OPINION: Innovation makes good business sense

BRAZILIAN company Semco made its debut on the internet in July 2005. Prior, it was a manufacturing company in decline. The April 2013 issue of Forbes reported  Semco had grown 900percent in 10 years. 

The company’s modus operandi includes employees setting their own work schedules; early workplace departures when there is not much to do; employees giving  themselves days off; changing work stations; and reviewing your own salary every six months.

These changes were made by Semco  chief executive Ricardo Semler, the ‘‘Caring Capitalist’’.

 What would your human resources department say?

You will find no micro-management at Semco. It’s about productivity, empowerment, ensuring employees receive gratitude and treating them like grown-ups. 

Many would have heard of Google’s 20percent Time, under which employees were given time to work on projects of their choosing.

Recently it was announced that Google was ceasing this practice. Rumour has it they got caught in the “measurement” trap.  Innovation is hard to measure straight up. Just ask Dyson.

He recorded more than 5000 failures before he was happy with his bagless vacuum cleaner. And Edison suggests his 10,000 failures were 10,000 steps towards success. And Apple goes through 50 prototypes before it gets to the phone/ipad that will be released.  How do you measure that in terms of KPIs? Do those experiments that didn’t quite cut it go in your assets or liabilities column?

If you’ve been tempted to cost-cut your way through uncertainty, you might reconsider. Statistics recently released by American Express suggest that improving your service capacity and products you offer could lead to an increase in revenue. The 40per cent of businesses that practiced cost-cutting had a decline in profits.

We are only too familiar with the recent declarations that the mining and resource boom is over.  Cost-cutting is being exercised to the point of withdrawing community funds by some mining companies.

 Sirius Minerals, the owner of a salt and potash solution-mining project in western Queensland, is testing a process that uses wastewater from a nearby coal seam gas site for its mining project.

 If the tests are successful, the winners will be Sirius, the coal seam gas company and the environment.

 Sirius entered this project in the Business Review Weekly’s 30 Most Innovative Companies 2012 competition and took out 11th place.

The Hunter has been recognised for leadership and innovation.  

Transport hydraulics company Mega Pacific was recently awarded BRW’s best mid-market leader award.  In June, SiDCOR Chartered Accountants was named in the Top 20 Great Places to Work. And in September SiDCOR hosted the 30 Most Innovative Companies breakfast in Newcastle.

 Successful companies embed innovation into their company culture. Everyone benefits.

Christina Gerakiteys runs Ideation at Work and blogs on innovation.