Innovation: panacea or pitfall?

Innovators beware of the enterprise-wide initiative

Are you or your business an innovator? Would you be prepared to invest time and money into large-scale innovation projects to give the whole company a makeover? If so, you could be killing your business. Industry expert Jan Kolbusz (ex-Sealcorp Holdings, Ernst & Young, Baxter, Asgard, WA Treasury and Education Department) discusses the pitfalls of the enterprise-wide initiative.

A little about yourself; what industry experience do you have, what are you currently involved in and what are your main interests in IT?

I am a specialist in the area of technology strategy in the financial services industry and a firm advocate of eliminating inhibitors to innovation in Australian businesses, particularly large corporations. Promoting innovation is futile unless inhibitors have been eliminated

For the past 22 years I've held senior roles at financial management firms Sealcorp Holdings and Ernst & Young, global healthcare provider Baxter, and Western Australia's Treasury and Education Department.

Since leaving Asgard in late 2005, I've founded an IT company and an Australian stock broking and wealth management firm. I am also embarking on a PhD on the topic of innovation, based on my experiences to date.

Can innovation be independently measured?

Innovation cannot be independently measured because for one thing, its definition is subjective to a particular organisation. A company's ability to innovate to provide commercial solutions is difficult to gauge because companies are constantly faced with challenges and opportunities.

Most innovation surveys measure what percentage of organisations produce or adopt something innovative; however, the problem with this measure is that the vast majority of companies comply as 'innovative'. Because this one measure has its usefulness, the Australian Bureau of Statistics, which tracks it every few years across all industry sectors and businesses, determined that in 2003, 40 percent of large Australian business and 15 percent of small business were producing innovative products or services. What the survey does not answer is the question of whether a company is fully exploiting its innovation potential.

Innovation is almost seen as an adjunct to core day to day business when attempts to measure it are made, which often encourages corporations to try to promote it, causing issues and inevitably ends up blocking innovation.

It is paramount that Australian businesses ensure that they are not adopting processes that inhibit innovation. They can do this by avoiding the implementation of enterprise-wide initiatives.

You have spoken of the "enterprise-wide initiative" (EWI) as an inhibitor to innovation - what is the EWI and how does it block innovation?

An enterprise-wide initiative (EWI) is a set of practices or technologies implemented across all business units within an organisation.

By pursuing EWI, companies are putting two things ahead of empowering their workforce to pursue innovation; a preference for adopting existing solutions that come from outside the company, rather than from within; and a preference for all parts of the company to adopt the same solution, irrespective of the extent to which they share the same problem, or suffer the same effects.

This is the inhibiting message that the workforce and line managers hear when the pursuit of EWI is announced, irrespective of the intent of the senior management and what the EWI is about.

I emphasize that it is not the individual initiatives that I am opposed to, but rather the tendency to roll these out as EWIs across all business units as an en masse standardisation measure.

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