How can a business law firm help small businesses innovate?
Consistent with the findings of major global studies, research into how Australian business leaders have survived the global pandemic suggests innovation is the key to small business resilience.
How did small businesses innovate through the pandemic?
A survey of more than 3,000 business and IT executives across the Asia-Pacific has found that 45% of Australian businesses believe that the pandemic gave them an opportunity to innovate.
The Microsoft-International Data Corporation study reported that 69% of Australian organisations are currently undergoing some form of digital change to future-proof their business activities. According to the report, the most common areas for transformation were digitising the supply chain, creating digital payment processes, adding digital products and services, and finding ways to automate existing business functions.
Out with the old business model, in with the new
In Europe, McKinsey surveyed 300 CEOs to understand why some companies fared better in response to the pandemic than others. Almost half the senior executives admitted that the global crisis revealed weak points in their business model, leaving them vulnerable to competition. Significantly, 75% reported that their most successful initiative was to change their business model along one or more of the following lines:
- Migrating physical products and services to digital ones, to meet the needs of consumers and clients suddenly based at home
- Joint ventures, in which complementary service providers team up for a new service – seen most frequently in partnerships between technology and healthcare vendors
- Supply chain adjustments, to limit inventory while managing reliable distribution
- Introducing new sales methods, most visibly in contactless delivery and QR menu codes for ordering meals
Mindset: the key starting point for SME business model innovation
At a recent webinar for the Australian Institute of Company Directors, BDO Australia’s Head of Strategic Innovation, Tanya Titman, said:
“It’s not about spending a lot of money. It’s actually about shifting mindsets and empowering your people to think differently. You have the ability to try different things and see what works and actually evolve your business model into the future.”
Start with a plan
Nicholas Martin, Partner, Advisory at BDO Australia recommends developing a plan for rebuilding your business that’s done with some tough conversations at the board or executive level.
To do that, Martin says, first identify what worked during the crisis. “Then we need to identify what are the four or five things that we need to embed within the organisation and how we do that? And importantly, how should we measure it?”
A list of key considerations for small businesses considering changing their business model is available on the AICD website.
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