Five tips for achieving excellence through innovation

What are the secrets behind successful innovators? Brett Savill FAICD and co-author Peter Rossdeutscher FAICD interviewed a range of innovation leaders from some of Australia’s leading businesses to understand what they do differently. The insights are published in their book, Moonshot Applied. Here, Savill shares five tips for innovating your way to excellence. 

1. Act like an innovator

There are key factors that make innovative companies stand out from the rest. The first, says Savill, is a clear vision. “They have absolute clarity about what they’re doing and why. They also spend more of their money working on transformative innovation and less of their money on incremental innovation.”

Another differentiator is their ability to scale. “They are also more likely to have their people and culture focused on innovation,” he adds. “And they are more likely to be collaborative and to use enabling tools, such as Lean and Agile, to support their efforts.” 

2. Think like a tech company

To sustain exceptional innovation, Savill says organisations should learn from outperformers, such as technology companies. “Technology is moving so fast that every business has to think of itself as a technology business — and software is the way to make the most money in tech,” he says. “The advantage of software is that you can grow the bottom line much faster than the top line because the incremental cost of a new sale is almost zero.”

He cites automotive and clean energy company Tesla as an example. “Tesla has a very good model for managing the operations of the car and, in particular, about sensing what’s going on outside the car,” he says. “There’s a lot of discussion among analysts about whether Tesla is going to license this to other car manufacturers. That’s a good example of a car manufacturer turning itself into a software business.”

3. Understand the risks

Findings from the AICD’s 2022 innovation study, jointly published with the University of Sydney Business School, show that while innovation has been given greater priority by boards, risk appetites haven’t substantially increased.

“There’s a misunderstanding about the nature of risk when it comes to innovation,” says Savill. “Successful innovations aren’t risky in the same way a big capital program would be risky. You don’t need to commit $500m. The risk has a much lower downside than upside in innovation. Most people misunderstand that.”