Seven in 10 small to medium-sized enterprises (SMEs) are failing to innovate due to unhealthy workplace culture, according to a new Microsoft report.
The report, entitled Culturing Success and compiled from survey responses of more than 500 companies, found that 67 per cent of SMEs fail to classify as innovation leaders, with almost one in four SMEs demonstrating little or no appetite for innovation.
“Our research reveals that many businesses find it difficult to develop a culture of innovation because of barriers including working in silos, fear of failure, employee distrust and poor collaboration,” says Pip Marlow, managing director of Microsoft Australia.
Culturing Success also found SMEs that are adept at responding to change, threats and opportunities in their markets (innovation ‘leaders’) recorded stronger performance across total revenue, business efficiency, market share, staff satisfaction and customer loyalty.
The report was the result of collaboration between Microsoft, corporate anthropologist Michael Henderson, and research agency AMR. It was released as part of Microsoft’s Joined-Up Innovation initiative, designed to aid businesses in embracing innovation.
Bruce Billson, Federal Minister for Small Business, welcomed the report, saying: “We know small business people are time poor, but innovation within business processes can drive efficiencies…. improving workplace culture drives innovation so it is a good investment to make.”
Figures from the Australian Bureau of Statistics (ABS) also show only 42 per cent of Australian businesses undertook innovative activities in 2012–13 and that very small businesses, i.e. up to four employees, were less likely to innovate than larger peers.
“Innovative businesses are generally successful businesses, constantly looking at ways to improve and to grow their business,” adds Mr Billson. “As the Intergenerational Report released by the government demonstrates, we need to improve our productivity as a nation and get more small businesses to become leaders of innovation.”
In addition to the report, Microsoft has launched an online tool to help SMEs measure their innovation performance and receive tailored guidance.
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