The Single Biggest Predictor of Innovation for NZ SMEs Isn't What You Think

Our independent research report, The State of IT for NZ’s SMEs, surveyed over 300 business leaders and found that the single biggest predictor of innovation is much simpler: having a plan.

The data was unequivocal. When we asked businesses if they had an IT or digital strategy, and then cross-referenced that against whether they felt digitally innovative, a powerful correlation emerged.

• For businesses with an established or recently created digital strategy, a massive 87% considered themselves to be digitally innovative.

• For businesses with no strategy and no plans to create one, that number plummeted to just 16.7%.

As the report states, "it's about having a strategy in place." The act of planning itself—of thinking critically about where you are, where you want to go, and what technology you need to get there—is what sparks the innovative mindset.

From 'Keeping the Lights On' to Driving Growth

The 2020 lockdowns forced a wave of reactive tech investments simply to "keep the lights on." Our report found that in the aftermath, a significant number of businesses moved to formalise their approach. Roughly a third of SMEs had an established strategy, while another 41% had recently created one.

This formalisation is critical. Without a strategy, technology investments are often made in isolation, leading to the overlapping apps, spiraling costs, and security gaps that many businesses were trying to consolidate post-lockdown.

A robust strategy moves technology from being a defensive operational cost to an offensive driver of growth. It provides the framework to ask the hard questions:

• Is this investment moving us closer to our business goals?

• Is it improving our customer experience?

• Is it making our team more productive and engaged?

The report found that 7.5% of SMEs had no digital strategy and no plans to work on one. In today's landscape, that's not just standing still; it's actively choosing to be left behind. Transformation and innovation require careful planning, and those who invest the time to create a strategy are positioning themselves to win.

To learn more about how to build a robust IT strategy and see how your planning efforts benchmark against your peers, download the full report: The State of IT: New Zealand’s Small and Medium-Sized Business Edition

Editor's Note: This article was written based on our 2021 "State of IT for NZ SMEs" research report. While technology changes, the core principle discussed here—the immense value of having a clear strategy—is a timeless business lesson that remains the foundation of all successful transformation. Minor revisions to the original content have been applied to maintain that context.