History is rife with examples of large companies, and entire industries, that have been overtaken by their more nimble competitors (think Kodak in the early 2000s and the taxi and hotel industries of today).
For many large organisations, creativity and innovation are elusive steps on the path to competitive advantage. It's not that they lack the potential to drive an 'ideas boom' on the scale articulated by Prime Minister Malcolm Turnbull this week. Rather, the problem is that when good ideas surface, layers of bureaucracy and management slow down their development and speed to market.
This is especially true when it comes to digital innovation.
The danger in going slow is that it can lead to inertia -- which can have a devastating effect on an organisation's ability to remain relevant and stay competitive. That's why the release this week of the federal government's innovation statement is a wake-up call for business leaders everywhere: adopt an innovative mindset, or be left behind.
To overcome inertia in our own organisations we need to stop trying to assimilate the latest business paradigm and embrace a new way of thinking that allows us to keep up with the pace of disruption. After all, it's the growing rift between slower, larger organisations and agile start-ups that has triggered the powerful wave of disruption we're seeing today.
In financial services, there are some great examples of creative and innovative thinking already, such as Sydney-based Fintech hub Stone & Chalk, which fosters partnerships between big business, technology start-ups, academics and government resources. Ventures like Stone & Chalk set the benchmark for innovation in big businesses for one simple reason: keeping pace with the exponential rise of technological capability requires us to think exponentially.
This new 'exponential' mindset has taken off in the US and entire institutions have been established to study the concept of how to apply exponential thinking to large organisations.
The leaders who are doing this well are challenging the status quo and creating cultures in which employees are encouraged to come up with -- and are rewarded for -- disruptive ideas and new pathways to success.
These leaders are building their brands from the inside out. They are developing their businesses with a strong ethical core, supported by a vision, values and purpose that help employees make decisions and measure success. They are breaking down the barriers and hierarchies that stifle collaboration and creativity and are giving their people a voice. These leaders are urgent leaders.
I've been fortunate enough to meet several of these urgent leaders and have had the opportunity to ask their advice on how to adopt an exponential mindset within my own business. It hasn't been easy. But I've distilled the process into three steps:
First, identify your champions of change. These are the individuals and small teams who are curious, creative and can accelerate ideas. Importantly, you need to protect your champions to ensure your ideas get to market. Champions never give up on the company vision.
Second, neutralise your enemies. Bypass the dissenters in your organisation who will find any number of reasons not to support you. Don't let your champions engage in battles with those who are trying to block them while they work to get ideas to market. As Chinese military general Sun Tzu said: "Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win."
Third, combine fast and slow thinking. Collect, analyse and understand your data (slow thinking) and be agile enough to develop lean prototypes that can be tested and put to market quickly (fast thinking). To stay competitive, your business needs to move quickly, execute quickly, and fail quickly. This means as an urgent leader, you need to learn quickly from your mistakes.
Winston Churchill once said: "The empires of the future are the empires of the mind."
With innovation now front and centre as a strategic pillar of the Australian economy, there is a real opportunity for business leaders to harness exponential thinking and become urgent leaders in their own organisations.
Joyce Phillips is ANZ's CEO of Global Wealth and Group Managing Director of Marketing and Innovation.