In many parts of our great State, employees have been stood down and businesses mothballed as owners come to terms with the challenges of running a business in the face of COVID-induced uncertainty.
The 2020 lockdown, in some ways proved to be the curtain raiser for this more extensive, harder lockdown.
But, if there are any silver linings to look for, the fact that businesses were forced to become more agile and more focussed in the first lockdown can surely count as one.
In the segment of the market that I focus on (mid-market businesses across Sydney and Greater Western Sydney) I have seen a number of businesses deploy differing strategies and tactics to see them through these economic challenges.
Businesses in 2020 were focussed on employee wellbeing and safety, cash flow forecasting and negotiating with key stakeholders – landlords, suppliers and funders.
We also saw a radical increase of board involvement in business decisions – both to (probably) support CEOs navigate the uncharted waters, but also a measure of stronger corporate governance.
This lockdown is different. The financial pressures are exacerbated given there is no JobKeeper-like package (although smaller State and Federal packages are available to individuals and businesses) and the Delta infection rate remains stubbornly high despite very limited community interaction.
But, on the other side of the ledger there is a sense of familiarity about what lockdown means, how it feels and what we can expect from the economy when we emerge.
The rapid rebounding of many parts of the Australian economy after the pandemic’s first wave has given businesses and business owners hope and to some extent, confidence that while times are tough now, the Australian economy is resilient, and things will get better. It is for this reason that many business leaders are looking over the parapet and investing in innovation.
There is a renewed focus on post-pandemic business strength. This, more often than not is manifesting in doing things better – or innovation.
I recently gave a lecture to the MBA students at the Macquarie Graduate School of Management. This is something I have now done for a few years, and every year, the topic of innovation is raised – probably because it is such a well-known, but poorly understood concept.
Many people believe innovation necessitates the launch of a new product or service. This could be the case but true innovation moves beyond new products or services.
Ideo – the global design and innovation firm defines innovation simply as: “The ability to generate and execute new ideas”.
And therein lies a definition and a lesson for all of us. Innovation can result in the launch of something new but new ideas that are successfully executed also classify as innovation.
Putting the customer first
Businesses can innovate almost any aspect of their business or operating model. Think process innovation, price innovation, brand innovation – and the list goes on.
Through the challenges of the pandemic, I have been fortunate enough to both see clients innovate and help them design and implement innovations.
Recently, I have spent a lot of time working with the CEO and Executive Team at the Rawson Group (the business that builds Rawson and Thrive Homes).
“Building better, together” is the Rawson Group’s promise to the market and to deliver on this promise, the Rawson Group has innovated and continues to innovate across many aspects of its business.
As with many large organisations that deal with multiple stakeholders across their value chains, Rawson Group identified a number of innovation opportunities to enhance customer excellence.
By putting the customer at the centre of their business, the Group CEO and Executive Team identified a need to streamline the customer journey, reduce manual and internal processes and provide certainty and clarity of hand-off points to different teams.
Fundamentally, these innovations were aimed at reducing complexity – and with that, increasing customer NPS and reducing cost to operate.
Is it working – early results are promising. Doug Phillips (Rawson’s General Manager for Sales & Marketing) says year to date sales are ahead of budget, double those of the prior year – and the organisation is winning market share too.
There are many case studies like that of the Rawson Group. If I look across the projects I have delivered over the years, here are the key takeaways:
• Organisational alignment greatly enhances the probability of successful innovation. But it should start at the top
• There is value to be had by starting small – identify complex or convoluted processes and start from there. Bank the wins along the journey
• Leverage existing, or consider investing in technology to drive efficiency and scale. Break the nexus between revenue growth and headcount growth
• There are always innovation (or continuous improvement) opportunities – truly innovative companies consider innovation to be part of BAU
Dale Khoury is a partner at KPMG and leads its mid-market advisory practice in Parramatta. Dale’s areas of expertise are in strategy development and implementation, operational improvement, finance optimisation and governance. E: dkhoury@kpmg.com.au
