Creative Country: Innovate for customers, NAB’s Thorburn urges

NAB’s Andrew Thorburn says business needs to have the right mindset if Australia is to build its ‘own Silicon Valley’.

NAB’s Andrew Thorburn is critical of corporate short-termism. Picture: Bloomberg

National Australia Bank chief executive Andrew Thorburn says business needs to have the right mindset if Australia is to build its “own Silicon Valley”, and has criticised corporate short-termism for a lack of “sustainable innovation”.

At The Australian’s Creative Country conference yesterday, Mr Thorburn said it was time for Australia to ditch its “Lucky Country” moniker and aspire to be a more innovative “Creative Country”.

With NAB the largest business bank in Australia, Mr Thorburn said his customers were innovating and were expecting the lender to do the same.

“They’re expecting us to help show them how to do it so that they can be more successful,” Mr Thorburn said.

The comments from the head of Australia’s fourth largest bank come on the heels of a major management and corporate restructure that cut loose three long-serving executives from the lender, as it was split into three main divisions, each with $5 billion to $6bn in annual revenue.

Mr Thorburn said the shake-up was part of an efficiency drive, but came at a time when business confidence was fragile, loan impairments were increasing and digital disruption was challenging the models of all large financial institutions. He added that the bank’s digital focus was about improving customer service.

“Our busiest branch is now mobile. You know, it’s a bus; it’s a tram; it’s a train,” he said. “We now are on the cusp of, I think, the most demanding but in a sense the most exciting era of banking, certainly in my lifetime.”

Mr Thorburn said a business leader’s core job was to innovate because of the opportunity and growth it created.

“But in large companies this is hard because you have regulation, you have status quo, you have short-termism and the desire for quick fixes rather than the hard yards, which create lasting and sustainable change,” he said.

“We should be creating our own Silicon Valley in Australia and we need to aspire to be up there matching (and) competitive with the likes of Singapore and Israel in terms of ambition and innovation.”

NAB, in partnership with the Melbourne Institute of Applied Economic and Social Research, launched its innovation index yesterday, with the first data showing that time was a significant barrier.

The survey of 500 businesses also found that transport, storage, retail and manufacturing were the most innovative industries.

“What we found was that these innovation behaviours are driven simply by a desire to deliver a better experience, service and product to their customer,” NAB chief economist Alan Oster said.

“While large businesses were most innovative, microbusinesses with less than 20 people were the next most innovative group and they were particularly focused on doing things more cost efficiently, but their challenge was a lack of time to implement ideas,” he added.

Mr Thorburn said there were three cultural barriers to creating an innovation mindset.

“The first is that we need to redefine innovation; the second is that we should see business as the key driver of innovation; and third is the biggest challenge is to create a sustainable innovation impact, not just a one-off or short-term phenomenon,” he said.

“We must innovate for customers. That must be the driving purpose.”