Study of top business innovators shows more is needed than being tech savvy

An implant made by Cochlear who are innovating in their marketing and customer service. Dan Peled/AAP

A lot of stress is placed on the importance of science and technology skills for innovation in Australian enterprise and education. Innovation actually demands a cross-range of technical and non-technical skills, even more so in an age where the value of tech skills are diminished by the sheer number of people who posses them, a new report has found.

One of the critical lessons the Turnbull government may need to learn from the election is that talking up jobs and growth in the “economy in transition” may be good news for those best placed to benefit, but is bad news for those who can see themselves losing out.

The Skills and Capabilities for Australian Enterprise Innovation report from the Australian Council of Learned Academies (ACOLA), focused on human dimensions of innovation across every major sector of Australian economy and society. The study interviewed 19 senior executives in organisations that were identified either by being recipients of recent innovation awards or by their peers as leading innovators in particular sectors.

The report emphasises that innovation can play a greater role in tackling shared challenges of the Australian economy in the post-commodities boom.

Innovation requires a mix of skills

While there is a widespread perception that Science Technology Engineering and Maths (STEM) related skill shortages are inhibiting innovation, this is generally not the case among Australia’s leading innovative enterprises. Instead, innovative organisations are mixing the skills of their employees at the individual, organisational and supply chain and network level.

Organisations spend substantial time and resources finding and developing the right employees. They recognise that attitudes, cultural fit with the organisation, and “cleverness” or “emotional intelligence” are as important, if not more important, than technical skills requirements.

As well as relevant technical (professional) skills, candidates also need to possess non-technical skills, such as analytic and critical thinking, problem solving, social or cultural knowledge, creativity, leadership, communication and people skills. This often makes technical skills and disciplinary fields a secondary consideration.

Woodside, Australia’s largest independent oil and gas company, is focusing on emotional intelligence in its staff development. Recognising the importance of diversity, Woodside believes that emotional intelligence will be essential in putting together innovation teams with the right mix of talent into the future.

At the same time the company is integrating its information systems with IBM’s Watson. It’s a cognitive computing platform that can analyse 30 years of internal data to help predict future incidents and learn from mistakes of past generations.

Future proofing employment

Innovative organisations do not rely on new people simply being “work ready”. Leaders in these companies are especially aware of the need to upskill their workers in an environment where technical skills are becoming the norm.

They are aware that machine learning and automation will impact many routine technical and data managing jobs that employ STEM-qualified graduates, and actively develop talent and teams that can deal with complex, multidisciplinary, challenges. Job development and rotation are important to develop a whole-of-organisation mindset.

Pernod Ricard, a wine and spirits company interviewed for the study, is in the third year of using a formal creativity training program developed by one of the companies’ leaders. This program challenges employees to step outside their functional areas and think differently about organisation-wide challenges. The company is using the program to grow entirely new markets for their products, rebrand existing products, and developing a premium around brands.

Innovative companies interviewed for this project support the findings of previous research that shows leaders who have a deep knowledge in one field and broad understanding across many other fields, tend to run more innovative organisations.

What innovation means for customers

For a business to grow, source new markets and survive the inevitable shocks, an invaluable attribute is to understand innovation from the perspective of customers and users of products and services. Organisations know that an understanding of global markets, competition and customers is essential. All the commercial businesses interviewed are connected to global supply chains and clusters that enable growth to support innovation.

An example of a company using this approach is Cochlear, makers of implantable hearing solutions for adults and children. To take Cochlear to the next stage in an otherwise mature market, its current CEO (a marketing expert) focused on marketing and communication, as much as tech research and development.

Two years ago Cochlear launched its direct to consumer strategy and brought in a head of digital. For the first time it hired 20 sales representatives solely focused on the consumer. Results from this move show engaged implant recipients spend of three or four times more than an unengaged recipient.

The average person spends 12 years with hearing loss before getting treatment. A focus on gradual ageing-related hearing loss versus childhood profound hearing loss increases the potential market reach significantly. Resources are also being pumped into digital advertising and connecting interested consumers to Cochlear volunteers who can talk about their experiences.

Many other Australian businesses and organisations can learn from these leaders in innovation, to look beyond specifically skilled individuals to approaches that are more innovative.

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