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The Innovation Game - Can ASX-listed businesses and start-ups learn from each other?

The Innovation Game - Can ASX-listed businesses and start-ups learn from each other?

Businesses need to embrace a collaborative mindset to thrive in the new economy.

John Paitaridis - Managing Director, Optus Business

John Paitaridis - Managing Director, Optus Business

Across the country, Australian businesses, government departments and agencies are handling the effects of digital disruption as industries become transformed by deregulation, globalisation, new market entrants and evolving customer needs.

According to Optus Business managing director, John Paitaridis, the best response to such "turbulence" is innovation, with commercialising ideas now vital to Australia’s productivity and competitiveness.

In order to overcome business challenges in this era, Paitaridis believes partnerships should be established between businesses, academia and researchers to work together to shape future industries and generate wealth.

“We discovered that there is much that digital start-ups and established organisations, such as Top 100 ASX listed companies, can - and want to - learn from each other,” he said.

“Creating an environment where learnings are freely shared will prepare businesses to more readily respond to and anticipate, changing customer needs and enable them to jointly build new business models. This is what we’re calling smart disruption.”

Paitaridis' comments follow the release of Optus Business research - Smart Disruption: A Perspective on Innovation for Australian Organisations - that compares and contrasts how "established organisations" such as ASX-listed businesses and "digital natives" such as start-ups, are approaching transformation to win in the new economy.

According to findings, successful business transformation is impinged on a customer-centric attitude, with each business group having a lot to learn from each other.

For an "established organisation", Westpac, the company’s general manager consumer digital, Travis Tyler, said delivering a product or service to amplify customer experience is prioritised among other business decisions made.

“We always make sure the customer is supported first, and then ensure our processes and policy systems don’t get in the way,” he said.

“With the level of transparency options available, if you don’t look after customers and make sure they’re first, then you won’t receive their business longer term.”

The sentiment is echoed among "digital natives" such as recruitment referrals startup, Peerbrief.

According to its chief executive and founder, Rob Fanshawe, the company only grows and functions because it revolves around the customer.

“Everything from next round investment to revenue is based on customer numbers, engagement rates and growth rates," he said. "If we don’t focus on the customer, then we don’t exist."

In addition, the study found that whilst "digital natives" appear to have their finger on the pulse, having being born in "the new economy", startups can learn from established organisations in a number ways.

They include how to better manage large customer bases, how to consistently engage non-digitally with customers within a physical environment and how to better understand market research and advocacy measurement tools to drive customer engagement.

Similarly, "established organisations" can learn from "digital natives" how to use data to gain insights, understand best practice for online ecosystems to capture customer feedback and select the appropriate digital tools to enhance customer experience.

Currently in Australia, only 16 per cent of businesses have a high performing innovation culture, while 39 per cent have little or none at all, according to the study.

However, these innovative companies, classified as startups, have structured themselves in a way that focuses on working on the business, rather than in the business.

The study found that this can lead to difficulty in actioning ideas and scaling presents operational challenges such as compliance, employee engagement and financial reporting.

Carsales commercial director, Anthony Saines, believes established companies expertise in scaling businesses is an invaluable asset for startups to learn from.

“Not having experience managing a growing business can have an adverse impact on results," he said.

"Leadership have never known anything different, meaning the decisions executed can be naive, labour intensive and inefficient, as they’re based on what’s best for a small business, instead of an established one."

Similarly, Venuemob co-founder and chief executive, Ying Wang, believes there must be a balance between innovation and action.

“You can always come up with a million ideas, but if you don’t implement it counts for nothing," he added.

"We’ve got 1,000 tools we want to build, but only have capacity to push out 10 things a month. That’s our biggest innovation limitation.”

By the same token, whilst maintaining strong operational experience, established organisations must be aware of the need to innovate internally and generate more ideas.

"Innovation is about testing in a low-fidelity way, so you’re not investing huge amounts of time and money in something that’s not proven, and shut it down or change if it’s not working," Australia Post general manager marketing and customer engagement, Samantha Bartlett, added.

"It’s something startups do really well, and a mentality we’re trying to foster internally."

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