Magnus Penker

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.

It is a lot of focus on Talent Management at the moment, and if you ask me it is possible the most important source of success in a globalized world full of possibilities and treats. Today the world is highly competitive, less borders and super-fast mechanisms for transmissions of best practice, knowledge and competences. Innovation and sourcing of skills, knowledge, capabilities and financial funding are the corner stones in today’s world.

As up today Talent Management has been pretty much driving the process of attracting, retaining, develop and transitioning (next move including exit and alumni) human capital. However, by linkage Talent Management to reputation management and Raison d’être the four-phase-model of Talent Management can be the most powerful weapon existing in today’s business eco system:

1. Attract: Build the Employer Brand and link it to Raison d’être, trust, shared values and transparence as well as balance in effort and benefits. Make sure you never break the brand promise anywhere in the chain of brands (firm, employer, products)
2. Retain: Secure that all employees are treated fair, understand the rules, feel a balance in what they give up and get (the equity theory), as well as consistent communication and messages to all people in the organization. Make sure there are a clear link the performance management and reward strategies as well as acting in accordance with the over-all brand promises and communicated values.
3. Develop: Constantly coach for result, skills, capabilities, knowledge and personal development. Plan the next step, short term and long term. Support and coach for stating personal missions and visions and how they are aliened and supported by the firms riason d’tere.
4. Transition: Suppport and plan for your peoples work-life; short/long term goals, internally/externally. The relations internally as well as externally are what is building up your total brand equity, or in other words the potential future cash flow.

The Talent Market (Recruitment Market + Internal Market) is two out of six markets and shall be as much interlinked into all business decisions as the other markets (Customer Market, Influence Market, Referral market, Supplier Market)

There are several new and fresh consultancy companies growing up around this new mega trend, as well as a bunch of old recruitment and staffing companies trying to transform themselves with mixed success. One of the most progressive and newly started consultancy agency I have found on the Scandinavian market is Area Of Excellence, definitely worth a visit (www.aoex.se)

The most trendy right seems to be innovation. Companies such as Apple, Facebook, and Google has created a wave of management literature, lectures and theories that will help others to think as creatively.

Innovation has long been recognized as key to getting businesses to achieve success. Innovation creates new markets and opportunities for improvement. In a study by the McKinsey Global 84 percent of business leader’s states that innovation is extremely important for the company’s growth strategy. Innovation as a keyword in the book titles at amazon.com gives over 40,000 hits. It says a lot about the trend that prevails. Even in Sweden, the trend has taken root. Apple founder Steve Jobs says that innovation happens when you hire a sufficient number of smart and innovative people. Something that many Swedish companies have focused on and the result is a growing demand for entrepreneurial and creative innovators…

Maybe we see a new paradigm shift as company previously saw technology as the major driving force for innovation has now been given a more outside-in perspective. A market driven perspective. One can see that innovation is seen as a strategic way to change the market structures, creating barriers for competitors and change the maturity of a product. Innovation can, by making improvements, create new competitive advantages over competitors. To offer something better than it already on the market is a way to temporarily increase the market share. A revolutionary innovation captures market share from other companies more permanence, such as when Apple introduced the iPhone. An innovation may also create barriers for competitors, by being too difficult to imitate or copy. In the end it’s about differentiate itself from its competitors. And if all this is true, it requires companies to be more open and based on customers insights when they develop new ideas, hiring people and develop them self’s.

Also read my and Maria Sporre’s trend-watch about the subject on http://www.dfkompetens.se/trendspaning/veckans-entreprenorskap/2010-12-10_innovation/index.xml

When it comes to innovation, Apple CEO Steve Jobs is legendary. His company slogan ”Think Different” is more than a marketing tool. It’s a way of life–a powerful, positive, game-changing approach to innovation that anyone can apply to any field of endeavor. In his acclaimed bestseller The Presentation Secrets of Steve Jobs author Carmine Gallo laid out a simple step-by-step program of powerful tools and proven techniques inspired by Steve Jobs’s legendary presentations.

Now, he shares the Apple CEO’s most famous, most original, and most effective strategies for sparking true creativity–and real innovation–in any workplace in the new book The Innovation Secrets of Steve Jobs Insanely Different Principles for Breakthrough Success. The seven basic principles of innovation according to Carmine Gallo, inspired by the master himself are:

1. Do What You Love.Think differently about your career.
2. Put a Dent in the Universe.Think differently about your vision.
3. Kick Start Your Brain.Think differently about how you think.
4. Sell Dreams, Not Products.Think differently about your customers.
5. Say No to 1,000 Things.Think differently about design.
6. Create Insanely Great Experiences.Think differently about your brand experience.
7. Master the Message.Think differently about your story.

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

In a new report from McKinsey they point out that leaders will be biased by their gut feelings and due to that they have to be able to judge the impact of the gut feelings. The technique suggested is to answer following questions and adjust the decision process after the answers:

1. The familiarity test: Have we frequently experienced identical or similar situations? This ca be very helpful, but also misleading. If we have plenty of appropriate memories to scan, our judgment is likely to be sound; chess masters can make good chess moves in as few as six seconds. But there are also several examples of bad decisions made based upon earlier experience. Just look at all rejected inventions in the past or crazy statements made like Bill Gate saying 640K will be enough memory in a PC.
2. The feedback test: Did we get reliable feedback in past situations? If we did it will be very helpful in the future decision making, otherwise it will be a joker.
3. The measured-emotions test: Are the emotions we have experienced in similar or related situations measured? Emotion tags are very powerful and might some time blind us from seeing the truth.
4. The independence test: Are we likely to be influenced by any inappropriate personal interests or attachments? As an example, when a group of auditors was asked to demonstrate to a Harvard professor that their professional training enabled them to be objective in arriving at an audit opinion, regardless of the nature of the relationship they had with a company, they demonstrated the opposite.

Now, how is it with entrepreneurship and driving form paradigm shifts or disruptive technologies? It’s a tricky question. Familiarity will most likely hinder you from seeing things with new eyes, discovering new patterns and possibilities. Feedback is of course good and healthy, but the most breaking inventions have fails many times before succeeded. Most likely you will be emotionally attached, which can be good or very bad. Will you be independent, no never which also might be a problem because you really want your idea to fly. My advice is; go for your instinct but do the acid test with the McK four questions to unpack the hidden driving forces.

As you might recall many of my blog posts are about differentiation, localisation, and innovations. These are the key tools of success in the future where the global playing field has doubled in size and probably even more on creativity and knowledge due to all earlier people locked out now fighting for a place in sun.

Being able to innovate you need a deeply understanding of sourcing and localization as well as being able to link it to tour differentiation strategy. However, innovating is not an easy task, but imperative for success. I have complied a very tangible 10 step latter to improve your innovation capabilities. Have fun, and let my know how it works for you.

1. Collect your management team
2. Point out that it is imperative that you start to innovate to differentiate, provide fails and success cases. Start a debate about why only certain people drive the innovations.
3. Get accept that only a few people innovate
4. Get accept that very few innovations cases are bring measurable impact on bottom line results
5. Ask how much’s this cost (potential losses or actual losses) in Euros, or any currency
6. Get a commitment that this is not good
7. Challenge your team, ask them to beat you and all the high performing innovators. Put a well defined goal to reach and a way of measly it
8. Put up a very basic process on the wall: Strategy, Ideation, Feasibility, Capability, Launch. Kill all ideas that not move forward in the process
9. Write on the wall every day and under each step
10. Get together every week and coach you team with following structure
    1. Good news
    2. Progress, appreciate your team
    3. Critical factors that are not working and hindering you and your teams progress
    4. Actions to be taken
    5. Priorities and goal for next week

Sam Palmisano, CEO IBM, recently said “If you do what everyone else does, you have a low-margin business. That’s not where you want to be”. Innovation is the wheel on creating differentiation and long term value, but is not just something that can be added, it is integrated part of the learning, the culture, the processes and the relation capital of a company. However how smart you are, how well structured you are, is does not help if you are not creative. Creativity can be trained but are also inherited.  That creativity and mental illness are interrelated is an old truth – Aristotle already supposed to have said ”no genius without a degree of madness”, and  now new research at the Karolinska Institute in Stockholm found a biological link between creativity and schizophrenia. Conclusions?

Fullt drag på mobilmässn i Barcelona, alla hyllar Google. Med sin mobilplattform har de tagit steget in i telecom världen. Men vad är nästa steg för Google, telefonerna lär bara vara ett sätt att säkra infrastruturen och integrera framåt för att vara närmare sina kunder. Eric Scmidt hyllade Amazon och Spotify i sitt tal igår på mobilmässan just därför tjänsterna är det viktiga, inte plattformen eller infrastrukturen (när den väl finns förståss).

Jag tror att ett CRM-verktyg för Google Apps är nästa killer app. Ingen CRM leverantör har fullt ut lyckats integrera sig mot Exchange – inte ens Micsrosofts egna CRM system! Helt webbaserat, gratis till viss nivå och sömlöst i Google apps inklusiva mail, doukment, kontakter, kalender och site-strukturen toppat med Waves. Det kommer sänka världens CRM leverantörer och bli steget in för Google i affärssystemsvärlden med molnifierade virtuella lösningar som är sömlösa och besvärsfria. Det är nästa shift happens.

Om vi börjar med den basala frågan vad är värde? Det är inte självklart, det kan vara pengar men det kan också vara funktionellt värde, symboliskt värde eller upplevelsevärde. Sedan kommer frågan, värde för vem? För kunden? Ägaren? Medarbetaren? Det kan vara samma värde för alla men behöver inte vara det. Värderesonemang kokar nästan alltid ned till innovationer och kundinteraktion. Att gå bortom det uppenbara, direkt in i kärnan av våra ehov. En formel för värde är just skillnaden mellan upplevt behov och uppoffring. 

Om jag verkligen vill ha ett behov tillfredställt finns en uppoffring på något sätt, i pengar, tid, prestige eller något annat. Om att tillfredställa behovet överstiger uppoffringen kommer jag att göra det och det skapar ett värde, symboliskt, funktionellt, upplevelsemässigt eller monetärt i pengar. Det som styr alla dessa gap är just kundinteraktion över tid samt innovationsprocessen. Produktionsprocessen är idag inget konkurrensmedel i Sverige, det kan nästan alltid göras någon annanstans såväl billigare, snabbare och bättre. Däremot leveransprocessen, den är central. Hur jag upplever bemötandet. Idag talar man om att matcha köpprocessen och säljprocessen, att de skall gå hand i hand över hela livscykeln. Jag kommer återkomma till detta i senare blogginlägg. Den andra delen är just innovationsdelen. Att erbjuda en möjlighet att tillfredsställa grundläggande behov på bästa möjliga sätt.

Innovationsprocessen är ingen slump eller galen uppfinnare som sitter i ett hörn och pysslar, nej det är en mycket välstrukturerad process. Grunden är att skapa utrymme och smala data, allt från fokusgrupper till undersökningar och omvärldsbevakning. Att systematiskt testa de bästa idéerna i en go-kill process och säkra framskridandet i milstolpar. Men idéer förs inte bara extern, oftast internt och samverkan och strukturkapital är centrala delar i processen, så även koppling till sälj och marknadsprocessen för informationshämtning.

Ett bolag som helt misslyckats med sin innovationsprocess och att matcha sin säljprocess mot kundernas köpprocess är SAAB Automobil. SAAB har fokuserat på innovationer men drivit dem för långt i processen, det var inte varit styrt vilket gjort att det blivit dyrt och inte alla gånger speciellt väl mottaget. Dessutom har hela deras inställning varit, köp en cool bil sedan kommunicerar vi inte mer med dig. De har helt missat den viktigaste delen i en kunds köpprocess, hela bekräftelsefasen och relationen till samhället. När en packning varit felaktig har det rivit ned krigsrubriker medan Volvo klarar totala katastrofer inklusive rena lögner, just därför de haft bättre koll på sina köpares processer och sin egen innovationsprocess.  Dock har även Volvo tappat här och ett bolag som Porsche som på 80-taket var halvdålig kvalitet och på gränsen till vulgär, med lika få sålda modeller som SAAB, tagit för sig och är kvalitet och kundtillfredsställelse hela vägen genom kaklet. 
För övrigt anser jag att innovationsarbete skall kunna bedrivas med oskattade vinster. Till valet uppmanar jag politikerna att ge alla företag i Sverige möjlighet att fondera 50% obeskattade vinster för innovationsarbete kommande år.