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Australian companies have so much unrealised potential


There are so many examples of exciting Australian companies and initiatives. Why aren’t we doing a better job of ensuring their success? Brad Howarth considers the issue of our squandered potential.

It’s been a while since I’ve written a column for Anthill, and a few ideas have accumulated over that time.

Early in May I caught up with Steve Vamos, former CEO of Microsoft in Australia. These days he is working on a few different ventures, one of which is the Society for Knowledge Economics.

It has a pretty audacious goal – to strengthen leadership, culture and management in Australia by encouraging the development of people, to maximise their full potential. This should lead to a boost in innovation and workplace productivity.

Most people will tend to say that they are fully utilised at work. But Steve says if you ask someone whether they are living up to their full professional potential, they might say that they are probably 60 percent there.

If a manager was seen to be only realising 60 percent of the potential of their fixed assets, they would most likely be fired. So is it acceptable to let people only fulfil 60 percent of their potential?


I recently gave a speech to the customers of the network service provider Pacnet on the future of digital services in Australia. I used AIMIA’s Digital Services Index (developed in conjunction with Hyro and IBM) as the inspiration, particularly the findings that Australian businesses will invest more than $17.9 billion dollars in digital services in 2009, and will target 40 percent of customers through digital initiatives in 2009.

Digital services are changing the way that companies are built. Why buy servers when you can rent hosting and processor power from Amazon? Why buy a sales management system when you can rent one online from Salesforce.com?

The Australian start-up Atlassian is a good example. In terms of fixed infrastructure, the last time I spoke to them all they owned was a couple of test servers. But today they have built their business to employ 160 people in four counties with revenue of $35 million – all built from digital services.

A survey of Anthill’s Smart 100 shows a similar interior set-up. But as these companies grow they should have a distinct competitive advantage over their larger competitors, through being more flexible in configuring their internal systems to meet new challenges.

Start-ups often fail to invest in the essential business management processes – once they grow to any scale they break down under the weight of poor operational infrastructure. And in terms of maximising human potential, simply renting a human resources system online is no replacement for management experience.


In April I was invited by Pyksis and the Victoria Department of Innovation, Industry and Regional Development to host its Regional Innovation Conference in Bendigo. Traditionally, rural innovators focus their efforts on solving problems they face themselves, such as irrigation or pest control. But, increasingly, the proliferation of digital services is allowing non-farm-sector businesses to grow from regional centres.

Technologies on display included a sports training system, an electric car, emergency accommodation and a free-standing wind power generator you can set up in your backyard.

Innovation is not anchored to metropolitan areas. Innovation can come from anywhere, provided there is the willingness and the materials needed for it to thrive. Over time, however, I see no reason why regional centres can’t grow to become centres of innovation in their own right.

It starts with good ideas. Then good educational facilities and strong communications links are essential. The missing element, as always, is available capital – and management experience, but that is no different anywhere else in this country.


Overshadowing much of the conference was discussion of the global financial crisis and the pseudo recession. But contrary to what many people might think, and despite the doom and gloom in the marketplace, innovation can thrive in times of adversity. History has shown that many of the world’s most successful companies have got their start during an economic downturn.

If you can hone your processes during the lean years, you should be focused and ready for when the market swings back up again.

Now more than ever, companies and society in general are in desperate need of innovation – either to cut costs or to drive new revenue streams. Smart organisations will provide one – or both – of those benefits.

Right now Australia is in need of innovation like never before, as we cope with the impacts of climate change in the midst of an economic crisis. Those solutions will come from anywhere. But they are still going to require the strong management disciplines of which Vamos talks.

Because, if we are only achieving 60 percent of our potential, we haven’t got a lot to look forward to.

Brad Howarth is a journalist and author of ‘Innovation and the Emerging Markets: Where the Next Bulls Will Run’, a study on the challenges facing small Australian technology companies. You can read his blog at lagrangepoint.typepad.com.