In November 2017, KPMG obtained detailed qualitative data from almost 200 business leaders in Australia.
Survey participants were asked to identify their key issues of concern and to offer their perspectives on why, for them, these issues rose above the pack.
“No matter which way you slice the data, the same issue dominates: digital and innovation,” KPMG Australia CEO Gary Wingrove said.
“In this way, 2018 looms as a year of known unknowns. The nation’s leaders understand that disruption looms around every corner. They are now clear about what they need in order to respond and seize opportunity: a culture of innovation, especially in the digital space.”
In its report, KPMG points to a number of recent developments that have Australian business leaders spooked, such as the presence of American giant Amazon, Tesla’s activities in South Australia and developments in social media.
“Sometime next year, it is likely that Facebook will allow its 15 million active Australian users to use its Facebook Messenger service for payments,” the report said.
“So, it is perhaps not surprising to see ‘Digital and Innovation’ ranked as the clear number one priority issue for resolution in 2018.
“The rapidly evolving Australian landscape shows what is at stake when Australian businesses indicate they need to get their digital and innovation houses in order.”
While “digital” has gone mainstream in terms of the executive agenda, KPMG sees innovation as an area where we continue to lag as a nation.
“There are some positive signs, with several of our largest companies setting up venture arms and innovation labs. Some have even invested in training for new ways of working, such as Agile methodologies or Design Thinking,” the report said.
However, the professional services firm argues that in order to make these efforts stick, concerted leadership is required. The report suggests that the real innovation challenge facing Australian businesses is cultural, and “to change culture requires leadership”.
“If Australian business leaders are serious about tackling the digital and innovation challenge in 2018, we would do well to embody some clear character traits from those who do it best. Risk taking and failure will be expected and even celebrated. There will be a bias for action and experimentation. And leaders will actively listen to their people, customers and communities to establish a real dialogue for idea generation and learning from experimentation.
“The organisations that do this well will set themselves up for growth. They will be better prepared to face disruptive forces and potentially harness those same forces for their own benefit.”
[Related: New York giant enters Aussie mortgage market]