Why innovation requires a mix of skillsets

Innovation is today’s most used – and least understood – word. Politicians brandish it like a magic wand. But the spell could be broken with a new report challenging the current obsession with STEM.

The Skills and Capabilities for Australian Enterprise Innovation report, produced by the Australian Council of Learned Academies (ACOLA) and released in July, 2016, shines a new light on the innovation debate. It suggests the lack of appropriate skills mixing in and across our enterprises is the biggest barrier to innovation, not the shortage of STEM skills.

STEM and the Innovation Debate

We’ve heard countless times that declining numbers of STEM (science, technology, engineering and mathematics) graduates are undermining Australia’s potential innovation success. The sense is that unless you have a technical education, your other skills are as useful for driving innovation as snake mittens.

Australia is not heading in this policy direction alone. The US and several European countries are falling behind in terms of innovation metrics (see Global Innovation Index) and calls to, for example, teach coding in school are getting louder (see US Department of Education).

However, this focus on STEM seems like a peculiar remedy to our innovative blockage. Research by Andrew Norton from the Grattan Institute shows the full-time employment rate for recent STEM graduates is actually decreasing. If our organisations are desperately lacking STEM skills for innovation, how come graduates can’t find jobs?

The Research

So, to give the problem a more thorough squeeze, the ACOLA research team, including myself and Professor Peter Gahan, Director of the Centre for Workplace Leadership at the University of Melbourne, identified some of Australia’s most innovative organisations through a peer-review process and interviewed 19 senior executives for their take on the skills required for innovation.

These included some of the more obvious poster children such as Cochlear (hearing aids), Animal Logic (animation), SEEK (business services) or SocietyOne (peer-to-peer lending), but we also talked to more unassuming cases including Cotton Australia (a peak body for the cotton industry), Laing O’Rourke (construction), Queensland Urban Utilities (water provider), Keech (heavy manufacturing) and Pernod Ricard (wine and spirits).

What did we find?

The interviews showed that innovation is a mindset that relies predominantly on how organisations manage and use the skills that are available. Specifically, we learned the way skills are mixed in individuals, in teams and across organisations is important for innovation. We found:

1) Skills mixing in individuals

Although some executives spend considerable time and resources finding and recruiting the ’right‘ employees, they also realise it is on them to attract the best talent and to make innovation happen. The right employees tend to be those that bring a broad mix of skills and experiences to the table – think deep knowledge in one field and broad understanding across other areas, especially for (future) leaders.

Much of the responsibility falls to education institutions. We need to provide courses and degrees that cut across disciplinary silos and better prepare students for the real world. Work Integrated Learning is still too sparsely implemented. But it is also up to the individual to ‘do things beyond their core discipline’. Communication, collaboration, critical thinking, application – these are the skills innovative organisations are looking for.

Innovative organisations also actively build the skills they need. For instance, Pernod Ricard runs week-long creativity trainings that bring together sales and marketing, viticulture, production, finance and HR. The training teaches them to ask the right questions and provides tools for visioning, clarification, ideation, development through to implementation.

2) Team level skills mixing

If you think cross-functional innovation teams are so 10 years ago – you’re right (De Luca and Atuahene-Gima 2007). But like a pair of Jordan XIs (originally released in 1995) they have a timelessness to them that makes them as fresh now as they were back in the day.

Innovative organisations understand innovation needs different skills at different stages of the product development cycle. Broad knowledge and market understanding to develop ideas, deep technical knowledge to prototype, consumer, societal and cultural understanding to market and sell. Diversity – of gender, ethnic background, but also skills and disciplines – is vital.

For example, Laing O’Rourke is operating an Engineering Excellence Group that includes people with degrees from engineering through to medicine and music. Renowned Australian innovator, Cochlear is using a sophisticated skills forecasting system to plan their future recruitment around market trends.

3) Collaboration to access across organisational boundaries

The biggest theme for our interviewees was the ability to access skills as they are needed through collaboration with other organisations.

Whether this is start-ups finding mentorship and advice through networking organisations like Carlton Connect, SMEs like Keech3D running joint research projects with universities or CSIRO, or multinationals like ING Direct running skills exchange programs across their global partners, the key is that collaborations bring together people from different fields, with different experiences and different ways of thinking. It is at this intersection of fields where most innovation and new thinking develops.

So what happens now?

The report’s findings are a call for action across the innovation system. It prompts education institutions to provide more cross-disciplinary courses and research, urges industry to put innovation on the agenda and actively develop talent and teams that can deal with complex, multidisciplinary challenges, and it encourages government policy to provide incentives and structures that foster collaboration and skills mixing across all levels.

And if you’re Inspired to get some Jordans? Go hunting on eBay, like the rest of us.

Find the full report and executive summary on ACOLA’s website.

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