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.”

    Savill cites the example of venture capitalist firms. “About 65 per cent of VC investments don’t return the capital they invest in them, and less than one per cent give you a 20-plus 

    times return. That is asymmetric in terms of its risk profile because there’s much greater upside. You need to invest in many more opportunities and ideas because the chance of any one of them being a winner is tiny.”

    4. Set a mission for innovation

    The most successful companies set clear priorities around innovation and implement processes to make it happen. “If you think of leading companies across the world, they do things differently and have an open mission about innovation,” says Savill.

    Atlassian’s ShipIt hackathon is a good example. The company credits this quarterly company-wide event for a range of successful innovations, such as its Jira Service Desk product.

    “Atlassian’s hackathon is not run on a weekend,” says Savill. “They stop work to focus on it because it is really important to them as a company. Senior management are all involved in judging the winners because it is a company clearly focused on innovation.”

    5. Take it from the top

    Business innovation starts at the top, says Savill, citing innovations stemming from GrainCorp’s proprietary online marketplace, CropConnect. “GrainCorp found itself in a largely unchanging market, so decided to build a platform allowing its customers

    to trade grain,” he says. “The board then realised they had an opportunity to expand on this innovation, so got together with senior management and set up GrainCorp Ventures, a fund to invest in innovative businesses that aim to make their customers more efficient. These kinds of innovations don’t bubble up to the top of an organisation — they start with the board setting a clear goal.”

    Brett Savill FAICD is chair of SMART Recovery Australia and a former PwC partner.

    Peter Rossdeutscher FAICD is chair of First Nations X, Quantum TX and Innovative Energy Solutions. 

    Latest news

    This is of of your complimentary pieces of content

    This is exclusive content.

    You have reached your limit for guest contents. The content you are trying to access is exclusive for AICD members. Please become a member for unlimited access.