The most innovative companies in Australia and around the World have a few key ingredients in common. Trends locally and internationally in 2013 include the continuing rise of global small businesses taking on established corporates - with fewer big brands making the cut in 2013. This report is an excerpt from Jenny Vandyke's new book, The Innovation Recipe: Key Ingredients for World-Class Results in Big Business http://www.zumbara.com.au/the-innovation-recipe.html

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Copyright Jenny Vandyke 2013
www.zumbara.com.au
In this guide
LEARNING FROM THE WORLD’S MOST INNOVATIVE COMPANIES..............................1
The Fast Company Top Ten..........................................................................................................2
DO ONE THING, DO IT BRILLIANTLY, THEN GROW.......................................................2
AN AUSTRALIAN PERSPECTIVE – AUSTRALIA’S MOST INNOVATIVE COMPANIES .....3
The BRW Top Ten...........................................................................................................................3
AFTERWORD ..................................................................................................................4
Learning from the world’s most innovative companies
What great ideas have the world's most innovative companies come up with? Fast Company's 2013 list
of the World's Most Innovative Companies is a fascinating insight into what it takes to be innovative.
Some of the results are quite surprising - some of the brands we often associate with innovation have not
made the cut, or else have been a fair way lower down the list than you might expect. The only major
multinational brands to make the Top 10 in 2013 are the companies that have found ways to reinvent
what they do, and they're also not afraid to take risks and experiment.
Nike tops the 2013 list for branching out from their highly successful sporting apparel and footwear
product lines into wearable tech. They've also reinvented their manufacturing processes with a new shoe
which substantially cuts down on manufacturing costs without compromising quality. They acknowledge
that these successful ideas are amongst many others that ended up on the cutting room floor, never

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getting past the experimental phase. They understand that investing in experimentation is critical to
coming up with those few breakthrough ideas.
Amazon came in at Number Two, by reinventing their distribution processes to enable same day delivery
in key markets, an approach they are rapidly expanding on.
Finally, Target scraped in at number ten, for reinventing their approach to Retail. In the US, Target is a
master of the cavernous large scale approach to retail. However, with the retail slump and unique CBD
locations coming available, they have started opening smaller scale stores, with a ‘keep it simple’
approach - only stocking key items in sizes appropriate for CBD locations (think six pack not a slab of
cans of soup). These CBD stores are also offering products specifically targeted to individual markets.
They've had to adapt their distribution approach along the way, with multiple deliveries per week to
make sure the stores stay stocked when there's less space for onsite storage.
The Fast Company Top Ten
1. Nike
2. Amazon
3. Square
4. Splunk
5. Fab
6. Uber
7. Sproxil
8. Pinterest
9. Safaricom
10. Target
Do one thing, do it brilliantly, then grow
The other thing we can learn from the Top 10 is that, when it comes to innovation. bigger is not always
better, and this is getting more the case every year. With the explosion in the App-based approach to
software development, global small businesses that do just one thing but do it brilliantly are taking the
world by storm. Daniel Priestley explores the Global Small Business phenomenon in his latest book, The
Entrepreneur Revolution. Let’s take a look at a few examples.
Fitbit has become a leader in pedometers with an incredibly feature-rich solution in a minimalist package.
This tiny, elegant pedometer does away with the bulkiness of many of its competitors (I always loved the
idea of using a pedometer to measure my daily step count but didn't particularly want to accessorise my
work suits with a bulky pedometer). It's also incredibly accurate (more accurate than many of it's
competitors, measures how many floors you've climbed as well as your step count, and syncs wirelessly to
your smart phone or computer so you don't have to enter your step count manually. Fitbit also has a
feature rich online dashboard, automatically tracking your progress against goals, giving you badges
when you hit 10,000 steps for the day, or have climbed 1000 lifetime floors, and allows you to sync up
with friends (my sister and I cheer each other’s progress despite living more than 800 kilometres apart).
Fitbit does one thing and does it brilliantly, starting simple and adding features and apps along the way.

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Evernote has become a leader in knowledge management, or as I like ot think of it, outsourcing your
brain. I no longer use post it notes stuck to my computer screen to remind myself to do things, I jot it down
in Evernote. I can take a photo of a product I want to research on my smart phone when I'm out and
about. I can save text, images and URL's from a web page I've visited for articles I'd like to read or
reference. And the feature set keeps getting better and better. You can share notebooks with team
members privately within your team, saving final versions of key documents. Powerful tagging and
search means that you can easily find that note you jotted down 3 weeks ago. The location you took the
note is tagged too, so if you went to a conference in Sydney you can search by location and find all your
Sydney notes, sorted by date. Evernote does one thing and does it brilliantly, starting simple and adding
features and apps along the way.
The Fast Company list is dominated by global small businesses that do one thing (or started with one
thing) do it brilliantly and are taking on the biggest brands in the world. Evernote is now taking on the
likes of Microsoft Sharepoint and Google Docs with it’s feature rich Evernote Business offering. This trend
is making it even more challenging for big business to innovate. Those that are succeeding are finding
ways to focus, start small, do it brilliantly. Starting with one new shoe at Nike. Starting with one new
store at Target. ,Starting with one city at Amazon. Start small, do it brilliantly and grow from there.
An Australian perspective – Australia’s most innovative companies
The Business Review Weekly’s Most Innovative Companies list of 2012 paints a similar picture for
Australian businesses. The only major brands in the top ten are the Commonwealth Bank of Australia
(CBA) at number two and Coca Cola Amatil at number four.
The BRW Top Ten
1. ClickView
2. Commonwealth Bank of Australia
3. Blue Chilli
4. Coca-Cola Amatil
5. Skybridge
6. Buzz
7. Ikon
8. Planet Innovation
9. Mail Call Couriers
10. AbbVie
It's pretty impressive for Australia’s largest bank to end up at number two on a ‘most innovative
companies’ list. Banks have unique challenges when it comes to innovation. The consequences of getting
things wrong could mean that people don't get paid or can't access their accounts - you can't put a beta
version of a new EFTPOS machine in to a local store - you've got to be 100% confident it's all working
perfectly before you launch.

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All of the major Australian banks are in the midst of replacing their core banking systems - replacing
multiple interconnected legacy systems that have been in place for many years. The longer it's been
since you've done a major change, the more ingrained your current processes are, the older your
technology is, and the harder it is to change. Banks also have the challenges of a (rightly so) strict
regulatory environment. There's nothing like saying "you can't implement that because it might impact our
banking licence" to get a management team's attention. Banks also rely on a reputation of trust with their
clients - it's a big step to trust someone with your money. Gaining a reputation as a risk taker is not
something the Big Four would generally court.
As a side note, interestingly, this tight regulatory environment has also been an incredibly powerful
positive for Australian banks. The Aussie banks were, on a global scale, largely unscathed by the GFC
because we had tighter controls in place, and international financial markets have been struggling to
play catch up with their own regulations. As a result, Australia's Big Four are, five years later, still in the
top twenty safest banks in the world.
Despite the challenges of innovation for banks and other large conservative corporates, CBA is finding
ways to innovate by being open to new ideas and making bold decisions. They are ahead of
competitors in progress in their core banking replacement. They have launched an internal Innovation
Academy to encourage and foster bottom up ideas. They have also shown boldness in going it alone on
some big decisions. In banking there are often times when the banks need to cooperate to get things
done. Recently the Big Four collaborated on a joint initiative to move from weekday merchant processing
to seven day merchant processing. The joint initiative fell through due to complexity and cost issues, and
CBA made the bold choice to go it alone, and despite the risk of going it alone, the Return on Investment
(ROI) has been well and truly worth it.
In the tough environment we've been in over the last few years, it's promising to see that many Australian
companies are making bold decisions and reaping the rewards. While we're talking about the banking
sector, it’s worth a look at NAB's "break up" campaign where they broke away from the age-old banking
tradition that everyone ups their interest rates when the RBA does. The break up campaign courted
controversy, critical acclaim (winning a prestigious advertising award at Cannes), and again, the ROI has
been well and truly worth it.
Afterword
This is an excerpt from The Innovation Recipe: The six key ingredients to dish up world class results in
every team, my new book launching on 1st June, 2013. If you would like to be notified when the book
comes out, or you have any feedback regarding this excerpt, please send an email to
innovationrecipe@zumbara.com.au
If you have any innovation questions you’d like answered, or you’d like to join the Innovation Recipe
conversation, you can join the Innovation Recipe group on LinkedIn or join my Bloomfire community.
Kind regards,
Jenny Vandyke.