In this special episode, I had the privilege of talking with David Thodey AO, whose experiences and roles have included board and chair roles in organisations such as Xero, CSIRO, Ramsay Health Care, Telstra, and Chancellor Elect at the University of Sydney. David is also a figurehead and thought leader within AICD, particularly around innovation and the role that it can play in Australian business and society.
In our conversation, David shares some of his journey into innovation, having started at IBM, and he shares his passion and ongoing fascination with how science and technology can shape society and business for good. We reflect on the importance of communication in technology transfer, both in terms of inspiring the public and private sectors, but also in articulating the problems that it can address, and the opportunities that can arise through the embracing of innovation and well-managed risk.
We touch on some of the broad enablers for business, such as finance and process, however, culture becomes the dominant theme through our discussion, and the challenge of disrupting the status quo alongside the need for competitive energy, both within organisations and in the markets that they serve. We then touch on the recent Australian tour by Marianna Mazzucato, and the notion of grand challenges for Australia to set and rise to. through better deployment of innovation and technology into the local ecosystem. David notes the need for defining organisational aspirations, purpose and through that, setting the culture for an organisation.
Some time was spent reflecting on Australian business outlooks, including a recent PwC survey which suggests that 85% of Australian CEOs believe their business would still be economically viable a decade from now, if it remained on its current path without major changes. This catalyses some discussion around the current malaise in private sector investment in innovation, competition, and the arising risk appetite from corporate Australia. David notes that every board should be looking for means to prosperity, and that innovation reflects the desire to improve. We reflect on how there are great sectoral examples of innovation, where organisations compete on the global stage for talent, resources and commercial success.
We also explore some of the cultural conundrums inherent in innovation, related to people (who ultimately are driving innovation), and the corporate governance settings around reporting, control, trust, and accountability. There is an equilibrium between these and also between the board and management that needs to be thoughtfully calibrated. We also reflect on local attitudes to risk management and the challenges associated with recognising and managing well-intended but erroneous outcomes arising from the pursuit of innovation. Accountability and consequence need to be built into a system that results in (failing and) learning fast, not failing fast (and not learning).
Transcript
CB: Hello everyone, and welcome to Tech Transfer Talk. My name is Cameron Begley, Managing Director of Spiegare. And joining me today, we have the very great privilege of talking with David Thodey. David would be very well known to our Australian audience, and I also anticipate some of those around the world. David, in his current role, is across the innovation system and chair of a number of private sector companies, and we welcome him to talk about tech transfer and innovation in Australia. David, hello.
DT: Hello, Cameron. And thank you for having me on. I’m looking forward to the conversation and being with you and talking about my favorite subject.
CB: Fantastic, David. And it is great to have you. And we spent a bit of time talking around the National Innovation Policy Forum in Australia late last year, in 2023. I’m interested, though, a little bit, in what got you into innovation and tech transfer. What was the journey that, that got you into this, uh, crazy environment?
DT: Mm. That’s an interesting question. I’ve never really quite thought about it. I started my career, I did a degree in, anthropology and English after wanting to get into medicine, but I did a bit of a left turn, and then I ended up joining IBM, and IBM, this is back in the late 70s, early 80s, was an incredibly innovative company. I mean, it, and I can still remember, I started as an engineer, a systems engineer, so software engineer, and I remember being incredibly enthralled and excited about the scientific breakthroughs that was enabling this computational world that was changing business. But it wasn’t just changing business, you saw the impact on society. And, of course, that’s just played out over a number of different decades. And so, I think this, and a lot of that is around core fundamental science, pure science, what I mean, so, when you look at how microprocessors are created, silicon, etc., all the way through to the incredible innovation and creation of operating systems. And then, we end up with things with mobile phones that are bigger than the computers I used to work on. So, that’s what got me going. And then, I’ve seen it applied in business. And that’s really what I had great satisfaction from, because I saw a sort of business and technology being used in business to change the way they ran their business, the re-engineering and the incredible satisfaction from that. And then that went into CSIRO and then, and then also my involvement in academia and, and research. So that’s sort of the, the genesis of it. And, kept at it really.
CB: That’s a terrific journey. And IBM, of course, was an arguably, still is, a giant in IT and IT services. But I must admit, I’m very curious, David, from anthropology to software engineer in a single bound. That’s perhaps not a progression that one would normally take in a modern context. How did that play out for you?
DT: Well, there is a bit of a back story here, Cameron. I know it’s not a well-worn path that, that went from anthropology and medieval English to here. Look, I was a maths, physics major through school. And it was really when I went to university. And I just wanted a broader education and actually, as I say that I think about the US system of undergrad, broad undergrad degrees and then more specialisation. I think, I personally got a lot out of that because then I had an undergrad degree, was doing some post-grad work, and then IBM in those days, somehow, I must have fluked the IQ test, and they put me through a whole lot of training. And I went back to my maths, analytical roots. But I do think that getting a broad-based degree and then moving into specialisation just really sets you up in the broader context of life and career. And I worry sometimes that we, we want our children or people coming out of school to specialise one way, look if they know what they want to do, great, let them go for it. But it’s okay to go and look at Chaucer and Milton and look at the cultural change. I mean, that’s good because that makes you a more rounded person.
CB: Yeah. And indeed, I think that broader experience is a very useful context or concept in the world of tech transfer and innovation.
DT: It is.
CB: Very often, we come across, in my experience, we come across people who can’t broach across disciplines or even world views. So, we see in industry and researchers talking past each other rather than with each other.
DT: Communication is critical. Communication skills and being able to articulate… the meaning of what you’re doing and be able to inspire others around you with whatever that bit of research, the impact of that research. I’m not saying that everybody has to impact research. It can be pure research. But even in pure research, be it at an atomic level, molecular level, whatever it is. It’s exciting because you’re discovering the world. You’re discovering the world around us, and all the great, the great innovators I know, somehow have this ability. It’s not sort of a charisma; it’s just they are so inspiring about what they’ve discovered and what they’re engaged in and their ability to articulate. You get taken away with it. And I think that is a critical skill. And I think we need to train our great researchers in that. And there are a few programs around. But just being a great researcher is not enough. It’s not…
CB: No, it’s a necessary but insufficient condition.
DT: Yes, exactly.
CB: One might argue. And I suspect, David, in your role at CSIRO as chair, you got exposed to the passion of scientists on a regular basis and had to deal with the eternal conflict of somewhere having to say ‘no’.
DT: Correct. That’s right. And look, I, I, am, was, still are, inspired by all of them, because they are, the areas they work in, both in universities and the CSIRO. But there is also a commerciality or a prioritisation you have to go through. And sometimes things just you don’t get to the top of the list. And that’s just the way it is. And so sometimes you do have to say ‘no’. So, because prioritisation of focus is still critical skills, we all need. But yeah, but gee, there’s always so much Cameron. You know, there’s just so much within what we can, fund and get done.
CB: There is no doubt that at times it feels like you’re drinking from a firehose with the opportunities that could be funded, and arguably, should be funded.
DT: Right.
CB: But as you say, David, in any system, I think it’s fair to say there’s a finite amount of resource.
DT: Yeah, there is. And that is I mean, even if you’re in research, there’s only so much you can do. And, and that skill of being able to prioritise and, and really determining what is the most important is really, is a critical skill. Look, I mean, there is a bigger story here around. Are we funding enough R&D in Australia? And look, all the, all the numbers, as you and I know, have been going down. We’re down now at about 1.68% of GDP, which is the lowest we’ve ever been or getting close to it. And there’s some countries at 3.5%. I mean, it’s a tragedy, I think. Though interestingly, the big decline has been out of the private sector, have been the biggest decline. But we need to get that back and we need to keep funding at the public level.
CB: And David, that, thank you for setting up my segue, that was really lovely of you, because that is the very thing I wanted to explore with you as we talk today, around how the boardroom sees innovation and technology transfer, because I think you quite rightly have identified the private sector, maybe a bit bluntly, not carrying their weight when it comes to the investment in R&D in Australia. And is that, there are multiple layers to this, is to explore it from a board perspective in the first instance, perhaps a cultural perspective, if we can get to that. In the boardroom. David, what are your observations and experiences around views of innovation? Is it seen as a risk that disrupts? Is it an opportunity that’s consciously passed?
DT: How does that actually play out in the discussion? Well, look, I just want to preface my comments. I actually am not 100% convinced that we’re measuring the right thing when we talk about R&D expenditure and the private sector going down. Put that aside for now, because I don’t know, because I think we can be doing more. Look, every board that I’ve ever been involved in, and I think that’d be true for the majority of boards, are looking for ways for that organisation to prosper, to be successful, to be a good environment and to give a return to, the many stakeholders that they represent. I think that innovation isn’t always used as the word, but they look, if you categorise innovation as this desire for improvement. Because innovation can come from many different places from process improvement and come from product innovation, it can come from innovative policy, for example, great ways of thinking. So, I think that there is an inherent recognition of that, which is not quite the same as R&D. Okay, that’s, because R&D is when you’re investing money in researching out something. So, there’s just a slight difference there. Now do we do it enough? Because what I’ve found with really innovative companies is that there is this continual desire. You know, that is a driver for improvement, for finding things that have not been discovered. And it doesn’t come, in a tempest, but it comes from continual, hard, disciplined, rigorous work. And what I worry about a little bit, is that innovation gets put into that category, ‘Ah, well, a brilliant idea’. And suddenly we change the world. It’s not like that at all. No, actually rigorous, hard discipline. You know, we talk about fear of failure, but it’s about failure, doing it again. What is experimentation? Experimentation is about doing something the same time a hundred times, and you get the same outcome. That’s what you are, hopefully, or discovering something new. So, I think that what, what boards need to do more of, is to create that environment in their organisation. that creates the room for this continual improvement, this innovation. And I do think that there’s a number of different elements that maybe we could explore. There’s a cultural element to that, about behaviours. There’s a capital allocation consideration of that, but also, it’s the processes that you put inside the organisation to make it happen as well. So that’s where I, I think we can do a better job in the private sector. And, and I think the great companies, look at the miners. See, I mean, often we, the miners are incredibly innovative and are incredibly, both from the research side in terms of prospecting and how they’re doing that. I mean, I don’t know if you’ve seen, but in that, the days, today you do a drill down of a core, they’re doing real time analysis of the core as it comes out of the ground and they’re reporting back, and they’re doing the triangulation of what they’ve done- real time. Real time. I mean that is just radically absolutely great.
CB: Yeah. I agree.
DT: Yeah. And so sometimes we, we are not recognising things that we are doing are truly world class. And so, so yeah, so, I think there’s all those different elements. But no, I mean, the bottom line to your question is, I think boards do care, but I, I think we can do a better job. And, and then how you work with management to make that come alive. But it’s, it’s a multitude of things you’ve got to do.
CB: I think mining did a terrific example, David, of outstanding innovation, and innovation in their operations, and their health and safety, and a whole lot of other dimensions. And I think, what I’d like to put to you as a bit of a thesis here, is that the reason, or one of the reasons mining is so innovative is because it is in a global competition in the markets that they service, whether it’s iron ore, whether it’s, emerging critical minerals, whether it’s copper, they are in a globally competitive industry. And in order to survive in competitive industries, one must be innovative.
DT: Yeah. Look, the competition is good. I just do not understand people who do not think global competition is good. It is what drives value creation.
CB: Absolutely. And hence, what I’d like to sort of propose here, David, is the lack of competition in a number of Australian sectors, may, in fact, be making investment innovation unnecessary, unattractive, because there’s not the competitive forces at play.
DT: Yeah. Well, I think there’s a lot of truth in what you say. And unfortunately, it comes back to human nature, you know? All of us, we gravitate to the place of least resistance, and if you’re not being forced to change you go to that steady state. So, and, I mean, that’s why I still refer to Andy Grove and being paranoid. The great companies never stand still. They create that sort of energy and drive to never censor. Now, I don’t know if we all need to be paranoid, but it’s this constant drive to change. And if you don’t, inevitably something comes and hits you, and you’re in a world of pain. So, competition is good, and we must never protect markets. We need to have them open, and we need to be on the global stage, and then driving change. I think now, yes, there’s people implications. We need to manage that through. But you don’t, you don’t shut your eyes to competition, and then you work through the issues together. That’s what makes great economies and great companies.
CB: In fierce agreement, David. And I think that idea of constantly moving, not shutting the right to competition. These are particularly interesting and pertinent. I had drawn to my attention a few weeks ago, the results that came out of the PwC global survey of chief executives. Not sure if you’re familiar with it, but allow me to give you and the listeners, two things that struck me about it. And I’m sure there are many other things. If, as I read further. Apparently, 53% of CEOs globally said they would need to innovate for their companies to remain economically viable within the next ten years. So, that’s pretty consistent with what you’ve just described, David. 85% of Australian CEOs believe their business would be economically viable if it remained on its current path without major change.
DT: Gee, that’s a concern.
CB: That’s yeah, I think I know I’ll put you a bit on the spot there, David.
DT: No, no, no.
CB: But it is rather striking isn’t it.
DT: And Cameron, quite honestly, I wonder how they can say that. I mean, because I don’t know any industry at the moment, and I, and we could maybe talk about it. that isn’t going to be radically changed by the next round of technologies. You know, at the moment it’s AI and, but the impact there is enormous, absolutely enormous.
CB: I mean, yeah, and absolutely, David, and AI is one that we only want to go to. I’m, I’m more on energy engineering guy, I think of electrification.
DT: Yeah. Exactly. Exactly.
CB: And the profound change that’s going to have around the world, not just Australia. It really struck me that, that conclusion coming out of that, and it took my mind immediately to the question of culture. And you raised a little bit earlier.
DT: Yeah. Yeah.
CB: The cultural settings in Australia and innovation and whether it’s a fear of failure or the cultural tendency to blame…
DT: Yeah.
CB: Uh, I don’t know. But I’d like to explore that idea of where are we with the cultural settings?
DT: Look. This is a wonderful country that we have … Are you aware of in longevity, we’re the third in the world in terms of longevity. You know, our health system is great. Our economy, except through Covid, has had this incredible 28, 29, 30 years of growth. Our standard of living – not perfect, but pretty good. The housing prices are high. Look, I think it gets a little bit back to, there’s some cultural elements, but also. yeah, life’s pretty good in Australia and we need to be challenged to not just rest on our laurels. We need to keep changing. And I look, I do think there is a, with that, you blame somebody else as you’re referring to or, I don’t step out too much in terms of I fail, but the underlying is a malaise, and a lack of competitive energy and desire to excel. And you go to a developing country or where people are, really, I mean, that they have, it’s for survival, that they’re out there doing stuff and we, we, look, I love it, I’m very grateful to live here, and I never want it to change. But if we can add to what we’ve got, this sort of aspiration and our drive and change and, and celebration of people doing great things and recognising them, as much as I love sport more, as much as we do our sports people, then we might just do better. I mean, I love sport, yeah, I love AFL, but I don’t, I’d like to know our entrepreneurs as well as I know many of our sports people. But we…
CB: Yeah. Yeah. Indeed. And interestingly, David, you raise that issue of celebration and right, raising our successful innovators or businesspeople or entrepreneurs, or dare I say, anyone that’s not an elite athlete. It’s interesting. I had someone say to me recently, that Australia suffers actually from two problems; one being the fear of failure for the reasons we just sort of touched on. Interestingly, they then went on to say we also suffer from the fear of success.
DT: Yeah, we do. Yeah, yeah. Tall poppy syndrome.
CB: The Tall poppy syndrome. Yeah. And it’s an awfully difficult needle to thread when you have to be just successful enough not to fail, but not too successful that your head doesn’t get chopped off.
DT: Yeah. No. Look, I think that is true. However, let me put a slightly different hypothesis to you.
CB: Oh, please. Yeah. Terrific.
DT: Okay, so I get, I get these, fear of failure. There’s a blame culture. You know, tall poppy syndrome. And look, I could keep a lack of collaboration, not a very diverse economy. However, my experience in working with complex organisations is that, if -you can recognise all those challenges, but if you are able to define an aspiration that everybody can buy into, in terms of your meaning, your, I’ll use the word purpose, but I don’t want to get too carried away with that. That’s like to a greater aspiration about your place in the world, it’s amazing how all these things drop away. There was some work done about eight years ago, about what do we as Australia want to stand for? What is that? Yes, we’re great. we’ve got great resources. Yes, we’re great miners. Yes, we’ve great agriculture. But what could we really be known for in the world? And look, this might be completely wrong, but he said, it was Bill Ferris who used to be at champ. I don’t know if you knew Bill, but he said, ‘What we should aspire to be is the healthiest country in the world.’ You say, ‘Why do you say that, Bill?’ And he said, ‘Well, we have one of the best climates, despite climate change, in the world, we have some of the best research, researchers in medicine. We have an incredible ability to apply great medical outcomes. Our wellbeing is very strong. And we could build a wonderful, be known as a, the health of the country, the world. But it creates this value that everybody could relate to and aspire to.’ Now, it may not be that, but you see, the principle is of, rather than worrying about all the things that we don’t do, although we do, if we combine ourselves to find a sort of unifying thematic for the country, I think it might sort of address some of these problems. But anyway, that’s a hypothesis.
CB: Well, David, I sense a Mazzucution theme coming through.
DT: Yes, yes.
CB: And I think what you’ve just described there is, is a very laudable mission that Australia could get behind.
DT: Well, look, I, I think it I think, Mazzucato has found something here, in terms of big, gnarly problems or that you turn them into opportunities, and you unleash the creative power and energy and intellect of the community. I do think it is. Now, I know the only thing, I’m not sure it’s enough because you’ve got to do other things as well, but I tell you, it does address a lot of the problems because, otherwise we go down deep dark holes. So, I think it is something bigger here that we really need to continue to explore. And I think we could find some things that really brought us together. And we take a big bet at, there’s risk with it, may not work, but it could unify us in a way that we, uh, we sometimes lack.
CB: The idea of a bold goal or a vision like that, unifying us, I think, is in fact something that would not only bring society and the domestic narrative along, it could also guide the innovation system.
DT: Oh, absolutely.
CB: As to where it should orientate its activities. Because it’s, I think, Cathy Foley at the Innovation Policy Forum, used the term ‘Vegemiting’. She just described…Vegemiting is spreading everything evenly and very thinly across the surface area. Whereas if we had that, shared mission, whether it’s the healthiest country, whether it’s net zero, whatever it happens to be, that might actually allow us to only perhaps use the Vegemite on half the surface area and maybe put it on twice as thickly.
DT: Yeah. Yeah. Well, I think she’s on to a point, and, it’s, when you don’t know where to go, you sort of you spread it pretty thinly, don’t you? You try every option. And I do think that, we have had industry policy, but we know that common term, governments don’t want to pick winners because they’re often wrong. And yet, by default, we end up picking winners by, by default or by when you had subsidised industries, which we’ve done for decades, and yes, I understand that short-termism in terms of jobs and sometimes you need to prop up communities. Of course, you’ve got to do that, that’s what governments do. But there’s this bigger thing around, of finding those things that we are great at doing and really celebrating. And of course, for us, it should be, we should be the best resources-based country in the world. You know, we just, we start this concept. We should be, we got enormous capability and resources and capability and, but that’s not enough. We have to do these other things as well. So yeah. I really agree with you. I think there’s a really big, I think that comes back to leadership though, Cameron.
CB: Yes, it does. And leadership’s is a really interesting piece of the puzzle, David. And I think that’s not just a private sector conversation that, that’s very much in public life as much as private life, I think. Or private sector. The ability to hold a vision over a sustained period. I think we’ve lost that ability perhaps in the last 10 to 15 years in, in Australia. I, I never sensed that was an issue. Maybe I just wasn’t paying enough attention.
DT: No, no, I think…
CB: I didn’t sense that was an issue. leading up to about, sort of the mid-2000s.
DT: No, no, I think that, I think that is a fair observation and it’s just sort of become that wishy washy, it’s just not, it’s lacking the clarity. I mean, maybe even Paul Keating, when he talked about the Asia century, I mean, you, I mean, it was a rallying cry about where future markets were going to be, where our orientation had to grow and, and still true today, because we haven’t gotten out of that century. But it’s sort of there was sort of this forward thinking, where do we need to be? How do we play? What do we do now? There’s always the challenge. And look, I can criticise why being the healthiest country in the world isn’t the right one or, being the resources sector Asia isn’t the right thing, but you can find criticism all the time. But we got to find these things that bring people together. And then I think we will find innovation. So come back to the business environment. I mean, I think the great companies that I know, do have that single big aspiration, and then they’re able to reinvent and change themselves as markets, conditions change because they’re so driven by that achievement that they, they continually are resetting where they are, what capability they’ve got, where they’re allocating capital, what, what sort of capability they’ve got in their people. And, I think it becomes this driving point. And then, they start adopting technology that allow them to get there or do it differently. So that’s what I think really good boards do. They create that sense of purpose and environment for success because they can’t do it, and they can’t. They don’t have all the answers, but they can create this this energy and drive and velocity, in a company and you know it, when you, you go into a company that’s got real momentum, you feel it, you feel it.
CB: And what I feel you’ve just described there, David, is the board setting a purpose and a culture.
DT: Yeah, very much so.
CB: And you made the, the, the next quick observation there, that they actually don’t do that, that that’s not their job is not to implement it. Their job is to set the purpose and the cultural tone. So, it does, so, what prompt, prompts me is, is the implementation piece. It’s a really interesting part of the equation, the critical part of the equation.
DT: Absolutely critical. Well look implementation, execution, is absolutely critical. I mean, I think in, in a slightly different framing than what we’re talking about, but it’s sort of like the difference between strategy and execution. You know, I’ve seen so many wonderful strategies, as we all have. it’s probably 20% of the work, 80% is actually in the implementation of the work and doing it. And that’s not to say that the strategy bit isn’t important, but I do worry that we underplay the criticality of great execution. And when you get to great execution, that is about being able to translate ideas into actual reality and driving outcomes. And that is a lot often about clarity. It’s about metrics. It’s about process excellence. All the things that we have all learned through Deming and quality circles and about how you drive to that information of change. And the review process allows you to course correct, course correct, course correct, and then doing it over a long period of time. It’s not, it’s not the next year, two years, three. It’s sort of five years. And I think it is really important. And we don’t often celebrate or those sort of great leaders who are truly great executors. And yeah, Jeff Bezos at Amazon. Great vision. You know, first of all, Amazon was books and all that. But actually, what’s he become known for? It was the systems sitting behind there, managing the warehouse. The excellence and the processes that took a long time, that became the beginning of cloud computing. I mean, yeah, but it was rigour and discipline.
CB: Yeah, absolutely. David. And we’ve heard a number of times in our conversations that focus on rigour and discipline and excellence, persistence and all of those things ring true in tech transfer. But you made an interesting fleeting reference to time horizons. And you spoke about 1 or 2 years. And I wanted to ask the question of you, are we impatient as a community around how quickly innovation is meant to deliver?
DT: Mmm, undoubtedly, we, these are decadal-plus, and, I mean, at a national level, you’ve got to set this long-term aspiration. The worst thing in business or in an economy is, is too much change? And that’s why, when you get regulatory change, regulatory change happens, but if you’ve got regulatory change and creates uncertainty and you can’t invest and you can’t go up. So, you need this consistency to drive innovation and, and be it an organisation or nationally. So yeah. Look I. No, I’m not going to. I mean, as a listed company. Look. You are, that’s what CEOs and great leaders do. They used to go to deliver every six months. But you got to be investing for the future. You’re always balancing a bit of the short-term versus the long-term. So, I’m not going to try to, and shareholders or other stakeholders deserve that, but there are certain things that you need to take long-term bets on and go the journey. And, and I do think we’re too impatient on it because you’ve got to you’ve got to be really, you’ve got to see it through. Got to. Well, you’ve also got to be able to say ‘no’ when it’s not working as well, but generally see through.
CB: I think, David, the ability to say ‘no’ is a bit of a challenge generally, for us, where it’s easier not to say ‘no’ just in case we miss out or we’re not quite reading it right so, I’ll just I’ll just let it zombie on for a little bit longer. And it zombies and zombies…
DT: But I, I find it really hard to say ‘no’. I mean, I get excited by the opportunity, I think we’ll just give it one more go. But, that discipline of being clear about the assumptions when you make a decision. Being clear about the metrics you’re setting and then being incredibly, disciplined and rigorous and objective about whether you’re achieving it. And then, really discerning and critical of yourself about, is this timing? Have we really not got it/, It’s… you need people around you who help you do that, Cameron, who call you to account. All our instincts are with, ‘I’ll get this. I can do it’.
CB: Yeah, it is the necessity to have other people around you, in that, combination of the desire to keep it going and yet to have the rigour to, and the discipline to actually stop and take stock and actually say, ‘You know, as much as I want to, I don’t think you should.’
DT: Exactly, I totally agree.
CB: Perhaps, and certainly I’ve come across this with research programs I’ve been involved with commercially, which is, we should, but we need to change direction; we need to reallocate resources and redirect so that we can go in a different direction and solve a particular problem.
DT: No, no. Well, that’s right. I mean, that’s so true. And we all know about pivoting but there are times when you just, it isn’t right…there’s so many factors in creating a successful new venture. I mean, there’s so many factors. And you have to get right. And, just can be one or two, the timing’s not right. The market’s not ready, whatever it is. And you’ve just got to keep looking at them and making that call. Then there is the other aspect that plays into here, is about risk and I mean, all of us, whether it’s in tech transfer, you make, you do all your research, you do everything, to say ‘Is this, is this an inflection point? Is it the right technology; Is it the right partner?’ And then, sometimes you’ve got to make a call, and you make a call, and then you’ve got to back yourself for a period, and make and see how, make it work. I always remember there was a book in, which was not, I don’t think many people that were read, and I can’t remember who the author was, but it was sort of, uh, how did it go? It was called The Irrational Leader. And it was sort of-
CB: I’ve heard of that book.
DT: Yeah. And it was just this whole thing around. sometimes leadership is, does have this thing they push through against all the odds, and they make it happen. I mean, and then you’ve got to balance that with what we were talking about before. But sometimes you just got to, because sometimes people see it and they go for it, and that’s good too. I don’t know how successful they are.
CB: But it is fair to say, that bringing new technology and innovation to market could be seen as a bit of a faith-based business at times.
DT: I think that’s probably right.
CB: And the challenge, of course, there, when using such an analogy, David, is that that fight sometimes becomes evangelical.
DT: Aha, there you go…
CB: And gets away from us all.
DT: Yeah. That’s right, that’s right.
CB: And we don’t need to go through the history of those. But they are around us and among us. And there are some coming now that are about to have their bubbles burst. And there are other burst bubbles that are now regathering themselves. But it is interesting that the, I think, some form of belief or instinct is always part of this equation. But the disciplines, I think the majority, the overwhelming majority, arguably of the decision making. And I think the other thing that might be missing a little bit of times, David, at least on my observations locally, is we get a little bit muddled up between the concepts of risk management and risk avoidance.
DT; Mhm. Yeah, I think that’s true. I think it’s true.
CB: And I think sometimes we risk avoid because we don’t have a competitive environment that forces us to risk take and risk manage. So, we just avoid. And I would go back to what I mentioned earlier, that 85% of CEOs in Australia who think they’re going to be okay for the next ten years, business as usual.
DT: Yeah, that’s an incredible step.
CB: I might suggest there’s a bit of risk avoidance going on there or even risk denial, which could be worse.
DT: Yeah, yeah. Look, I think that is true. And I think that we, risk. Good leaders manage risk. If they don’t avoid it, they manage risk. Risk is inherent in everything we do. They are able to manage and mitigate risk, not just avoid it. And, because it’s actually through risk that value is created. And that’s a risk. I mean, I know because we all sit through risk committee meetings and risk frameworks and risk appetite statements, which are all really important. But actually, risk is your friend, and the great companies look for risky things, but then they mitigate, manage, through it, to get to a value creating proposition. That sense of the economy, but a source of life, I mean, we, we get married, getting married’s pretty risky, you know? I mean, and with all respect to my dear partner, who I’m very grateful for who has put up with me, but it’s, you’ve got to work hard at it, and because there’s risk, but you wouldn’t step back from for the world.
CB: No, no, but I suspect there’s been active risk management and, risk mitigation through that journey, David, rather than risk avoidance and denial.
DT: I would say, I think that’s absolutely right. Cameron would be able to stop at this point. Otherwise, we’ll get into trouble. I think that these are deep, traits around humanity and that, that is, it is so true. And they’re great analogies. Great, great examples of course, I mean, at the end of the day, business is still about, fundamentally people, even research is about people, and it’s about great researchers discovering the world around. You know, when, I look at, we have these discussions around you, why aren’t there more scientists? Why, if you look at secondary schools and people come to computer science or science or physics or maths, and yet, it’s sort of the richest part of them. As much as I enjoy Milton and Chaucer and, the arts, discovering the world around me is equally as exciting and enjoyable and creative. And so, we need to talk more about that, and then apply that in business to and then because people have businesses and businesses and you’re creating value, you’re improving other people’s lives. You’re making, creating value for others to hopefully improve the quality of life for a lot of people anyway.
CB: Yeah. So, yeah, I think you made an excellent point there, David, around innovation is done by people. It all is driven by people. And it’s interesting. You know, we talk about the private sector. We talk about research institutions, we’ve mentioned CSIRO obviously. But these places are made up of people. And it is the people that are driving the innovation and the relationships that drive the uptake of that innovation. It’s the institution just happens to be the the place they are at that moment in time, I think.
DT: Yeah, that’s so true. And institutions are but a framework for where people go. And look, but I do think that when we, when we were talking about organisation values and things like that, that’s what, that’s what all of us who are in leadership positions, it is creating those organisational structures or those framing that enables others to innovate to be incredibly successful. I mean, I know it’s a bit of a truism, but it’s actually really hard to do because we, there’s so many things that we want to put controls on or to report on that can unintentionally suppress innovation. And, and what you want to do is, is to create that innovative world where, which by, by definition, requires more trust. And we often talk about that. But the other thing that it requires on us as individuals, is accountability. And see trust and accountability go together. So, and when, when trust is broken, what happens? Control’s gone. Control’s gone. Well, I can’t trust you to put a coffee on your expense account, I mean, or whatever the stupid thing was. And yet what we need to do is create these, this world of trust and enablement, with boundaries and with accountability. So, we know things aren’t going to go well perfectly all the time, are they? You know, things are going to fail. So, but what you want is that old thing of fail fast. Let me know. Let me know when it’s failing and then we’ll… but don’t sit on it. Don’t sit. So, this goes deeply to the way societies or organisations work. And therefore, creating those, that environment, that allows people to innovate is so, so important. And because you’ve got to give people time to, to think and innovate.
CB: That notion of skunking. Very, very much an activity I, I must admit I benefitted from in, in a way when I was at CSIRO because we’d have great discussions about what was skunking and how it fitted into the world around us. So, it was sort of the fun part to a lot. With the with the uncontrolled portion of the agenda.
DT: Yeah. Well, that’s exactly right. And, and in that, is that sort of, in that chaotic world of ideation and bouncing ideas off, there’s, there’s incredible insight and, and you’ve got to allow room for that. And I think CSIRO is a great example of that, where you’ve got really talented, capable people. And you give them the freedom to go and work on these big, complex issues. It’s amazing what comes back. And so yeah. I think all companies can find some lessons in there.
CB: I do think that the notion of trust and accountability and offering that to the teams that implement, because as you say for the board, you need a certain degree of visibility and control. But of course, overdoing that constrains creativity and innovation. So, getting that trust, accountability, equilibrium, right, is a, I mean, is a very tough act, but certainly a really important part of the equation.
DT: A few things, as I reflect on your points. I mean, look, I, sophisticated and complex organisations we’re talking about today, I think, the vast, vast majority of people and teams in those organisations are pretty mature, capable people. Probably got kids, paying mortgages, doing things right. You know, there is the 1 or 2% that, maybe, who push, push the boundaries too much. And then there is, just within that big group of well-intentioned people, there’s things won’t always go right. The biggest failing is when there is no learning from it and it’s not proactive learning. And it’s just oh, well, it’s someone else’s money. Oh well, I’ll move on to the next thing. And it’s, there’s no, to your point of accountability. But rather than steering to what didn’t work, what did we learn from that? How do we improve that, that I, I really agree with that. That accountability and consequence needs to be really built into the system because, all of us are the same.
CB: I think, I think we’ve just generally speaking, the notion of failing fast is not quite the right phrase for me, its learning fast.
DT: But yeah, learning fast.
CB: If we learn fast. Like we’ll learn through failure, we’ll learn through success, we’ll learn from failure. Many argue more through failure.
DT: I really agree.
CB: Yeah, but. But if we learn fast, we’ll get better quicker.
DT: Yeah. I have no desire for anyone to fail.
CB: Yeah. If we, if we, if we keep failing and not learning.
DT: No, it’s not the right thing. Yeah.
CB: David, that is the true circular economy, isn’t it?
DT: Well, it is, it is. And that’s how you drive continual improvement, it is to learn, test and learn, test and learn a lot and follow…
CB: It’s the Deeming and the quality circles that you mentioned earlier that, the Japanese Kanban from the 60s and 70s in developing the automotive industry has as much relevance in this conversation as it did.
DT: It does, it does. And yet, so it does. And it’s a part of the solution. But then the Japanese just ended up only doing that. And, and sort of managed all innovation out of the system. And that was a great tragedy, and, or they became so, obsessed with the minutia, they lost the bigger picture. I mean, I don’t know if you’ve heard the story, the Sony versus Apple story. You know, it’s, Sony should have invented the Apple, the iPhone. Because Sony had the screen technology, it had the chip technology. It was in phones. It had the software; it had all the components. And Apple, Steve Jobs and the guys, went and pulled all that stuff from different places. And Sony, because of their management system of silos, not looking to the market, should have been it, but Sony was, of any company in the world, should have been the one who developed the iPhone, and yet they completely lost it.
CB: And the, the silos versus the integrators.
DT: Yeah. Not looking to what your, the customer wanted or the world of possibility. How you could change someone’s life. They were looking at the next generation of probably, then one K or two K, TVs, they were looking at chip design here. Now, they were, I mean, we used to sell Sony phones. They were good phones, but they were 3G, I think GPRS phones. But they said, oh no, there’ll never be enough wireless data to be able to handle the screen size, but they had everything in there going for them, but they just couldn’t find it. So, there you are, so we can all miss it.
CB: To be fair to the folks at Sony, the notion of siloing and the constraints that it causes on innovation are alive and well, not just through the private sector, but you might argue through the public sector as well.
DT: Yeah, I think we could.
CB: David, it has been absolutely terrific talking with you today. And I just wonder if there are a couple of closing thoughts or themes that you’d like to wrap up with this on.
DT: Well, well, well, firstly, thank you for putting up with me. It’s been enjoyable. Look, I just, I think that as, as we talk around innovation and we try to personalise it to all our lives and our careers, you just realise that the power of change, of being bold, of being willing to step out and drive change. And change comes from people, who are willing to step forward and give it a go. Be it a researcher or in a leadership position. And, and that’s what great countries do too, and then but it’s not just all hot air. You’ve got to back it up with deep thinking, how you got, the what and the how. What are you going to do? How are you going to measure it?” So, vision and execution go together, be it in an organisation, in your own life, in societies, communities. And we get this right as Australia, we have so much richness, so many great people who I, just, I’m so grateful to work with. We can create this wonderful country with people with great standard of living, great quality of life. And that’s what we’re all about. That’s what makes things a difference. So that’s why I enjoy these conversations and I, I know it’s hard. I know it’s not easy, but it’s, it’s always enjoyable to talk about.
CB: David, but that’s a that’s a terrific note to finish on with what innovation can do to drive a better Australia. So, with that, David, thanks so much for joining us today. It’s been terrific.
DT: Thanks, Cameron. Nice to talk to you.