The Press, September 2004

Innovative ways to take on the world

Hamish Carter should not have won triathlon gold at Athens. He wasn't the most naturally talented athlete, he was one of the oldest competitors in the race and he was not ranked number one in the world. But he mitigated against those factors with intensive preparation, great race tactics and a superior mental attitude. I think we as business people, could learn lessons from Carter's triumph.

We certainly have plenty of talent in New Zealand business. "There is no shortage of world-class, compelling innovation in New Zealand" concluded last year's Government taskforce into Information and Communications Technology (ICT). It set the ambitious but exciting goal of 100 ICT companies turning over more than $100 million per year by 2012, increasing the sector's share of GDP from 4.3% to 10%.

Is this goal achievable?

Another recent government study, by the Growth and Innovation Board (GAIB), showed that we identified strongly with innovation, saw being in business as cool and a great vehicle to be successful, but we are quite ambivalent when it comes to big business. The study concluded that we "need a distinctly Kiwi vision of growth which is meaningful to New Zealanders in the context of their daily lives and the values they clearly prize."

Our egalitarian heritage means that the Kiwi vision of growth won't be about creating huge personal wealth, but about being very successful with a clever idea. Jade's Sir Gil Simpson is a good example of this kind of person. He made his fortune at a young age, but has remained actively dedicated to his vision of making computers easier to programme. Peter Jackson could have retired a rich man after Lord of the Rings, but he is still devoted to using innovation to bring our beloved stories to life.

There don't seem to be enough of these characters in New Zealand to realise the ambitious goal of the ICT Taskforce. Around 97% of New Zealand's 294,000 companies employ under 20 staff, the majority of those fewer than five. Only 4% of firms export, and 80% of our total exports are in the hands of just 1.5% of local companies.

Why is this? It is certainly not a lack of brains or effort. The problem is that we tend to rely too much on our natural ability as innovators, which is not enough to triumph on the world stage.

A great idea can get a business only so far. Many Kiwi innovators build their success on attracting the early adopters that tend to drive the initial growth phase of a technology business. These customers are the ones interested in the features of a product, those that actually come looking for innovation. To reach the next level, the sustainably profitable part of the market, companies need to be able to find and connect with those mainstream customers that are only interested in benefits, not features. The quality of the product alone no longer suffices. As the ICT report puts it, "... having the necessary commercialisation experience and skills to go global".

If more New Zealand innovators are to make it on the world stage a crucial part of that 'experience and skill' is in building a strong marketing foundation. This means a comprehensive understanding of factors like the need of the target market, the commercial realities of the market, the key success factors in the market, and the strengths and weaknesses of the key players. No matter how clever your innovation, a good market understanding is far more powerful than a list of product features when you are standing in the boardroom of a big US customer.

Effective marketing is about applying the same discipline and intellectual rigour to marketing as innovators apply to their engineering problems. Building a sound marketing platform provides the environment, understanding and commercial focus for a technical entrepreneur to grow their business. The significant increase in market understanding and the knowledge of how to approach a market lowers risk and helps diminish the fear of the unknown.

To become the kind of exporters of innovation we want to be, Kiwi business people have to learn from the successes of sportspeople like Hamish Carter. A business' natural talent, that clever idea, can only get them so far. It's building on that with the tools of a marketing foundation that will help bring gold.

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