stuart partnered with University of Technology Sydney Business School and 2nd Road, and spoke with 21 leaders of Australian business — nine CEOs and 12 chairs of top ASX-listed companies — to go deeper than a traditional survey approach. We focused our research on the impact of senior leadership on innovation in Australia, and the in-depth one-on-one conversations revealed detailed insights into what leaders of large businesses are thinking and doing about innovation.
The key takeaways from these conversations include:
- Within the Australian context, senior leaders feel the Australian business community is too cosy and comfortable: markets encourage a conservative approach, and capital rules make it easier to buy than to build.
- Innovation is important, but not always a top priority. Businesses want to defend the core, then invent — small bets and incrementalism reign, short-term thinking drives decision-making, and innovation is stifled by the demand for certainty.
- Leaders see a lack of integrated approaches to innovation. Culture is seen to trump formal practices. Whilst everyone is responsible for innovation, the CEO must lead.
- The role of the board is to encourage, rather than initiate, innovation. Boards want to look outside and bring lessons inside. Boards also play a role in communicating the value of innovation to markets.
- The chairmen and CEOs who participated in the study think it will be important for organisations to become ‘ambidextrous,’ creating special-purpose vehicles and investing in effective innovation methodologies at the heart of strategy.
- These senior leaders also discussed a range of other tactics to encourage and improve innovation in Australian companies.