Innovation ethos drives business growth

02:59, Jul 30 2013

"An informal term for equivocating words and phrases aimed at creating an impression that something specific and meaningful has been said, when in fact only a vague or ambiguous claim, or even a refutation has been communicated."- Wikipedia

"innovation" is rapidly becoming a business weasel word, a word dropped into formulaic sentences in management meetings and investor presentations alongside "going forward", "sustainable", "strategy" and many others.

Shaun Maloney challenges that belief, and even the dictionary definition of the term, saying innovation is not just about something new, it is an ethos in the company he leads, Christchurch-based geological visualisation software developer Aranz Geo.

Speaking at a GE Capital- sponsored briefing in Christchurch, Maloney said each individual in his company has to innovate from the moment they walk in the door about how they operate, the way they think about their role and how they perform. That kind of total innovation then works its way into the product.

But that means hiring and developing the right people - and, sometimes, getting rid of the wrong ones quickly.

For Bevan Broughton, in the very different business of providing commercial laundry services at Taranaki's La Nuova Apparelmaster, that means "never hiring on skills".


Broughton said he hires people who fit in with the culture of the company. However, if in time they no longer fit in "so be it".

"We hire for where we are going and hire people because they fit in and can be creative, and then we teach them skills."

Running what is effectively still a fast-growing start-up, Maloney has an advantage in ensuring he has the right people in the right positions.

Aranz Geo was launched three weeks before the September 2010 earthquake in Christchurch with around 20 staff and an aggressive three-year global growth plan which aimed to double revenues every year. That meant the company was always putting people on.

"We didn't have a lot we had to break, not a lot of bad habits of the past," Maloney said.

The trick was about ensuring such habits weren't developing as the company grew, and to ensure innovation wasn't just concentrated at the product end of the business. If people do the same job the same way year in and out, he said, they don't evolve and risk becoming irrelevant.

Instead, everyone is encouraged to make routine tasks easier and faster.

For La Nuova Apparelmaster, training looms large. In fact, the company invested heavily in training during the recession, much to the surprise of its bankers.

"We are ruthless," Broughton said. "If they don't fit into our culture, they are gone. If that costs some money, so be it."

Broughton has led the implementation of Lean, a business method, a descendant of the Japanese Kaizen system, that aims to eliminate spending on everything but the creation of value for customers. He has also embraced sustainable practices in the quest to become fully carbon- neutral, creating possibly the world's first carbon-neutral commercial laundry.

Broughton said Lean empowers employees and gives everyone the chance to be involved. The challenge with the model is that the staff aren't Japanese, so the model has had to be adapted to local conditions with the emphasis on simple tools such as covering the walls with whiteboards and flip charts to capture ideas and brainstorm.

Broughton said it is abhorrent to him that people can spend 30 or 40 years putting products into machines and never be asked their opinion.

Training is taken so seriously that the top team are charged with "making themselves redundant" by training people to do their jobs as well.

"It's about people, if you don't know how to hire or hire the right people to suit your business, it's pretty hard."

Maloney said Aranz Geo takes its time hiring, and loses some candidates as a result. Three interviews are the norm and psychological tests are applied.

"We let them know it will not be a short process."

One new staffer was recently hired after a four-month process plus a month of negotiations, he said.

"The gut-feel model doesn't cut it. We want to be far more scientific."

As with La Nuova, staff with potential are developed, sometimes through teaming them up with champions in the customer base.

"Long to hire, short to fire is the way to do it," Maloney said.

One of the commodities in shortest supply in the workplace is "good old common sense".

At Aranz Geo, making it up as you go along has been turned into an art form and a unique business methodology in its own right called "boxing it".

It started with the realisation that while what was being delivered to customers was unique and effective software, the initial experience of it, arriving on a dongle, was "underwhelming". After spending three months studying the customer and realising they were not IT people, but people who drank beer and broke rocks, the packaging was redeveloped into a box with a magnetic lid, a bit like an iPad box, that personified the brand and the value proposition.

The success of that led the company to think about boxing everything up, including its internal business processes. Doing this in customer service to support a massive customer such as Rio Tinto allowed the service side of the business to scale globally quickly as the company grew, Maloney said.

"We're still making it up as we go along, but we've turned it into a science," he said.

La Nuova Apparelmaster, meanwhile, has challenged the commercial laundry industry to change.

Realising that the cleaning chemicals being used weren't producing results any better than old-fashioned products such as corn starch and Sunlight soap, the company went back to the old ways and challenged its supplier to change.

Staff contributed their knowledge to that project, Broughton said. Now the suppliers, "after bagging us for two years", have changed their thinking and begun supplying products that meet the company's needs.

Sunday Star Times