Enterprise Leadership: Innovation and Change in Australian Banks

This literature review examines innovation and change within Australian banks, focusing on the research conducted by Peter and Raphael (2003) on Australian Banks between 1981 and 1995. The review highlights the influence of non-local organizations on the innovation adopted by these banks and emphasizes the correlation between financial performance and innovative activities. Commonwealth Bank of Australia's approach to innovation, including its 'CommBank Innovation Index' and 'Proactiv Payroll' customer-centered software, is analyzed, revealing the bank's adoption of product and process innovation theories. The review concludes that banks that adopt innovation different from their competitors are able to perform consistently in the market and also enjoy competitive edge in the industry.

Enterprise Leadership
Literature Review

Peter and Raphael (2003) undertook research in order to find out about the change and
innovation adopted by the Australian Banks between the years 1981 to 1995. It was found,
that most of the innovation adopted by Australian Banks was influenced by organizations that
were not local. The research has concluded that the financial performance of a bank highly
depends on the innovative activities adopted by banks from time to time. It was found that
banks that adopt innovation different from their competitors within the organization are able
to perform consistently in the market and also enjoy competitive edge in the industry. Hence,
it can be said that the Australian Banks has been able to perform far superior with the help of
innovative activities and adoption of changes within the banks (Roberts & Amit, 2003).
Commonwealth Bank of Australia has given special emphasis to innovation within the
organization and in order to adopt innovation and changes within the organization, the bank
has developed its own theories and concepts. The organization reveals that innovation for the
bank means 48% improvements, 45% new ideas and products, 13% creativity and 4%
technological advancement within the organization. The bank has adopted the Oslo Manual
in order to develop the innovation measurement framework for the organization on the basis
of which, the bank measures their innovation. On the basis of this, the bank has developed
CommBank Innovation Index. This index is used to measure the management capabilities of
the organization as well as the entrepreneurship behaviours within the organization. In order
to bring this innovation change in action, the bank has developed Proactiv Payroll which is a
customer- centred software design in which the key drivers of innovation are processes,
opportunities, risks, as well as the products and the innovation is measured in the area of
process and product (Commonwealth Bank, 2017). Hence, from this, it is clear that
Commonwealth Bank of Australia has adopted the product and process innovations theory
within the organization. This theory of innovation is usually adopted by high performing
banks. Because of the innovation in one of the two, that is product or process, the

organization is able to implement innovation in every activity of the bank (Damanpour &
Gopalakrishnan, 2002).
References
Commonwealth Bank, 2017. CommBank Business Insights Report. [Online] Available at:
https://www.commbank.com.au/content/dam/commbank/assets/business/can/move-forward/
commbank-business-insights-national-report-fy18.pdf [Accessed 09 September 2018].
Damanpour, F. & Gopalakrishnan, S., 2002. The dynamics of the adoption of product and
process innovations in organizations. Journal of Management Studies, 38(1), pp.45-65.
Roberts, P.W. & Amit, R., 2003. The dynamics of innovative activity and competitive
advantage: The case of Australian retail banking. Organization Science, 14(2), pp.107-225.