The Innovation Myth
At PKF we enjoy working with start-up companies. The excitement mixed with trepidation and the sheer roller-coaster experience involved with starting something potentially great is very professionally challenging and rewarding.
Still, as entrepreneur supporters we get annoyed when apparent experts imply that all innovation comes from start-ups. Although the words “start-up” and “innovative” are sometimes used as synonyms, the concept that innovation is solely conducted by recently incorporated entities that do not yet have products or services is an absolute myth and a dangerous one at that.
Each year, Forbes lists the 100 companies globally which it considers to be the most innovative. In 2015 the list contained a number of companies that you would not be surprised at; Tesla, Salesforce, Amazon.com and, one of PKF’s clients, Netflix. All of these are relatively young companies, “tech stars” if you like, but plenty of names on the list are very long-established businesses and names synonymous with “old world” businesses. Hermes International was established in 1837 and its logo, since the 1950’s, is a Duc carriage and horse. Their logo is a mode of transport forgotten except in period piece dramas but they make the list of the most innovative companies in the world.
Hotels are said to have been disrupted by AirBnB and other similar businesses but Marriott International ranks near the top of the list. Visa, another company under pressure from fin tech start-ups and tech giants making moves to compete against it are still able to make the list.
Here in Australia, Telstra is another terrific example of a company that constantly asks itself how can we provide our customers a better product, cheaper than we currently provide it while making a better margin than we currently do?
Even at a cursory glance it is clear that mature, long established, highly profitable businesses can be the cradle of innovation. In fact, they must be if they intend to remain successful. What we love to see in our clients is a culture that constantly questions how things can be done better. How can we create more with less? How can we give our customers better service, faster delivery, more choice and a lower price while actually making more money for ourselves?
Understanding that start-ups, established enterprises and mature businesses are an essential part of Australia’s innovation ecosystem is vitally important. If we support and celebrate one but not the other we will never realise the benefits that innovation can bring to our businesses, our economy and our society.
Contact our specialist business advisors to find out how your business can harness the power of innovation. Click here to find your nearest PKF specialist.