Tonight’s Federal Budget cuts are at risk of stifling innovation for many Australian businesses. Cuts include a reduction in R&D Tax credits and the abolition of Commercialisation Australia and the Innovation Research Fund. In the wake of tonight’s budget announcement, here are three ways to innovate when budgets are tight.

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Introduction
14th
May, 2014
Last night’s Federal Budget cuts will make it even tougher to
innovate. Cuts include a reduction in R&D Tax credits and the
abolition of Commercialisation Australia and the Innovation Research
Fund. Where will this leave Australian businesses? The future
impacts are hard to predict.
Commercialisation Australia has supported many success stories,
including recruitment behemoth SEEK. The CSIRO is also losing 500
jobs. The research institute has been instrumental in many
innovations across a range of industries, including the development of
Wi-Fi technology. Think for a minute. Where would we be without
SEEK.com? Where would we be without Wi-Fi? What future
innovations will never see the light of day due to these substantial
cuts in the Federal Budget?
Now, it would be very un-Australian to complain about something
without rolling up our sleeves and doing something about it. So, in
the wake of last night’s budget announcement, here are three ways
to innovate when your budget is tight.

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Table of Contents
THE 80/20 RULE 3
DO ONE THING, DO IT BRILLIANTLY, THEN GROW 4
MASTERING SIMPLICITY 6
Underestimating simplicity 7
New bank, one product 8
New system, one focus 8
The 80/20 rule
It’s surprising how often the Pareto Principle shows up in economics
and business. The Pareto Principle, popularised by author Richard
Koch, states that often 80 percent of effects come from 20 percent of
causes. In his second book, Living the 80/20 Way, Koch provides a
number of examples of 80/20 in business. How many of these
circumstances apply to your business?
 80 percent of your profits come from
20 percent of your customers
 80 percent of your complaints come from
20 percent of your customers
 80 percent of your profits come from
20 percent of the time you spend
 80 percent of your sales come from
20 percent of your products

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Working out the 80/20 opportunities in your business could be one of
your biggest opportunities to innovate. What would happen if you
standardised the 20 percent of processes that are performed most of
the time? What would happen if you focused your solution on
prioritising the 20 percent of system features that deliver the highest
ROI? What would happen if you let go of the customer categories that
generate the highest number of complaints? What would happen if
you let go of the 80 percent of customers who only contribute 20
percent of your income? These are substantial changes, not to be
entered into lightly, but the world’s biggest companies are harnessing
the power of 80/20 and simplification, with compelling results.
Do one thing, do it brilliantly, then grow
When it comes to innovation, bigger is not always better, and this is
more the case every year. With the explosion in the App-based
approach to software development, global small businesses that do
just one thing but do it brilliantly are taking the world by storm.
Daniel Priestley explores the Global Small Business phenomenon in his
latest book, The Entrepreneur Revolution. Let’s take a look at a few
examples.
Fitbit has become a leader in pedometers with an incredibly feature-
rich solution in a minimalist package. This tiny, elegant pedometer
does away with the bulkiness of many of its competitors (I always

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loved the idea of using a pedometer to measure my daily step count
but didn’t particularly want to accessorise my work suits with a bulky
pedometer). It’s also incredibly accurate (more accurate than many
of its competitors, measures how many floors you’ve climbed, as well
as your step count, and syncs wirelessly to your smart phone or
computer so you don’t have to enter your step count manually.
Fitbit also has a feature rich online dashboard, automatically tracking
your progress against goals, giving you badges when you hit 10,000
steps for the day or have climbed 1000 lifetime floors. It also allows
you to sync up with friends (my sister and I cheer each other’s prog-
ress despite living more than 800 kilometres apart). Fitbit does one
thing and does it brilliantly, starting simple and adding features,apps,
and products along the way.
Evernote has become a leader in knowledge management, or as I like
to think of it, outsourcing your brain. I no longer use Post It notes
stuck to my computer screen to remind myself to do things, I jot it
down in Evernote. I can take a photo of a product I want to research
on my smart phone when I’m out and about. I can save text, images
and URL’s from a web page I’ve visited for articles I’d like to read or
reference.
The feature set keeps getting better and better. You can share note-
books with team members privately and save final versions of key

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documents. Powerful tagging and search means that you can easily
find that note you jotted down three weeks ago. The location you
took the note is tagged too, so if you went to a conference in Sydney
you can search by location and find all your Sydney notes, sorted by
date. Evernote does one thing well, does it brilliantly, then grows.
Innovative Companies lists such as Fast Company and BRW are
dominated by global small businesses that do one thing (or started
with one thing) do it brilliantly and are taking on the biggest brands
in the world. Evernote is now taking on the likes of Microsoft
Sharepoint and Google Docs with its feature rich Evernote Business
offering. This trend is making it even more challenging for big
businesses to innovate. Those that are succeeding are finding ways to
focus start small and do it brilliantly. Starting with one new shoe at
Nike. Starting with one new store at Target. Starting with one city at
Amazon. Start small, do it brilliantly and grow from there.
Mastering simplicity
One of the keys to Apple’s success has been that Apple is not
focussed on packing in as many features, as many apps, as many pre-
bundled applications as they possibly can. Instead, they focus on the
features that they see as most important, and execute them
brilliantly. Apple became the largest company in the world with only

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seven products. How many products does your company sell? How
innovative is your execution?
Underestimating simplicity
Something to consider in refining your solution, making the final
decision on the direction you’ll take, is how complex is your solution
- don’t underestimate the power of simplicity.
Many people think that if it’s simple, it must be easy. Not true! When
you’re an expert in something, you see that subject in a very differ-
ent way to the ‘average Joe’. Take colour - the ‘average Joe’ will see
an artist’s palette with five blue paints, and see blue, blue, blue,
blue, blue, but an artist or graphic designer or fashion designer will
see cerise, marine, sky, cornflower, and peacock.
When you’re an expert you see variables the layperson can’t distin-
guish. You see problems others don’t pick up on. Unfortunately this
can also mean that you overcomplicate things unnecessarily because
you want to account for all those variables, you want all the bells and
whistles you know are possible, and you want the solution to be the
solution you’d want to use yourself.
Similarly, there is a tendency to think that innovative solutions need
to be complex; however, many amazing innovations are incredibly,
powerfully simple. We’ve already talked about the emergence of

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global small businesses like Fitbit and Evernote that do one thing and
do it brilliantly, but big business is also unlocking the power of
simplicity.
New bank, one product
ING launched into the Australian market with a single product - their
high interest online savings account, their only product for several
years. They started small, executed brilliantly, and then grew.
In 2009, NAB jumped on the bandwagon, launching a separate brand,
UBank, with distinct branding, systems and culture from the parent
company, and a single product - a high interest online savings
account, that quickly became a rival to ING for Market Leader status.
Start small, do it brilliantly, then expand.
New system, one focus
In 2010 ANZ became the first Australian bank to launch a native
Smartphone internet banking app. Their approach - keep it simple -
the first version gave you access to your own accounts, including the
ability to transfer to friends’ accounts even without their account
details (all you needed was their mobile phone number). Features
like BPAY and versions for Android and other devices were added
later.

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One of the largest companies in the world, BHP, is living and breath-
ing the power of simplicity, with one global system for HR, Finance,
Supply and Work Management with one standard set of processes
across 100,000 staff in 22 countries and 20 mining divisions. Now this
hardly seems an example of starting small, but if BHP can master
simple, why can’t anyone, at least in some parts of the business.
Over to you...
If the big players can harness the power of simplicity - what can you
do in your team? What are your 80/20 opportunities? What one thing
could you start with? Do one thing, do it brilliantly, then grow.
There are many complex, challenging problems in our communities
and in our businesses. Tight budgets, limited resources and changes
in direction only make it tougher. If you can harness the power of
simplicity, you can still create remarkable results.
When you focus on 80/20 opportunities…
When you do one thing, do it brilliantly, then grow…
A simple, elegant solution can have a remarkable impact.

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About the book
This guide to innovating on a budget has been adapted from Jenny’s
book, The Innovation Recipe: Key ingredients for world-class results
in big business. Details about the book, including where to buy the
book, are available on the Zumbara website.

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Mastering your Innovation Recipe
Zumbara can help you to translate great ideas into great results. Our
principal consultant, Jenny Vandyke, has developed Zumbara’s own
six-step Innovation Recipe to help business leaders translate great
ideas into great results. Jenny’s approach is based on more than 10
years senior level experience on major projects at Australia’s largest
companies. Past projects have included National Australia Bank, BHP
Billiton, ANZ Institutional Bank and KPMG. Jenny has managed
multiple successful implementations and delivered award winning
results.
In addition to her practical experience, Jenny has spoken at various
conferences and industry events on innovation and change
management, and over the years she has delivered hundreds of
workshops. Jenny loves her work because for more than ten years
she has been getting businesses buzzing. Jenny and her team can help
set you up for innovation success through our range of services.
Strategy workshops
At Zumbara’s strategy workshops we work with leadership teams and
boards of directors to build a strategy that is more than empty words
– a strategy that the whole team can commit to, with a practical plan
to translate strategy into bottom line results. We can tailor an

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agenda to suit your needs, whether you’re setting the strategy for a
specific project, your team, or your entire business.
Innovation Recipe briefings and keynotes
At Zumbara’s briefings and keynote presentations, we uncover the
secret ingredients to innovation, using Zumbara’s own six-step
Innovation Recipe to translate ideas into results. Zumbara’s
Innovation Recipe covers the key ingredients for selecting the right
ideas, as well as all the key ingredients for successful
implementation, including leadership, planning, risk management and
communications, to name a few. Our briefings can be tailored to suit
your needs, ranging from a 30 minute keynote presentation through
to a multi-day training program.
Topics available include:
 Five signs your project is a lemon – innovation mistakes to
avoid
 15 minute innovation - how to innovate without turning your
business upside down
 Get out of the Kitchen (and Talk to People) - 7 secrets to
maximise your stakeholder engagement
 The Power of Simplicity - lessons from the world's most
innovative companies
 Risky business - managing risk in innovation projects

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Find out more
To find out more about our services and how we can tailor a solution
to meet your needs, drop us an email to arrange an initial
consultation. We’re based in Melbourne but we travel within
Australia and internationally for speaking engagements and client
projects.
Jenny Vandyke | Director and Principal Consultant
0412 602 362 | Jenny.Vandyke@zumbara.com.au
www.zumbara.com.au
We look forward to working with you and your team
to master your own Innovation Recipe.