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De-risking innovation in investment teams

Dan Purves



Ants carrying a Diamond

Micro-funding a diverse portfolio of ideas is the most effective strategy to create a successful culture of innovation among superannuation investment teams, according to an innovation consultant who will be speaking at the Conference of Major Superannuation Funds in March.

Organisations – including super funds – tend to suffer from one of two problems when it comes to resourcing innovation, says Dr Amantha Imber, head inventiologist and founder of consultancy company Inventium. They will either make big bets, or they’ll talk about innovation but dedicate no resources.

“I would be wary about focusing on incremental innovation,” Imber said. “The whole concept of disruptive innovation was born from studying companies that had wholly focused on incremental innovation. But because they had just focused on improving their core, they hadn’t looked at exploring more disruptive or breakthrough innovation, which led to their demise.”

Numerous researchers have concluded that for a company to be successful with innovation it needs to have a strategy that concurrently incorporates both incremental innovation and disruptive innovation. (Click here to see a meta-analysis on the culture of innovation.) The strategy of big bets or not resourcing innovation can both lead to failure, she warns.

“The most effective strategy is to take a micro-funding or a seed funding approach, where you have a diverse portfolio of ideas but you just bet small amounts in each idea,” Imber said.

She added innovation is a learned skill and, while there is a component that is genetically predetermined, for the most part it’s something that is learned.

“Setting aside resources to build capability around your people is very important, because it’s not a skill that’s taught at school – it’s knocked out of you at school and it’s not something that’s taught at most universities – so it is something [chief investment officers] really need to be investing in.”

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    She added another key driver of the culture of innovation is that the leadership level is comfortable with risk taking – for the executive not to see failure as a dirty word, but instead be comfortable experimenting and trying things out.

    “It is really important, from a chief investment officer’s perspective, that you are not just talking about innovation and disruption. [You need to] actually demonstrate you are embracing innovation, as well as talking about the things you are doing differently at a leadership level, at a company level and also at an individual level as well.”

    “Unfortunately it’s one of the most difficult things for organisations to do – specifically within financial services where you are working with a high degree of regulation, it’s difficult to achieve.”


    Dr Amantha Imber will be speaking at the Conference of Major Superannuation Funds (CMSF) at the Adelaide Convention Centre on March 16-18. To find out more about CMSF click here.