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Awarded as Global Top 100 CEO

maj 13th, 2018 • NewsKommentering avstängd

Unlearning Is the New Learning

april 21st, 2018 • UncategorizedKommentering avstängd

To Learn or to Unlearn – that’s the question

Take a moment right now to put everything on pause and visualize the person you were a decade ago. You didn’t have a smartphone because they didn’t exist. The BlackBerry was the one of the dominant form of business communications, but they had no cloud-based app ecosystem to support them. Twitter wasn’t hatched yet and Facebook was in its infancy. MySpace looked unstoppable. If you needed to go somewhere, you had to stand on a street corner and hope a cab would stop for you. While standing on that corner, you probably saw a Blockbuster DVD rental store across the street.

The point is that there are many ways that the cultural, technological, and financial landscapes have redefined since then. Would you act on investment advice from the person you were 10 years ago, or would you rather give you past self the benefit of your current knowledge?

The question is not academic. It represents a very real problem in management all over the globe today. Board members, C-Suites and executives of all stripes are attempting to apply the lessons they learned 10 years ago (or more!) in MBA school. The results have often been disastrous.

Business Model Innovation

You cannot take the latest technology and force it into old business models. Or you can – but your business will soon be obsolete. Along the same lines, it won’t work to take old technology and try to jam it into a new business model. The past can be instructive, but it can’t no longer function as a predictor of project feasibility. The most effective decision-makers in the new world of global volatility and trans-industry disruption are those who toss out old assumptions and iteratively test what actually works as operational parameters transform.

Mobility, digitization, distributed ledgers, data center access by the microsecond, and crowdsourcing have practically eliminated barriers to entry in many sectors. Disruptors can appear overnight from anywhere in the world to make technologies or entire industries obsolete. In this climate, business continuity starts with a risk mitigated portfolio of short-term, mid-term and long-term innovation projects. The short-term projects are where leaders are on their surest footing, making minor improvements and simple variations of existing market winners.

Fail to learn

It’s a very different story for mid- and long-term projects with their corresponding levels of uncertainty. To choose the best investments under those conditions, project teams need to test out new concepts with clear, verifiable hypotheses and using explorative leadership styles. Failing is part of learning, but the most successful innovators identify the signs of project failure early enough to redirect resources ASAP. The next step is another common breakpoint. Companies that succeed with innovation have the market agility and the tools in place to scale up rapidly as soon at the tests prove out an idea.

Confidence and persistence

Confidence and persistence, which are keys to getting the business running, are not be enough
to get it off the ground. Too many business leaders still believing that they can figure it all out by intuition (without adequate data) and adjust trajectory on the fly in response to the market. That is a formula for joining the BlackBerries, Blockbusters and the 70% of businesses operating today that will be gone within ten years.

Learn more about future-proofing your business with management model we’ve developed The Innovation Framework including Wheel of Innovation for assessing, measuring and governing innovation. We developed the leadership model UPACS (for smarter data-driven decision-making through uncertainty, paradoxes, ambiguity, complexity and speed) for modern leadership and we developed the ground breaking model for implementing innovation systems. Details are inside Innovation360’s latest release Sustainable Growth and Profits, Volume 5 of our Complete Guide to Business Innovation.

Innovation by the Numbers

april 21st, 2018 • InnovationsKommentering avstängd

In Innovation Leaders recent Master Class, “Innovation by the Numbers,” I explore how innovation metrics and analytics could be used to move company strategies forward. Have a look and enjoy.

You can watch the Master Class below:

 

Innovation by the numbers, the secret source in UAE

mars 14th, 2018 • InnovationsKommentering avstängd

The United Arab Emirates (UAE) Vision 2021 is one of the most ambitious innovation visions on the planet, aiming for sustainability, health, education, renewable energy and a knowledge-based economy. All elements calling for the best of the best within innovation management.

We are honored and proud to hand over the innovation report and InnovationIQ Score to his Excellence Dr. Abdullah Belhaif AlNuaimi for the work of analyzing the Ministry of Infrastructure and Development’s capabilities, culture leadership. Furthermore, for his efforts in outlining necessary and tangible changes that are to be done to fulfill the objectives and strategic initiatives leading to the achievement of the Vision 2021 for the UAE.

UAE2-270x190His Excellence Dr. Abdullah Belhaif AlNuaimi is a pioneer in the Gulf region and the first to use the leading innovation score InnovationIQ to communicate and set goals for driving the innovation efforts in a systematic way. As a role model for the region, he has already inspired other ministries and the private sector to follow making the Vision 2021 come true.

 

We thank you for your hospitality and making this possible. Let’s innovate for a better world, inspired by the leadership of brave people making real change possible.

Managing Change Despite Uncertainty

mars 14th, 2018 • InnovationsKommentering avstängd

Even if you know what your customers want now, how do you know what they will want tomorrow? How can business leaders plan for business continuity in the face of a volatile, unpredictable global climate frequently rocked by disruptive tech and the sudden appearance of competitors from unexpected quarters?

Innovation360 has identified are three levels of change management essential for creating a culture of innovation. The first is aimed at the macro/micro-scale of environmental volatility, using a management model invented by Magnus Penker called UPACS (Uncertainty, Paradoxes, Ambiguity, Complexity, and Speed). The second recognizes all of the organization’s internal forces, including preparing and motivating stakeholders to handle the reality of radical innovation. The third is concerned with micro-level of developing stronger innovation skills within project teams.

Introduction to UPACS

UPACS starts with the understanding that an organization is not a monolith. It consists of interconnected sets of humans who operate under a broad range of perceptions, aspirations, and abilities. This assumption must be stated and reinforced because it is too often forgotten in the simplification of change management plans. If you start from a clear layout of the nature of your organization and your people, you can more realistically assess strengths and weakness in implementing change.

The Roles of Leadership and Team Aspirations

Leadership using UPACS can be highly demanding because it calls for the simultaneous deployment of team abilities and coordinating shared aspirations of the change agents. Aspirations have often served as the engine of a successful transformation process.

In the final analysis, all change is about people – not technology and not market value. People work within a social contract defined by group values and they depend on their assets like tangible technology and intangible processes. What motivates people to change is an evolution in thinking about their environment and their aspirations for the team.

UPACS is a formalized system for unpacking the team’s essential motivations and stressors. The success of change projects is directly related to how leaders manage these aspirations and shape them into new operating norms. Impact factors on the change team include not just the actions of leadership, though, but also the prevailing culture, organization, roles, incentives, talent management, and so on.

Learn more about specific case studies, including how UPACS helped a recruiting and staffing company overcome years of failed digitization initiatives, in Innovation360’s new book Sustainable Growth and Profits, the final volume of the Complete Guide to Business Innovation.

The Constancy of Change and the Path to Continuous Value Creation

mars 14th, 2018 • InnovationsKommentering avstängd

Overly simplified models of the world lead inevitably to inadequate conclusions and unprofitable pursuits. That’s why so many businesses recently have succumbed to disruptive outsiders. They weren’t building enough interdependencies and complexities into their market projections. Cisco’s former CEO is widely quoted as forecasting that around 40 percent of the companies operating today will no longer exist within 10 years.

Due to factors such as increasing connectivity, a population explosion, and the exponential rate of technology development, market dynamics are changing more rapidly than ever before. A more stable place for business to operate and create value would be within a framework of values, capabilities, and the aspirations defined independently by each organization. On the global scale, political, economic, social, technological, legal, environmental and demographical drivers all must be taken into consideration in creating that framework. These are dynamics that business leaders can’t afford to ignore or simplify.

We’ve come up with 8 questions to help you analyze and outline strategies for market development now and in the near future:

  • What is the competitive economic environment in which we must operate?
  • How is it changing?
  • What are our assets (tangible and intangible) and how do we use them to give us an advantage relative to competitors? How is our competitiveness changing?
  • Who are our customers/clients/members today? Who will they be tomorrow? What do they/will they “need”?
  • What is our unique value (“sweet spot”)?
  • How do we align our assets, our people, and values systems to deliver on our unique sweet spot?
  • How do we handle shrinking sweet spots and the disruptive sweet spots of competitors, both new and potential?
  • How do we organize for interacting with other organizations to identify new sweet spots and prolong, extend, and preserve existing sweet spots, whether they are our own or a part of a cluster/echo system?

 

Book 5 3D

Dive deeper into all of these issues in the latest edition of Innovation360’s Complete Guide to Business Innovation. The final volume, Sustainable Growth and Profits, just became available in print and electronic versions through Amazon. It is designed to help you discover the most prudent path through uncertainty and build your own innovation portfolio inside a learning organization.

First volume in the series ”The Complete Guide to Business Innovation” is out on the book shelfs

augusti 22nd, 2017 • InnovationsKommentering avstängd

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Buy it today at Amazon.

Artificial Intelligence & Innovation Management for Business Leaders

juli 26th, 2017 • AI, InnovationsKommentering avstängd

You must not fight too often with one enemy, or you will teach him all your art of war. –  Napoleon Bonaparte

Not long ago one of my clients, a very skilled former top consultant, now a seasoned industry leader, asked for “Artificial Intelligence for Dummies”. An interesting question for a very skilled and insightful person and somewhat reminding of the internet hype in the 90s when firms made fortunes via fund raising and spectacular non-working projects for the new economy. Is AI (Artificial Intelligence) akin to The Emperor’s New Clothes, a tale from Hans Christian Andersen about two weavers who promise an emperor a new suit of clothes which they claim is invisible to those who are unfit for their positions – is it stupid or incompetent? Think about when the emperor parades before his subjects in his new clothes, and no one dares to say that they do not see clothes on him for fear that they will be seen as “unfit for their positions, stupid, or incompetent”. But, finally, a child cries out, “But he isn’t wearing anything at all!”. The very valuable client made a point by asking if there is an Artificial Intelligence for Dummies book, because it was just like in the 90s when there was spectacular stories of technology, and a threatening sense of not understanding of it – and we might very well end up in the same way as we were then. The technology matures but many of the promises that were made have been broken. However, a few new enterprises, on a very large scale, have grown as a result of the investments and technology that emerged during the 90s – and this has been the case over and over again throughout history. Technology, investment, and brave leadership have all reshaped the future in times when promises and dreams were broken. At the same time, coincidences have often played a role in the history and outcomes.

One example how technology and coincidence most likely changed history is Enigma. The Enigma machine is a piece of spook hardware invented by a German and used by Britain’s codebreakers to decipher German signals traffic during World War Two. It has been claimed that as a result of the information gained through this device, hostilities between Germany and the Allied forces were curtailed by two years. What would have happened if the British codebreakers had not cracked it? We do not know, but what we do know is that it was cracked by a number of skilled mathematicians, including Alan Turing, and that their breakthrough was reached by, for example, acquiring this stolen Enigma and the use of new technology called the ‘Bombe’ (BBC, 2017).

While technology, strategy, and knowledge can change things, sometimes in combination with coincidences, players can also learn from each other – advantage become equalized and balance is reached until the next tipping point is reached due to temporarily advantages. Or, as Napoleon Bonaparte put it, “You must not fight too often with one enemy, or you will teach him all your art of war”.

Innovation is about gaining, sustaining, and using advantages for as long as possible while, at the same time, learning for the coming situations without exactly knowing if, when or how it will be used. Innovation is about preparation. Recall the three horizons first defined by Baghai, M., Coley, S., and White, D. (1999), these can be described as:

  • The first horizon (H1) concerns itself with smaller, incremental innovations that build on existing business models, extending the existing S curve of the company. These can normally be accomplished with little structural change and lead time.
  • The second horizon (H2) is more creative and proactive, expanding and building new businesses into new directions.
  • The third horizon (H3) is sometimes characterized as “moon shots” or “skunk works.” This is a much more explorative approach to future S curves, to be commercialized in H2, which ends up producing significant cash flows in H1.

Now to artificial intelligence: Ask yourself in which horizon is AI and how should you approach and, if possible, use it? To guide you when answering this question, we will walk through five steps to investigate, understand, and project possibilities of using artificial intelligence in business. These will be based on a combination of technology insights and practical experience.

I will express the steps using straight-forward language, with pros and cons and, most importantly, it will be clean from dystopic scenarios. When reading the five steps, keep in mind that the increase of patent applications and investments in artificial intelligence in United States and China is tremendous – with 28,000 filed patents, 35,000 AI companies, and over $20bn USD in investments from only 2016, which is forecasted to boost global GDP by $16trn (The Economist, 2017). The most likely reason behind the growing interest in AI is the growing computing power and new computer architecture which can perform vector operations much better (important for AI) than traditional computer architectures. It is not a brave statement that we will see totally new computer architecture and algorithms taking AI even further than today and you will benefit from getting ready for the future.

Download the full paper (pdf) covering following five steps:

  1. What is Artificial Intelligence and Machine Learning – How Does it Work?
  2. What can Artificial Intelligence and what Deep learning can do for you?
  3. How Artificial Intelligence Can be Used to Reinvent Your Business Model
  4. Limitations and Business Risk of using Artificial Intelligence and Machine Leaning in Business Development
  5. When Will “The Terminator” be a Reality?

Download the full AI paper here

Strategic goals and design principles for establishing innovation centres

juni 20th, 2017 • InnovationsKommentering avstängd

In many assignments, we see that the client has already established an innovation centre, or may be planning to do so. But often such centres do not deliver on expectations and instead can turn out to be very cost inefficient structures that clash with the rest of the organization. However, ignoring innovation and the capability it can give an organization is not a viable option in today’s marketplace, so the question is how can we better design such capabilities to drive forward innovation?

First let´s recap and set out some basic innovation concepts. Steve Coley defined in 2009 how innovation can be divided into three parallel horizons, each evolving along a predictable S-curve. The first horizon (H1) concerns smaller, incremental innovations that build on existing business models, extending the existing S-curve of the company. These can normally be accomplished with little structural change or lead time. The second horizon (H2) is more creative and proactive and involves expanding and building new businesses into new directions. The third horizon (H3) is sometimes characterized as “moon shots” or “skunk works.” This is a much more explorative approach to future S-curves, which can be commercialized in H2 and end up producing significant cash flows in H1. Ideally, a company should be working on all three horizons simultaneously. The biggest failure of many contemporary strategies is that they are stuck in H1. Some studies indicate that up to 99 per cent of businesses are trapped in H1 due to “spiral staircase” leadership, whereby in the interest of safety and risk aversion, leaders mandate step-by-step projects with narrowly-defined goals and a predictable ROI. This strategy has also been compared to arranging deckchairs on the Titanic, a futile action in the face of an impending catastrophe. In this scenario, large H1 projects tend to get prioritized to such an extent that they can generate internal traffic jams, holding back projects that must vie for the same resources. The result is too many, too big and too cautious projects get the go ahead that don’t create real value for the firm or their customers.

Often a more successful approach is seen in companies that deploy their limited resources more optimally through nurturing today’s profit (H1), developing new ideas for tomorrow’s profit and market share (H2) and taking part in building the future (H3). To link strategic direction and business modelling in a hyper-competitive market with change and transformation programmes for driving successful business development in several horizons, one must have a thorough understanding of what innovation management means within the context of your own organization.

Setting strategic goals and how to make the correct design choices

To gain a full understanding of what innovation management means to an organization, the strategic goals must first be defined. According to Peet van Biljon (Senior Advisor, Innovation360), there are ten typical strategic goals driving why an organization might establish an innovation centre, namely, to:

  1. Create a critical mass of skills and knowledge
  2. Obtain new consumer/user insights
  3. Adopt and adapt new technologies
  4. Collaborate externally (external networks, partnerships, JVs)
  5. Identify new business opportunities
  6. Establish a footprint in new or emerging markets
  7. Scale innovations faster
  8. Build a test bed for rapid experimentation
  9. Provide a showcase of new offerings
  10. Create a base for future acquisitions.

Outlining the strategic goals is the first step to follow when considering the possible design choices. Based on the work of Peet van Biljon and Magnus Penker, there are are a number of design choices to be made:

  • How to link to “parent’s”/“owners” growth strategy
  • Choice of geographic location
  • Governance and reporting structures
  • Details of parent involvement (formal and informal)
  • Operating model
  • Parent’s involvement in major decisions
  • Talent management, such as talent identification, selection and incentives.

When designing an organization’s innovation strategy, its strengths and weaknesses need be considered, and not just overall at the organizational level, but rather by examining the innovation characteristics throughout the organization, including exam leadership, strategy for innovation, capabilities and competences for adopting the best solutions. By analyzing +1,000 companies using InnoSurvey™, we have seen how organizations are not homogenous and how insights on their specific characteristics is essential to making the right design chooses.

Design decisions should be based on an external and internal analysis as well as on the initial plans for removing blockages and amplifying the strategic direction of the organization. Typically decisions are based on one of three approaches:

  1. Best Fit, where decisions are based on how the current situation looks and what’s possible without any major changes. Typically, these decisions are based on the current conscious strategy, leadership, type of innovation, and the capabilities and competences that need to be strengthened.
  2. Best in Class, where decisions are based on the best companies that have the same strategic intent you are aiming for. These recommendations focus on the changes needed in strategy, leadership, type of innovation, personas (the culture), capabilities and competences.
  3. Resource-based View, where decisions are based on the company’s current capabilities, personas and competences, focusing on what is realistically possible and how that can be aligned with the company’s existing overall strategic direction by elaborating the innovation strategy, leadership and type of innovation.

Organizational principles

When it comes to implementing an innovation centre, there are three typical possibilities, and the decision on which to apply should be made based on the organization’s strategic goal, design choice and an analysis of the internal and external context by using a defined strategy for outlining the recommendations related to one of the three approaches outlined above: Best Fit, Best in Class or Resource-based View. The three typical possibilities are:

  • as a central department
  • as a fully integrated unit within the existing organizational chart
  • as several collaborating satellites.

The innovation centre could also be implemented as a combination of all three of these choices. Each one has its pros and cons. The centralized model is efficient, but innovation often occurs in other parts of the business or in the marketplace. Integrated innovation is easier to implement in first horizon strategies, but very often hard or impossible to execute efficiently in second and third horizons due to daily prioritizations. Satellites are a mix of both and can be very efficient, but it can be hard to coordinate among them as they usually tend to be highly autonomous or allied with a specific part of the market or the organization.

Every organization must choose among these options based on its own horizon strategy, its industry and market, current level of innovation and other unique internal and external factors. However, after many years working with companies of all sizes in many different markets, we have found that innovation systems are often better implemented in small steps and not as a formal, full-blown initiative from day one.

My reflections on The Drucker Forum 2016

juni 20th, 2017 • Entrepreneurship, InnovationsKommentering avstängd

The 8th Drucker Forum was a milestone in many ways. It focused on the core of what will create the GDP of tomorrow and the actions to take – entrepreneurship and innovation. New GDP will not come from governments or from large corporations, even if they are an important part of a system necessary for growth, they’re not in the driver’s seat.

Many speakers, including myself, focused, discussed and elaborated upon the prerequisites for innovation and entrepreneurship as well as the lessons learned from the past. Clayton Christensen opened his speech by sharing his thoughts about data. He said that data is not created by God and it is not the truth, it is most likely to be found in hell, so he will not ask for data in the afterlife. Tim Brown from IDEO, continued the following day by saying that great scientists are bookkeepers and poets at the same time, something I would agree on and that it is also valid for entrepreneurs, innovators and great business leaders as well. A cross disciplinary mix of insights from human behaviors, creativity and curiosity with data from experiments and past experiences is a winning concept.

Generally I would say most people agreed that studying human behaviour (anthropology) and leading Horizon 1 (with spiral staircase leadership style) in parallel with and a more nurturing style in Horizon 2 (Caldron or Fertility Field) and explorative style in Horizon 3 is a way to mitigate risks and maximize growth.

Another interesting discussion was the one I had with Philip Kotler where we agreed, based on data and our experience, that innovation clearly drives market growth but not always profit. Innovation can drive profit but also hinder it. Profit comes from innovation and growth, but short-term it can hinder profit whilst misused innovation can lead to a lack of profit, potentially decline and bankruptcy. Innovation and entrepreneurship are most likely the most important aspects to address the grand challenges we face on earth creating a sustainable and healthy world for us, our children and future generations – and therefore this conference was a marker for the future.


Clip from Magnus Penker speech on Drucker Forum 2016