KEY POINTS:
If a company is not innovating it is slipping behind is the message from Wotif CEO Graeme Wood. And he should know - his experience is in the ever-changing information technology world. He started Wotif - a website offering accommodation in more than 35 countries - with a friend Andrew Brice. Wood had no background in the tourist industry.
Wood, who has also become a public speaker, had been working in technology for about 35 years before Wotif.
He opened his first business in the 1980s. He came by the idea of Wotif eight years ago. "Knowing none of the detail of the hospitality industry was an advantage. It helped me look at things in new ways.
"I noticed that the industry's levels of technology were older than in most industries and that it was a fragmented market. I felt the industry required change from the outside, not from within.
"What we offer is invariably better-priced accommodation and convenience. Strong customer service (24 hours) can be accessed from anywhere in the world."
For a business to succeed, Wood has found that innovation has to be "lived and breathed".
"You have to be a risk taker and be able to make mistakes.
"People in management positions who do not take risks quite simply block new ideas and, therefore, block innovation."
In an environment with no innovation, creative people get bored and start going through the motions. They take their creativity outside the office - by writing music or taking up art. Why shouldn't the organisation get the advantage of their creativity?
"Every organisation has potentially got people with a creative spark. The business might as well take advantage of this. Listen to them."
Unfortunately, Wood says, this invariably does not happen.
"Many managers don't like change. Innovation is about change - it's about taking a fresh look at an old problem and coming up with different ways of solving it."
He points out that innovation can be inexpensive. "In organisations, people with ideas just need to be able to flourish. Perhaps the ideas are small. The flow of ideas is what affects the culture of the organisation.
"Creative people feel like they're going somewhere in such a workplace."
Wood says he's noticed a problem when organisations give innovation lip service but don't really encourage it.
"People at the top can block good ideas. Others can grumble rather than innovate."
He says the key to the success of Wotif was that he had no preconceived ideas about the industry.
"I worked with a team, we had a pool of ideas - some worked, some did not. The general attitude of innovation permeated the place. Those who were for it wanted to stay and grow the business."
Encouraging innovation creates an exciting workplace and is, therefore, a way to retain the best staff.
Wood says his management style is not to be threatened by other people's ideas. "I tend to delegate. I like to give people responsibility, this is critical.
"I say: 'I don't want to handle this part of the business. You can do it, so do it.'
"With this, people's spirits lift. By giving people real responsibility, you are saying they have potential, that they are trusted. This generates energy, which bounces around, creating a culture of innovation. It's so important. It really lifts a place and makes for a dynamic workplace."
Wood says for him this is the only way to work, "it's enjoyable and creates new opportunities. It frees me from the operational stuff and helps me to look around at what else can be done to grow the business."
Wood says he tends to employ a lot of young people and enjoys watching them develop into their career. "There are no career paths mapped out at Wotif, but there are plenty opportunities if they're worked for.
"I like people whose minds are not set in concrete, people who ask why we are doing things. I find this in young people."
Management consultant and author of Workplace Bullying - The Costly Business Secret Andrea Needham has another take on creating an innovative culture in the workplace.
"It's leadership, leadership, leadership," she says.
"It's about people realising that productivity is not about cracking the whip.
"In New Zealand, good managers are seen as those who dot their Is and cross their Ts. A manager who tries to control all the time is taking away the freedom to be innovative from staff members."
Needham says the smaller the number of employees, the more possible innovation is. "Twenty-five people and no more is what's needed for an innovative culture - above that you get bogged down with rules, regulations and forms."
She said for bigger companies who wanted to encourage innovation, it would be a good idea to limit individual departments to 25 or fewer people.
One of the big killers of an innovative culture is a clock-watching manager.
"Bill Gates created a culture where management didn't stipulate when people arrived at work or left - but they did have specific goals and deadlines - and look at what he created.
"Of course when you're creating an innovative culture, you have to provide boundaries, these include costs and deadlines. Once you've made that clear, it's up to staff to take up the challenge.
"Most will come out with something innovative.
"Think in terms of classrooms - what happens when a controlling, strict teacher leaves the room? Mayhem. And when a teacher who allows some freedom leaves the room? Quiet."
Here is where the rule of reciprocity comes in - if people feel they are being treated well, they will mostly treat the company well. Needham says there will be a minority who don't play the game and this is one of the reasons you do have to set boundaries to achieve firm results.
"Of course, there will always be the mavericks who test and challenge the boundaries.
"As far as the workplace hierarchy is concerned - rules and regulations are necessary, but it depends on how they're written. You don't want to force people not to think out of the square."
Needham says to encourage innovation, there has to be no punishment for getting things wrong - but it's a good idea to trace back how you got there.
"Stop punishing people - they should get a pat on the back for trying.
"A true screw-up is repeatedly doing something wrong in the same way. You need to look at how to avoid doing this.
"It encourages innovation to look at what went wrong - not to blame someone."
Needham says companies need to realise that wages are not a cost - they are an investment in productivity.
Another thing that encourages workplace innovation is diversity.
"There's nothing worse than a group of middle-class white men making decisions for women and other groups.
"Diversity is needed in all levels of management.
"Not only does this help innovation, it helps a company understand its customer. There is a creativity in bringing ideas of other cultures together. All cultures are amazing contributors as they have different world views."
Needham says productivity in New Zealand does not tend to be high. "It's nothing to do with laziness. People will and do work hard. It's about working smart. For a manager to be confident enough to encourage innovation takes courage - trust your staff, look at what customers are asking, talk to your reps as long as you have clear boundaries, you can encourage innovation"
Wood says Wotif now employs about 160 people - about 70 per cent in Australia, the rest in New Zealand, Singapore, Malaysia, North America and Britain
"Being innovative is a fun way to make money. It's about making change a constant.
"Managers need to learn new ways and be willing to change. If they don't have that attitude and aren't able to adapt - they're wrong for an innovative organisation and the organisation is wrong for them."
