Workplace culture essential to innovation and business growth

18th March 2015

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Nearly 70 per cent of small and medium-sized enterprises (SMEs) in Australia are not meeting their full potential when it come to growth due to their workplace culture, says a new report from Microsoft.

The Culturing Success report released this month reveals that poor workplace culture is making it difficult for innovation and fresh ideas to bloom in many SMEs. As part of Microsoft's Joined-Up Innovation initiative, this report aims to help SMEs innovate by providing practical advice on how to increase the growth potential of their business.

As more and more companies move online and become increasingly involved in e-commerce, the need to stay ahead of the game through innovation is now essential to the survival of any business.

"Our research reveals that many businesses find it difficult to develop a culture of innovation because of barriers including working in silos, fear of failure, employee distrust and poor collaboration," said Pip Marlow, managing director of Microsoft Australia. "Innovation is vital to the success of any business, no matter how big or small."

Collaborating with Michael Henderson, a world-renowned corporate anthropologist, Microsoft surveyed more than 500 SMEs in Australia and found that only 33 per cent were innovation 'Leaders' or businesses capable of responding to market change and opportunities.

The rest were divided into either 'Cruisers' (43 per cent) - that is, businesses with some interest in innovation but who were under performing. Or they were 'Laggards' (24 per cent) - businesses that showed no interest in innovation as a means to grow themselves.

The same research found that of those SMEs defined as Leaders, 39 per cent reported revenue as growing faster than the industry average. The common cultural traits of Leaders were a high level of focus on customers, a desire to innovate, a supportive working environment, quality leaders, employee engagement and authentic internal dialogues about innovation.

Microsoft has also launched a new online tool designed to help SMEs measure their innovation and receive a report containing practical tips on increasing their innovation potential.