When it comes to innovation, it’s no longer a question of ‘should’, but ‘how’. This year’s most innovative companies show us how it’s done.
Open-source innovation, cross-functional collaboration and a customer-first focus were all hallmarks of 2016’s Most Innovative Companies list, which was released this past week by The Australian Financial Review.
The Most Innovative Companies list is judged and curated by a panel of experts led by Amantha Imber, an innovation expert and founder of consultant group Inventium.
It was an exciting and competitive group of applicants, says Imber, and the quality of the companies that made it into the top 50 reflect this.
“This round was a much stronger field – we had more than 1000 companies nominate for this list,” she says. “This is twice as many as last year, so the judging was much harder. It’s really exciting that the country is finally placing a big emphasis on innovation.”
What does it take to make it on the Most Innovative Companies list?
Entrants are assessed on three criteria:
- A full breakdown of two innovations the company has developed or implemented in the past year. Imber and her team look for how well the problem was articulated, how unique were the ideas for solving it, and what the impact the ideas had;
- An innovation audit of the company, which asks staff to assess the company’s culture and whether it facilitates innovation; and
- A series of open-ended questions about how the organisation approaches innovation, strategy and more.
Several organisations on the list are particularly interesting from an HR perspective. Employsure developed a resource for small- and medium-sized businesses to easily access legal, compliance, employment relations, and health and safety advice – 24/7.
Commonwealth Bank of Australia, which ranked third, won Best HR Innovation for its use of virtual reality in the workplace. Through Oculus Rift technology, the company created a way for candidates to experience their company culture and state-of-the-art office design before joining.
And to help increase collaboration, decrease siloed thinking, and emphasise continuous learning and development, Seamless developed a unique mentoring program to help employees ‘Level Up’ in an area of their choosing. Staff pick a discipline outside their expertise, and for three months they work closely with a mentor in the company who specialises in this area. Bonus: the entire process is gamified.
Winners spanned a range of sectors as well, says Imber, and include use of analog solutions with emerging, mainstream technology. The top 50 most innovative companies highlight some key trends to keep an eye on, says Imber.
Here are her top tips for businesses who want to increase innovation – and potentially make it onto next year’s list.
1. Focus on cross-functional collaboration
“A lot of companies work in silos, and it’s very hard to cut through them,” Imber says. But focusing on collaboration is a sure-fire way to drive a culture where innovation thrives. “We saw a lot of companies bringing employees from different departments or locations together to solve problems.” Afterall, research shows that diverse teams outperform homogeneous ones.
2. Look to open innovation
Imber says many entrants looked at ways to source ideas from outside the organisation. “I think it’s that more businesses are feeling that all the answers don’t have to come from within,” she says. One common way to do this includes asking members of the public or customers for input.
3. Keep customers front-of-mind
Putting customers and clients at the heart of the process was fundamental to how the most innovative companies work, say Imber. These organisations made an effort to understand what makes their customers tick, and involved them when testing new ideas.
4. Think about the innovation process
Before getting started, Imber says companies need to ask, “What challenges do we need to solve?” Once you have an answer, reflect on how the company encourages or stifles innovation, and how these issues can be addressed. “The most innovative companies deliberately build capability around innovation, as opposed to seeing it as something people either have or don’t have,” Imber says.
5. Make time for people to be innovative
In the top 20 most innovative companies, 90 per cent of employees were encouraged by managers to come up with new ideas and challenge the status quo. What’s more, 92 per cent felt comfortable voicing opposing opinions to team members and managers. If you look at the bottom 20 companies, the numbers are more stark: 40 per cent didn’t have an innovation budget that was protected, none had any form of innovation training, and 50 per cent of staff reported zero resources were dedicated to innovation.
“Innovation is a skill that can be taught and learned,” Imber says. “You need an environment where its value is realised, and people are comfortable and encouraged to challenge each other.”
To learn more about innovation in the workplace and how to build it, click here.
You can view the full AFR 50 Most Innovative Companies 2016 list here.