In this opinion piece, Russell Craig, National Technology Officer, Microsoft New Zealand, examines how the pandemic has inspired Kiwi businesses to innovate.
At the start of 2020, the world was forced to re-think the way it did business as Covid-19 swept around the world. Businesses had to close their doors, arm workforces with new technology so they could continue trading from home – and some were even forced to tear business plans up and re-imagine the services they offered.
In hindsight, innovation was rife – but it wasn't being driven by the CEO or CTO but by a global pandemic.
We estimate two years' worth of digital transformation took place in just two months, showing that crisis and disruption can also be an opportunity.
Across six months this year, with research house IDC, we commissioned research to help business leaders and organisations look at their own innovation culture and better understand the role it can play in building more resilient businesses, and increase revenue. To read the whitepaper on the research click here.
We surveyed close to 7000 business decision-makers and workers around Asia-Pacific in research which took in the effects of Covid-19, over 400 of whom came from New Zealand. The research asked how they integrate people, process, data and technology to create a culture of innovation, and classified businesses as either traditionalist (antiquated with no innovation), novice (small signs of incremental innovation), adopter (consistent signs of innovation across the four pillars) and innovation leader (strong culture of innovation, reaping the rewards).
It showed the nation is maturing in its approach to innovation. In six months, New Zealand businesses classified as 'innovation leaders' increased by almost 40 per cent from pre- to post-Covid-19.
Business decision-makers say innovation is now a 'must' and are finding it easier to innovate. The impact this is having on improving business confidence is interesting: 43 per cent of businesses in New Zealand see Covid-19 as an opportunity. Of those, 93 per cent see the ability to innovate as critical to building resilience. These businesses are also more confident they will grow revenues compared to their peers.
Innovation leaders took a slightly different approach to the average New Zealand business over the last six months. Since the pandemic, they have been focused on re-thinking and re-designing business models and digitising products and services or creating new ones.
We only need to look at Microsoft's customer network to see examples of how businesses have been re-positioning themselves to reap rewards.
The Farmlands Co-operative is New Zealand's largest rural supplies co-operative, with 82 stores providing more than 70,000 shareholders with vital farming supplies, from clothing to seed and dog biscuits to water pipe. Farmlands was deemed an essential service in lockdown – but had shut down its e-commerce platform a few months earlier, so had no way of selling products.
Farmlands had the experience, and technology set-up, to act quickly – setting up an online Click and Collect service. Product photos and information were collated and a new ordering system was integrated into Microsoft D365. Farmlands was able to digitise the way it did business in a matter of days – meaning the business could keep trading.
In fact the new website did more turnover in two months than the previous site had done in a year.
Not all Kiwi businesses were set up like Farmlands. Most have had to prioritise introducing new ways of working, as well as leveraging data analytics and strengthening corporate vision and agile decision-making.
While innovation leaders are focusing on high-level decision-making that will fundamentally re-imagine the business and the services it offers (driving more revenue and improved resilience), the bulk of Kiwi businesses weren't set up to let staff work from home or didn't have the technology in place to provide data and insights to make more informed decisions.
When they should have been driving forward, Kiwi businesses were scrambling to keep business ticking over. With systems and processes in place to enable remote working, business leaders can focus on business models, think more digitally and provide better products and services for customers – putting them in good stead for the future.
All businesses, including innovation leaders, plan to focus on skilling to future-proof their business. The growing digital divide and lack of digital skills poses a risk; the business community is aware of this.
Microsoft recently launched a global skills initiative aimed at bringing more digital skills to 25 million people worldwide by the end of the year – a great start, but we can all do more.
Learning from the best
While New Zealand businesses do well, and score highly in many of the categories, we are behind leaders in every aspect of innovation. Leaders have developed a culture promoting disruptive ideas and encouraging innovation as a corporate value (82 per cent vs New Zealand's 76 per cent). Leaders invest in growing enterprise-wide capabilities and skilling initiatives (70 per cent vs 57 per cent) and they invest in disruptive technologies to drive innovation and business transformation (92 per cent vs 61 per cent).
Taking that into consideration, we've identified best practices organisations can adopt:
- Unlock the potential of their people: create an organisational culture embracing risks and discovery and is focused on driving innovation through ongoing learning, knowledge sharing and the right talent and skills.
- Drive sustained innovation: create a systematic approach to innovation from ideation to commercialisation.
- Capitalise on the value of data: improve organisation decision-making, re-design business models and develop new revenue streams, leveraging data.
- Digital technology as the foundation of transformation: accelerate and harness the power of cloud. Ensure security, simplification, and agility through technology.
Looking ahead, as New Zealand's access to world-leading technology increases, like Microsoft's datacentre region in Aotearoa, we think New Zealand businesses are well-positioned to become Innovation Leaders and reap the rewards.
Business leaders need to start working towards integrating people, process, data and technology to drive an innovation culture fuelling a stronger and more successful economic recovery.