For all the profitability they currently enjoy, Australian companies have a "date with defeat" unless they stop inhibiting innovation and learn how to keep abreast of changes - at macro and micro levels - that are occurring at a faster pace than ever before, according to Jan Kolbusz, a serial entrepreneur who is probably best known to the ICT community for the time he spent as director of technology and operations at Sealcorp.

Innovation - the introduction of new ideas that improve a company's performance - could be the saviour for Australia, Kolbusz believes, yet companies are stifling innovation with the very activities that are intended improve performance. It has become a special problem for Australia and has shown up as a detrimental factor in studies by the Australian Bureau of Statistics. "While big Australian businesses say innovation is amongst their top priorities and one of their major contributors to long term profitability, only 2.5 percent are being innovative in their business processes," Kolbusz says. "This major threat to Australia's innovation needs can be turned into a major opportunity."

But what has happened to innovation? Why is it now missing and where did it go?

"Over the last half century, there has been a sense that as companies have grown bigger, innovation has dropped. But big companies are able to compensate by acquiring innovation," Kolbusz says. "The problem is that a country like Australia, which is neither massive nor tiny, could get lost in the middle and our companies won't be in a position to compensate for that lack of innovation by acquiring it."

The common message that big companies should become innovative by starting to behave like small companies is not the answer, Kolbusz believes. "That's a bit simplistic. Most small companies just muddle along because they haven't got the time or the resources to bring in the established best practices; probably don't even have an awareness of what they are. They're a small bunch of clever people drawing on whatever resources they can lay their hands on."

And corporate plans to promote innovation through trite approaches, like installing brain-storming rooms or making "innovation" ingrained in revenue models, will not necessarily do anything to promote innovation either. "I don't have any problems with those things, because they don't do any harm unless there is something inhibiting innovation, and that has been the issue."

The answer is simpler to state, but less easy to implement, Kolbusz says. "I liken it to hosting a party; if you invite the right guests they'll make the party. Every place will be innovative if there is nothing in place to stop it being innovative. While so much of the cultural focus is on what you can do to promote innovation, you must first make sure you're not doing anything to inhibit it."

Curb Your Enthusiasm

But no company wants to stifle innovation deliberately, so how and why is innovation being curbed? Kolbusz points to the not-so-distant past, when for any sort of challenge that was encountered in an organization, there was an established practice which addressed the problem and, if implemented well, ensured the organization kept doing well.

"Now things are changing faster than researchers and consultancies and academics can arrive at established, proven solutions. This means that the successful companies are the ones that are going to be capable of finding more of the answers for themselves when the answers for everything don't yet exist. I think it's that simple but that powerful.

"And the reason companies are inhibiting innovation is that whenever they look at implementing some of these established practices - which do have their place - they're doing it as an enterprise-wide initiative (EWI). EWI is a fancy-sounding label, but it's accurate in the sense that when they take one of these initiatives and want to implement it across the whole company, as one big initiative, they inhibit innovation, I believe," Kolbusz says.