The first in our series of interviews we chat to Kevin Young from Australian Unity. What stands out about this interview relates to the fact that resource dependancy, as Clayton Christensen puts it, is a challenge and common theme for any business that demands results from their innovation initiatives.
Kevin Young has all the hallmarks of an expert. As a student studying the intersection of design, engineering and marketing, he still remembers walking down the supermarket aisles and thinking ‘Who comes up with stuff like this?’ The Bachelor of Technology student's eyes had been opened to fast moving consumer goods and he's been innovating in that space ever since. Over the years, he has worked at organisations like SPC, Lion Nathan and CUB and has been involved in a raft of new projects and products that we all love to this day.
‘Who comes up with stuff like this?’
The Consumer Good Industry might seem like an unusual place to kick-off a series of interviews with industry innovators. It's by no means a new industry and doesn't exactly scream innovation when placed alongside the superstars of the digital age. But that's perfect for what we are trying to do here.
If you can go into a space as deeply established and picked-over as Consumer Goods and, in a short space of time, do things better than most then you can be sure there's been some serious innovation along the way. Innovation is a perspective, a way of viewing things. It is not a huge light bulb moment you may or may not have and it is not necessarily getting in at the ground floor of a new technology and living in certain zip codes of America. If you can synthesise audience data, product and social trends – and get those around you to do the same - then you're off and running.
Kevin proves this as well as anyone.
A conversation about innovation with Kevin inevitably begins with a conversation about Australia's Yellow Pages. And it's a powerfully simple case study. ‘Yellow Pages had something like 99% market penetration’ he says. ‘So if you ask everyone in the room to put their hand up if they have used Yellow Pages, generally, everyone puts their hands up'. Then he asks who currently uses Yellow Pages?
‘Yellow Pages had something like 99% market penetration’
As he points out, it's scary to think that a large corporate can have all those resources (to throw at innovation), all those employees (many of whom were no doubt clever, innovative thinkers) and such a large market penetration (to test their innovations and gather data on) yet it didn’t have the foresight, culture or agility to survive in the market.
'Innovation is particularly important when our lifestyles and people change.'
But these days and forever more, when is that not occurring? It's the new golden rule. The foresight which Yellow Pages struggled to have , Kevin points out, was that the speed with which our lives are changing over the last 20 years has been more radical than probably the last 100. The constant change to the way we live our lives has made businesses realise that innovation is a must-have as opposed to a nice-to-have.
'..businesses must realise that innovation is a must-have as opposed to a nice-to-have.'
Within ten years there has been a seismic shift in attitudes toward innovation coupled with a great leap in data-driven consumer insights. 'In the 80’s or 90’s innovation would be seen as “People are on the run now, let’s do a portable drink and instead of 500ml, lets do 200ml” Kevin says. 'But now, large corporates understand that with such fast technology and societal change, businesses have to really think about why people need a certain product or service or, in many cases, an entire business model.'
But even with this knowledge, and with this shift in attitudes to innovation, large corporations all around the world are struggling to innovate. The first hurdle that Kevin identifies is that large companies have more barriers than start-ups in innovating. For example, if an opportunity is identified and you want to test the idea and gather the appropriate insights you have to get a number of big unwieldy departments involved. You also can't forget the systematic red tapes such as legal and branding.
Such compliance hurdles are a given in today’s society, especially in any large organisation but these aren’t even the largest hurdles to get past. Perhaps the most daunting hurdle is, of course, money and time. As Kevin puts it, once you’re talking thousands of dollars, it's difficult to get buy in. For such an investment, the senior management and board would want to know what the return was. And that's where the issue lies. This attitude either informs (or is informed by) the difficulty in getting people (staff) involved in projects where things are 'a little bit different’. They don’t want to give up their time resource to assist the project because it’s seen as above and beyond their work and, as Kevin puts it, 'culturally, people don’t like working on something that is perceived to have a high chance of failure.'
"They don’t want to give up their time resource to assist the project because it’s seen as above and beyond their work. That is resource dependancy at play."
Large corporates are more often than not conservative and cost-conscious and are looking to invest in projects that will bring in quick and/or tangible returns that they can easily report on. The challenge for Kevin - and all innovators - is getting access to the resources that are necessary for innovation to take place. In other words, getting the money and the time. Innovation doesn’t come quickly and it can take a few failures to bring success.
What have we got to lose?
But, as Kevin asks, with technology and our lives continuing to change so quickly, what is the alternative? It is here we see why he likes to open these conversations discussing Yellow Pages. The answer is self-evident. Google giving their staff a period of time each week to innovate has become a part of modern corporate folk-lore but, as Kevin likes to point out, when we hold a book in our hands we are holding one of, if not the, most profound pieces of technology the world has ever produced. Likewise, innovation lies in unlikely places.
While there's been low points in Kevin's quest to bring innovation to his sector, he is at pains to illustrate how these, as much as the wins, informed his understanding of the inner workings of innovation.
He remembers one time getting a call close to midnight and was asked by someone in the factory that 'the date stamp doesn’t work, what do I do?'. Kevin was confused...he was just the marketing guy, yet he was doing the roles of manufacturing and product manager at the same time. After asking if they had checked the manual, Kevin found himself wondering what he had gotten himself in to. 'I was certainly flying the flag alone on that project' he says.
'...I remember getting a call close to midnight and was asked by someone in the factory that 'the date stamp doesn’t work, what do I do?'. I was confused...I was just the marketing guy'
'It's experiences like that make me say with confidence that the big thing I've learned is you’ve got to build a culture around innovation. You’ve got to give people a level of comfort around failure. We’re not going to point the finger. We’re not going to shoot people. At the end of the day, when people aren’t at a level where they understand that, their only concern is their own security. So you’ve got to give people the comfort'.
While the outside eyes of people experienced in leading the innovation process is critical, if the culture of the client isn't open to that process then the rubber will rarely hit the road. If it is true that, as no lesser source than a highly successful CEO of IBM has said, 'Culture isn’t just one aspect of the game—it is the game', then it is not hard to see innovation as a critical pillar of that culture. Just ask Yellow Pages.