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Archive for the ‘Globalization’ Category

Davos Innovation Analysis: Will The Fourth Industrial Revolution lead to Households as employers?

fredag, januari 29th, 2016

The echo form the Davos meeting just begun… To quote Erik Brynjolfsson, Director of the MIT Initiative for the Digital Economy, “The idea that robots will take our jobs is the biggest misconception I’ve heard here at Davos.” Instead, he emphasized technology’s potential as a powerful tool. Or cite US Vice-President Joe Biden said “I believe, on balance, these transformations are changes for the good. But they come with real peril, and they require us to be proactive. For how will the warehouse worker who used to ship your order, or the salesman who used to take it, now make a living when he or she is no longer needed in that venture?”


 

We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.

Are we on the cusp of a Fourth Industrial Revolution? Most participants in Davos think so. And it’s unlike anything we’ve ever experienced: “As a society, we are entering uncharted territory,” Salesforce CEO Marc Benioff told participants on the last day of this year’s Annual Meeting.

The Fourth Industrial Revolution was  on all lips  in Davos, a good thing but let´s recap. The first three industrial revolutions were, in chronological order, the steam engine, electricity and electronics. The concept is connected to the Internet of Things, and provides that any product in the production chain can carry information about where and how, with the result that the factory is be able to organise itself. The goals are shorter adjustment and lead times, fewer errors, more flexibility and no time-consuming programming. Fourth Industrial Revolution is about the re-industrialisation of the Western world and it could be summarised as an extension of the possibility of connecting machines to other machines and ultimately an end-consumer somewhere in order to organise production in a smart way. At the same time, other possible future-interlinked trends taking place are:

  • The 3D printing revolution, where you print everything from spare parts for air crafts to industrial high-speed fans; bio-parts to full-scale cement houses; as well as consumer products, such as toys and food;
  • The omni-channel in retail and e-commerce, where consumers interact with brand owners, ultimately designing their own products and services using mobile technology for design and access, and brick-and-mortar as service points for training, service and upgrades/modifications. Another example is connected trucks interacting with the nearest service garage when it’s time for a service;
  • The security revolution, where old paradigms are challenged. Classic LAN and firewall architecture are on longer capable of protecting multi-channel connections. New threats require new architecture; and
  • The social revolution and global transparency, which have led to increased demand for fair training and a fair labour market but also sustainable thinking and rapid communication, where everybody with a story to tell can have an impact.

The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in mentioned fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.

Already, artificial intelligence is all around us, from early self-driving cars and drones to virtual assistants and software that translate or invest. Impressive progress has been made in AI in recent years, driven by exponential increases in computing power and by the availability of vast amounts of data, from software used to discover new drugs to algorithms used to predict our cultural interests. Digital fabrication technologies, meanwhile, are interacting with the biological world on a daily basis. Engineers, designers, and architects are combining computational design, additive manufacturing, materials engineering, and synthetic biology to pioneer a symbiosis between microorganisms, our bodies, the products we consume, and even the buildings we inhabit.

Challenges and opportunities

Like the revolutions that preceded it, the Fourth Industrial Revolution has the potential to raise global income levels and improve the quality of life for populations around the world. To date, those who have gained the most from it have been consumers able to afford and access the digital world; technology has made possible new products and services that increase the efficiency and pleasure of our personal lives. Ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, or playing a game—any of these can now be done remotely.

In the future, technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.

Moreover, technological innovation will also lead to more reuse and less waste of material and energy due to economical reasons and social demands.

At the same time, as the economists Erik Brynjolfsson and Andrew McAfee have pointed out, the revolution could yield greater inequality, particularly in its potential to disrupt labor markets. As automation substitutes for labour across the entire economy, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labor. On the other hand, it is also possible that the displacement of workers by technology will, in aggregate, result in a net increase in safe and rewarding jobs.

We cannot foresee at this point which scenario is likely to emerge, and history suggests that the outcome is likely to be some combination of the two. However, I am convinced of one thing—that in the future, talent, more than capital, will represent the critical factor of production. This will give rise to a job market increasingly segregated into “low-skill/low-pay” and “high-skill/high-pay” segments, which in turn will lead to an increase in social tensions. Discontent can also be fueled by the pervasiveness of digital technologies and the dynamics of information sharing typified by social media. More than 30 percent of the global population now uses social media platforms to connect, learn, and share information. In an ideal world, these interactions would provide an opportunity for cross-cultural understanding and cohesion. However, they can also create and propagate unrealistic expectations as to what constitutes success for an individual or a group, as well as offer opportunities for extreme ideas and ideologies to spread.

The impact on business

An underlying theme in general is that the acceleration of innovation and the velocity of disruption are hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed. Indeed, across all industries, there is clear evidence that the technologies that underpin the Fourth Industrial Revolution are having a major impact on businesses.

On the supply side, many industries are seeing the introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains. Disruption is also flowing from agile, innovative competitors who, thanks to access to global digital platforms for research, development, marketing, sales, and distribution, can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.

Major shifts on the demand side are also occurring, as growing transparency, consumer engagement, and new patterns of consumer behavior (increasingly built upon access to mobile networks and data) force companies to adapt the way they design, market, and deliver products and services.

A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the “sharing” or “on demand” economy. These technology platforms, rendered easy to use by the smartphone, convene people, assets, and data—thus creating entirely new ways of consuming goods and services in the process. In addition, they lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers. These new platform businesses are rapidly multiplying into many new services, ranging from laundry to shopping, from chores to parking, from massages to travel.

Household as employers is mot likely the place where we will see most innovations and most new jobs in the future, Magnus Penker CEO Innovation360 Group

On the whole, and according to the Davos Economic Forum, there are four main effects that the Fourth Industrial Revolution has on business—on Customer Expectations, on Product and Service enhancement, on Collaborative innovation, and on Organizational Appartamento, Rendering 3d progetto, interniforms. Whether consumers or businesses, customers are increasingly at the epicenter of the economy, which is all about improving how customers and  consumers are served. As a CEO you need to be able to cope and understand the there are four main effects in relation to other. The diagrams below, based on data from InnoSurvey, show how ready we are in some of the large industries and the conclusion is that household as employer is a very innovative trade and someplace where we most likely will see new jobs of the future. Moreover, we can clearly see that non of the industries are really ready for radical change and disruption and all are more or less lacking of the customer capabilities. Interesting is also how Mining is more innovative industry than Manufacturing and Finance – we can clearly be better prepared and trained for the future and we will most likely see new type of jobs that was not in the focus of the Davos World Economic Forum – the households and the micro economy which in it turn are end consumers driving demand for other industries.

InnoSurvey Analysis of Aspects

Global data snap-shot from InnoSurvey™ describing the four areas pointed ot by Davos as critical. Households as employer (followed by mining) seems to be more ready for appointed aspects than Finance, Manufacturing and Retail which also seems logical as we see a market increasingly segregated into “low-skill/low-pay” and “high-skill/high-pay” segments. 

InnoSurvey Analysis of Strategy

Global data snap-shot from InnoSurvey™. Below 3 means not innovating incremental/radical.  The investigated trades are incremental and not ready for disruption. If Household as employer (and firms organising for household services) will apply radical innovation and disruptive technology we will most likely see new well paid jobs here. 

Four disruptive threats to Nordic businesses: And how to meet them through innovating

torsdag, oktober 1st, 2015

We are probably in the middle of the biggest disruptive change in the market since industrialization. The market structure, its nature and the key success factors are undergoing a shift where hypercompetition is putting many of today’s businesses at risk of exclusion from the market. The main causes are increasingly rapid digitization and automation at a time of record low interest rates and more venture capital being available than ever before. And this is happening on a global level.

The external environment creates new conditions that all organizations must address. If companies in the Nordic market do not alter their business models fundamentally, there is a risk that Swedish Innovation miracle (on the Nordic Market) might just become an innovation mayfly. At the same time, for those entrepreneurs who succeed in acting according to the new conditions and who can take advantage of the opportunities, this creates new positions and the ability to achieve success at a pace never seen before.

Happily, there are specific steps that can be taken by those who are threatened by these market changes. The measures we outline below have proven to be successful in real situations with real businesses. However, the measures require some courage, self-awareness and, above all, knowledge. We recognize four distinct scenarios in the Nordic (and European) market which even established companies have fallen into and which have even destroyed businesses and are a real threat to yours if you have fallen into any of the scenarios: ”Analysis paralysis”, ”Booby trapped”, ”No pain, no gain” and ”Too little – too late”.

#1 Analysis paralysis

Many companies find it difficult to generate sufficient and sustainable ideas. Either they find too few ideas or they have the wrong ideas, or, in the worst case, they do a combination of the two. We call this the “Analysis Paralysis” scenario.

#2 Booby trapped

Many companies are stuck with a legacy of fossilized architectures and all that entails, including the need for extensive maintenance and problems with development to keep up with changing markets. Often engineering-talented companies have invested in customized solutions, a development that is reflected for example in Industry 4.0 in Germany and user-generated manufacturing in USA. This trend has led to a situation where the management is either non-existent (chaos) or overly bureaucratic (cement). Both cases may allow rapid improvements to be made, with the potential for high profitability and effective aftersales, to meet new competition. However, in both scenarios companies are seemingly able to innovate rapidly but at the cost of maintaining its products and solutions, due to their expensive legacy architecture (for overmanaged and bureaucratic firms) or due to aftermarket with maintenance issues (for the chaotic unmanaged firms) means that they are unable to obtain full product/service value over time, despite being quick to market.

#3 No pain, no gain

Many companies have business models that no longer work. However, not continuously innovating and/or developing their business models may be a decisive mistake when competitors are faster to act and e.g. maximize the application of new business models of the sharing economy, such as crowdsourcing, crowdfunding and subscription-based models. Uber, the App Store, Dropbox and Spotify are just some examples of new “sharing-based” business models. Basically, this scenario is about understanding the customers’ ”pain” and ”gain” – what do the customers actually want and how are they prepared to pay?

#4 Too little – too late

Many companies feel that they are late to the market. They may be knocked out of the market by new models. For example, nowadays, a global network of actors based on semi-finished products from several distinct steps can create an equivalent value by offering lower prices with attractive business models focused on specific activities or lean start-ups with plenty of venture capital prior to the market when opportunities begin to open up. Typical examples that were caught out and came late to the market include Kodak, which was late to move towards digital photography, the established auto industry, which was too slow to develop electric cars, and energy companies, who were slow to see that consumers could start to produce and sell their own electricity into the grid.

Four ways of using innovation to solve the issues gong for success

Analysis paralysis – to stick or move ahead?

What is it that would make a plant employee with a monotonous job (often performed for many years without any improvement in working practice) go home and seek out or create innovative solutions in areas not related to their work employment, for example building their own electric car or making their homes climate-smart? Or what would make an employee start a new smart app-based service outside of their work area? Or the teacher who suddenly starts their own business? How and why do people make these changes away from their work environment instead of changing and creating ideas in the activities in which they are active at work?

People are often full of new ideas in the areas they are interested in. So, why are businesses so bad at channelling this creativity towards their own business operations?

A natural answer is of course is that some people naturally have the desire to make something on their own, but beyond that, perhaps the most common cause is that in the place of employment, maybe there is no destination for new ideas. This also applies to new ideas from customers or suppliers. When organizations are overconfident, there is a risk that they may stagnate, which ultimately creates a paralyzed situation, where the flow of ideas completely ceases, first as people may feel the company is not responsive to receiving ideas and then as they lose the will to offer ideas in such a negative ideas culture.

To address this, business structure, culture and leadership are some key elements to help identify, encourage, uncover and structure ideas. The ideas are out there in the real world, not behind a desk.

Also, in a typical life cycle of a company with a stable market position, they often reach a point where management’s gaze turns inwards, and becomes focused, even fixated, on efficiency and consolidation. In effect, consolidating the status quo becomes more important than innovating and renewing for the future.

One solution to overcoming this is to insert simple and proven methods of ”ideation scouting”, ”ideation hunting ”and field observations into the business strategy. There are tools available that can help companies collect, illustrate and visualize ideas and solutions in a structured way, so that they then can be rapidly developed further, tested and ultimately discarded or launched as a new product or service.

Practical experience shows that these methods also lead to increased efficiency, a reduced need for write-downs and a shorter time-to-market. To succeed, companies need greater crisis awareness, the right skills and tools, and a clear plan with definite milestones. Then, they can escape from their analysis paralysis.

Booby trapped – Locked away in the market preferences or out-of-the-box thinking?

Customization and specialization have long been important success factors in businesses in the western world. Covering everything from cars to houses, to equipment and to IT-systems; these have been the typical responses to compete against production from low-cost countries.

New technologies such as 3D printers and connected factories have reinforced this trend, particularly in the manufacturing industry.

The demands on platform thinking in everything from design and construction to operation has placed growing demands on the need for flexibility, which in turn has led to the trend for flexibility, rather than the traditional approach of customization and specialization. For instance, now modular development, scalable and flexible architecture and smart hybrid solutions where, for example 3D printers are used produce some special components (e.g. mounts, mountings, fittings) are now beginning to emerge.

However, a company specially producing services and products often suffers from architectural problems, which may make it more difficult to scale up volumes and can lead to higher costs for operating and maintenance, which ultimately ties up working capital.

The solution is an innovation process that shortens the time from prototype to launch. This requires an ability to build in more flexibility in architectures, product-lifecycle management, platform and modular design, engineering, production and operation.

Companies cannot afford to be locked in rigid architectures over time, as this can create obstacles for taking advantage of new business opportunities. While maximizing cash flow from existing platforms, companies need to be working on the next-generation architectures and the generation after that.

A framework that is often used in architectural development is the ”Three Horizon Model”, where companies work on three architectural levels simultaneously: today with existing cash, the future with flexible production, as well as the next level that will next take over. The key is to maximize what you have today without being locked out of the market.

No pain, no gain – Understanding the driving success factors of your market

Understanding a client’s real motive is the key to also understanding how the business model can be developed further.

One known example of selling what customers want is reflected in a quote from Black & Decker’s CEO: ”Last year, one million quarter-inch drills were sold. Note, this was not because people wanted quarterback inch drills but because they wanted quarter-inch holes”. With the realization that there are holes that the company can sell for, the company asked itself, can drill machines be adapted to the different contexts in which clients need these holes as well as for the amount of holes which customers need?

Some models of drills may be slightly easier and cheaper, but are fit-for-purpose as long as they do the job. Others may be of higher quality and more durable, so they can be rented out as may be only sporadic needed for holes.

However, this further improves the dynamic between buyers and sellers, and is another example of today’s diversity of channels and formats to deliver. Consumers are now helping to develop, finance and produce value offerings. In the digital world, channels are being developed by consumers with each other as never before. The sharing economy now gives the established players competition that they could not have imagined just a decade ago.

Therefore, constantly innovating your business model and your offerings is an essential success factor in today’s markets. A strategic continuous innovation of your business model should be based on what you do best (sometimes called your operational DNA) and matched against what your customers most want. And how much this is worth to them!

Static models, a lack of strategic direction, a poor understanding of customers’ dominant motifs and altered behaviours coupled with not understanding their own strengths in depth have led to the demise of probably more companies than the worst recession has ever done.

However, there are several toolkits to help innovate business models, and that can help capture customer needs, design the value proposition and map the actors involved in production and delivery.

Too little, too late – Move faster, sooner

Not to come out on time with new offerings is one of the most common reasons that companies slowly lose value and are eventually knocked out of the market. Typical causes are sluggish internal bureaucracy, lack of runways for innovation, an absence of an external innovative context to work in and a naive approach to the way markets are changing.

Companies that find themselves in such impasses often address it by adopting new business models based on a fast-moving value network of suppliers. Not only are these competitors faster to market when new demand arises, they can also squeeze prices and short-term test different variations of business models.

New value networks, combined with new production techniques can affect the time-to-market radically. Today, for example, it is possible to build a satellite (excluding the launching mechanism) for only US$ 10,000, which is many times cheaper than even a few years ago. This is a consequence of the finished components, specialized industrial clusters and a globalized market.

Future innovation processes are not about doing everything yourself behind locked behind doors, but rather about participating in open platforms in which many players interact. Customers and partners can develop products and services faster, along with the customer prototyping all the ideas and delivery formats into actual products and services.

In this diverse market climate, a stable vision reference point is increasingly important. This is also important in order to “choose the right balls” and then to focus all effort on them instead of randomly kicking the balls that arise in the hope that some of them might go into the net. However, this is only possible with a well thought-out process of innovation.

To implement a structured innovation process that captures and rewards diversity of ideas externally and internally, and then quickly and efficiently boils down the essence and commercially chooses the right idea to quickly take to market is the key to success.

A rapid speed to market is achieved today by utilizing proprietary systems and other benefits so as not to have to invent a new ecosystem and value networks for delivery or worse still, to avoid launching new products without ecosystems and value networks (i.e. no internal runways or external infrastructure, such as service, training, inventory, availability and knowledge).

Demand for competence and capability development on the Swedish and Nordic Market

For an organization to take on innovation seriously, it needs to define its strategy for innovation and the kind of innovation it intends to work with and, not least, ensure that the right ‘innovation capabilities ”are in place.

According to studies conducted by Innovation 360 Group, there are 67 well-defined innovation abilities, which through extensive data collection are utilized as the foundation for the framework included in the method InnoSurvey ™.

The spider graph below compares 16 overall aspects (groupings of innovation cabilities) between the Swedish and North American ”top innovators” who tackled the four main challenges described above. The chart can be seen as an overall picture of the areas of focus to meet the challenges described (in Sweden and according to our data as well on the Nordic Market).

spider

Below are the main innovation capabilities that companies in North America have used in successfully managing to face the four threats described above (which ultimately are about disruption), according to the Innovation 360 Group database. This is something that can be directly used by Swedish and Nordic companies in international competition with North American companies that may have a little stronger capacity for innovation, but that have the same basic profile regarding their innovation efforts.

innovation capabilities

Development for the Nordic market

Expertise in innovation capability can obviously be acquired in a variety of ways:

  • Recruit expertise with prior experience;
  • Bring in outside consultants into teams;
  • Educate employees.

Contrary to many myths, innovation capability is less dependent on talent and is more about acquired skills and experience. Here, interest and commitment, combined with knowledge of the processes and tools are critical success factors.

However, innovation is not well trained for in the Nordic market, particularly in higher education courses for working professionals. Therefore, Innovation 360 Group and the Computer Association have initiated the training #InnovateSweden, a four-day course that addresses the basic tools and also allows participants to apply them to their own business. You are welcome to participate in #InnovateSweden – our contribution to a more successful Nordic market, read more at http://www.dfkompetens.se/utbildning/innovatesweden. You can also join the information event the 5th of October, read more here.

 


The #InnovateSweden movie (Swedish only)

Published by
Magnus Penker, CEO and co-founder Innovation 360 Group
Christer Berg, Swedish Computer Association for Competence Development

 

Industry 4.0 – disruption or just a logic extension of WWW?

lördag, augusti 1st, 2015

Industry 4.0 is the name of the German government’s strategy for the fourth industrial revolution. The goal is the creation of smart factories, where all production is connected. The term first surfaced at the Hannover Messe Industrial Fair in 2011, with the theme Industry 4.0. The first three industrial revolutions were, in chronological order, the steam engine, electricity and electronics. The concept is connected to the Internet of Things, and provides that any product in the production chain can carry information about where and how, with the result that the factory is be able to organise itself. The goals are shorter adjustment and lead times, fewer errors, more flexibility and no time-consuming programming. Industry 4.0 is considered to be the impetus for the re-industrialisation of the Western world.

It could be summarised as an extension of the possibility of connecting machines to other machines and ultimately an end-consumer somewhere in order to organise production in a smart way.

  • At the same time, other possible future-interlinked trends taking place are:
    The 3D printing revolution, where you print everything from spare parts for air crafts to industrial high-speed fans; bio-parts to full-scale cement houses; as well as consumer products, such as toys and food;
  • The omni-channel in retail and e-commerce, where consumers interact with brand owners, ultimately designing their own products and services using mobile technology for design and access, and brick-and-mortar as service points for training, service and upgrades/modifications. Another example is connected trucks interacting with the nearest service garage when it’s time for a service;
    The security revolution, where old paradigms are challenged. Classic LAN and firewall architecture are on longer capable of protecting multi-channel connections. New threats require new architecture; and
  • The social revolution and global transparency, which have led to increased demand for fair training and a fair labour market but also sustainable thinking and rapid communication, where everybody with a story to tell can have an impact.

So, how do the trends above link to Industry 4.0? Well, in many ways. The possible disruption is not about optimisation of manufacturing or even customising your product; the disruption is about being able to put together, at the speed of light, exciting hard and software (including services) using 3D printing and flexible online-connected manufacturing for producing adaptors, handles, missing parts as well as digitalisation (to write or rewrite software) and taking new innovations to the market:

  • for a fraction of the price (e.g., you can build you own satellite for less than 10,000 USD);
  • with extremely short go-to-market lead times (weeks); and
  • with A and B testing for maximum innovation diffusion.

Ultimately Industry 4.0 will create new echo systems, interlinking consumers to manufactures and innovators all over the globe, increasing the speed and diffusion of good and services substantially.

However, there are also pitfalls. Customising without considering platform thinking, product lifetime management and the aftermarket will erode all possibility of future profit. Supply management and logistics will benefit from the low stock volumes and high stock turnover, but maintenance, training, support and quality assurance in the aftermarket (which is, in many cases, 80 per cent of the total business) will suffer from bad structure and inefficiency. Manufacturing is always more efficient when optimised for a certain range of products and services, meaning that totally flexible production will always be less efficient.

In the aftermarket, increased complexity will lead to QA issues, so it is our view that the road ahead can be flexible and customised but in a structured way with:

  1. A well-defined innovation process from ideation, prototyping to development and commercialisation (diffusion).
  2. Structured platform thinking and architecture, with product lifecycle management implemented, from design, construction and production to the aftermarket, as well as recycling.
  3. An echo system with engaged open communities of suppliers, partners, producers and universities and industry standardisation committees.
  4. A well-defined system and business architecture for secure and easy interaction: from e-commerce to designing and controlling your own production as customer to interlinked suppliers and vendors of products and services all over the globe.
  5. Constant learning, using AI technology to adopt and learn in real time. Some things will go right, others will not; sometimes for no obvious reason.

How increased interest open opportunities for countries like Sweden

lördag, mars 12th, 2011

At the moment many Swedish manufacture plants are bought by BRIC players which are an interesting phenomenon as the interest is increasing meaning that there are reasons beyond low interest here. Historically European countries like Sweden has had a low interest which has lead to investments in automated manufacturing plants competitive with labor intensive manufacturer in the BRIC area, we can find examples like Flextronics. However, in recently bought manufacturing plants it is different. Indian Bahra Forge bought Kilsta plants in Karlskoga, Sweden to manufacture crankshafts, Suzuki Metal bought wire manufacturer Garphyttan and Indian Kemwell bought two pharmaceutical factories in Uppsala. Why?

It seems like access to raw material, skilled operators, localizations as well as sustainability and environmental issues play a role here. Taking a financially point of view it seems like the interest gap between west European countries and the BRIC region plays a important part in the managerial decision making process as high tech plants cannot be replaced with low cost labors in BRIC, nether access to raw material, leading to comparative advantages in relative lower interest (even if it is increasing in absolute terms), skilled operators, knowledge workers as well as local and secured access  to raw material in a stable region.

How can we use the comparative advantage as a west European nation? First of all, we can compete on the global market with high tech production, skilled operators and industrial knowledge workers. Internally within the EU market there is an opportunity for entrepreneurs here; Supply and development of global talents, training, R&D, as well as building and developing infrastructure.

The new generation of PR

lördag, januari 15th, 2011

PR has, generally spoken, changed over time and become more complex as the possibilities of interacting and building relations has exponential increased over time. Old truth might still be truth but often simplified approaches not possible to apply other than as isolated events.

Today building relationship impacting specific target groups is a holistic challenge, not a isolated task. All stakeholders have to be mapped, outlined, and analyzed based on previous actions, current beliefs and values and future expectations. Due to Internet and a flattened world the speed and number of possible point of connections has dramatically increased and continue to increase meaning that PR become a complex discipline whereas relations, primary and secondary stakeholders interest, power, urgency and legitimacy has to be understood over time, not as a snap shot. Transparency, social and environmental issues are also interlinked in all analysis today – as most people see responsibility as a prerequisite doing business.

As PR become more complex, faster, as well as integrated, holistic approaches as well as dynamic tools is required doing a good job. One of the recently awarded PR blogger having this approach is Doktor Spinn, have a look at his blog http://www.doktorspinn.se/

Michael E. Porter sends CSR back to the stoneage – now it is time for real entrepreneurship…

söndag, januari 9th, 2011

Michael E. Porter Harvard University professor, explains in an new video post, why business leaders must focus on shared value – creating products and services that benefit not only the company but also society. Or as like to put it, make the pie bigger… Responsible and smart entrepreneurs understand to create value through actions beneficial for all, without a working society and environment there is not much business to do. It is time for a new definition of CSR who has been focused on the wrong ideas instead of seeing the real rational behind a sustainable world the focus has been doing good without understanding why – a lose cannon without a captain. No good out of that… See the movie and enter a new dimension of why to do good, how to do it, and what it will lead to.Click on the picture to see the video post cast from Harvard  Business Review…

Enter the O-Desk, next level of entrepreneurship

fredag, januari 7th, 2011

Today I will share a recent happening but before that some words about trust. Trust can be one-dimensional, two-dimensional or transformational meaning that ether you have trust or not in your business partners (one-dimensional) or you can have both trust and distrust at the same time (two-dimensional) and an evolving trust, the transformational trust theory, meaning that trust is build up in three steps:

  1. Calculating whether do to business or not with a person or an organization
  2. Developing knowledge about your business associate
  3. Developing mutual identification

Recently I used odesk.com (the world’s leading network for freelancers, very competitive pricing) to find skilled people for a project. We applied game theory by asking +20 people giving them a chance to do a micro-delivery before selecting three of them going further with the larger project. The same project, the same task. This way we mitigated the risks, reduced the costs (even if three person did the same job) and finally increased the capacity being able to scale up with higher speed. At the first thoughts  it seemed crazy to ask three people to do the exactly same task. However, this way we

  1. could in a secure way select the right people (without knowing them, taking references or even being sure who they were)
  2. do it faster (quicker to find and start up than other free lancers) with less risk of delays or bad quality (=game theory applied on development)
  3. deliver cheaper than if it was made locally in-house or by sub contractors or freelancers

Basically what we did was to add game theory to the existing trust theories – meaning:

  1. Instead of only play with safe cards, take a chance of finding new possibilities on the global arena. Skilled and motivated people in other parts of the world, ready to take chance.
  2. Make it in small portions with redundancies (three persons doing the same task) to mitigate the risks (= give the same small task to several people in the same time. Still cheaper since the fees are approx 10% of equivalent local services)
  3. Evaluate, motivate, build trust and relationship
  4. Build common a ground and eventually identity

By the way, ODesk freelancers actually get better paid that if you go through offshoring companies paying less salary (classical offshoring companies cut approx 70-80% of the fee, while ODesk take 10%). Moreover the freelancers constantly get ranked by their clients building the freelancers reputation and brand towards better assignments and finally increased compensations still profitable for all involved.

The Indian IT wonder has become an old dinosaur – giving new entrepreneurial possibilities

söndag, september 19th, 2010

Having invested in, worked with, sold and project lead Indian IT projects, I can state that Offshoring is here to stay. But not in the hands of Indian large companies, and nether to be used as a strategic tool by waver European business leaders.

De Jure, outsourcing and offshoring, is about creating a flexible organization in terms of capabilities and knowledge, but it has been perceived by many buyers and seller as low cost labor. Indian IT Companies has had 40-60% profit now being challenged by Chinese companies pushing the margins by offering even lower prices and more talented staff. Generally spoken, Indian IT companies have not made their homework; they are now on a commodity market moving from oligopolistic characteristics towards monoploistic competition, not being differentiated through earlier R&D and innovation work, leading to diminishing margins and at the end not being able to sell large volumes due to too high labor cost compared with other emerging markets.

De Facto, offshoring and outsourcing is increasing and it is driven by global supply and differentiation. Services like www.odesk.com where global talents offering their services for a 1/5 of the Indian price list, with high degree of transparency and direct connections with the producers, are changing the industry value chain cutting the middle man in Europe as well as in India and China. The new kind of values chain establishing is build upon personal trust, transparency and reputation on micro level serving as the building blocks of new networks acting as global player. This new network of global talents, in conjunction with established and innovative flexible companies, are lean and mean organization moving fast using cloud technologies as their ecosystem challenging the thinking of large monolithic systems with ton of ITL documents.

At the end of the day, the Indian dinosaur has been challenged by its own people and the people of the non-triad countries cutting the industry value creating and striving for more flexibility, lower prices, more trust and more social responsibility.  Most likely, in the direction of the tangent, we will see clusters raising up around the world, geographical or virtual, creating comparative advantaged on the global market through innovation work, R&D, skills and knowledge but also, and maybe most important, through reputation and trust.

The only we know is that we are uncertain about the future

lördag, augusti 28th, 2010

Are we facing a boom, a double dip, or a potential break-down of the global environment? No one can know for sure? The degree of uncertainty is higher than for a long time. We probable has to go back as far as the industry revolution to experience the same degree of uncertainty. Can we learn from history? Yes, but there are also differences making the assumptions and risk mitigation harder and less likely to be based on past experience. A connected world, 3 billion people demanding same level of standard as the Triad regions in terms of consumptions, energy, and experience and education, have changed the fundamentals of our world system. It is faster, less predictable, scared resources except from brain power which has an increased supply.

What now? Should we believe in faith or actively taking control over our situation as entrepreneurs, investors or as employed?

A strong tool for handling uncertainty is scenarios planning – which is a way of painting possible future scenarios comparing and contrasting possible strategic decisions towards. Several of the world leading experts in scenario planning are working for Shell, who also publishing their results/scenarios in publicum. For inspiration, have a look at their work with Shell’s new world scenario recently published on their site.

A method for identifying, elaborating and describing scenarios (based on Wikipedia http://en.wikipedia.org/wiki/Scenario_planning) can be outlined in 13 steps:

  1. Decide on the key question to be answered by the analysis
  2. Set the time and scope of the analysis
  3. Identify major stakeholders
  4. Map basic trends and driving forces
  5. Find key uncertainties
  6. Check for the possibility to group the linked forces into two
  7. Identify the extremes of the possible outcomes of the (two) driving forces and check the dimensions for consistency and plausibility.
  8. Define the scenarios, plotting them on a grid if possible.
  9. Describe the scenarios in text, choice powerful names
  10. Assess the scenarios. Are they relevant for the goal? Are they internally consistent? Are they archetypical? Do they represent relatively stable outcome situations?
  11. Identify research needs
  12. Interate
  13. Use scenarios ion your strategic decision making process

Is the Indian IT miracle over?

lördag, augusti 14th, 2010

Driving back and forth to you job in Munbai is like smoking a packaged of cigarettes, and nothing become better. Indian government spend 17 dollar per capita and year in infrastructure while China spend 116 dollar. The Indian mentality is pretty much having a back-up plan for the back-up plan while China is straighter forward, which both impact business life as well as infrastructure and the sociality in general. In an interview, published in CIO.com, we could read the other day that a director from AT Kearney’s predict that Most Indian providers will be sidelined or subsumed while the fate of seemingly stalwart U.S. players will hang in the balance.

At the end of the day it will be about innovations and disruptive technologies, like Scott Anthorny writes on his Harvard Business review blog yesterday; The ease with which a company’s core business grows can mask the need to invest in innovation. Growth inevitably slows. Indian companies should be investing in innovation now, even though they appear not to need it. If they don’t, they will ironically leave themselves open to disruption from Western companies who find disruptive ways to compete domestically.

The winner of the global war for wealth will be the most innovative companies in the most well structured and supportive environment, the long term moment of the winner will most likly be:

bureaucracy and corruption => transparency

too low tax and quick fix => sustainability in environment

cost cutting => innovation

transaction => relation