Magnus Penker, Director & Partner at Bearing Consulting Ltd.
Social Innovation and sustainable thinking is emerging, business leaders shifting focus using social and sustainable thinking sharpening their competitive advantages. Interested reading more? Have a look at our new trend watch at http://www.dfkompetens.se/trendspaning/veckans-entreprenorskap/2011-08-01_social/index.xml
Last Friday we could read an interesting blog post by Scott Anthony. It was about four typical innovation pitfalls. Great article, and I like to comment upon it.
The first lie is that you can trust the feedback when asking customers, and instead go for what they do today or if they are ready to spend some money on a new idea (on an early stage). This is a very useful way of verifying the real need and according to my experience also to be combined with testing the market with different versions of the idea, of different markets and different prices will do the job even better. This is also how you build successful e-commerce solutions today.
The second lie is that you will ship in six month which do not happened often according to Scott Anthony which recommend to have a look at Scrum and go for incremental releasing. However, here I have some criticism. Many firms do actually have significant architectural issues due to this approach. Instead, put effort in building a sustainable and scalable architecture and then release increment by increment and in some cases even open up for external innovations as an accelerator of ideas and functionality. The architecture can also be released base upon a quick beta version without any forward-compatible promises and in stage two replaced with a stable long-term architecture where all old components are replaced.
The third lies it that the sales people say of course I can sell that. Could not agree more, no further comments needed.
The fourth lie is that executives are open to everything, they are not when i come to money. Always ask for a budget is Scott Anthony’s recommendation. Good point here, but I would actually give the recommendation to bring a client or customer to the meeting when the executives when presenting the idea.
In a recently report Gartner state that games will be used to drive innovations, an old phenomenon but interesting. One of the most interesting stories is about how LEGO made an amazing turnaround some years back, and in the new spirit started to invited their customers to design and customize their own LEGO via Internet. And not just that, they also released a complete new highly interactive and flexible platform Mindstorm encouraging customers to design and develop their own LEGO-robots. Talk about innovative leap: strengthened relationship, better understanding and customer insights as well as a renewed hype around their products. Just have a look at the clip I found on YouTube.
Today, it seems like many companies and organizations actually try to use internet based games, as an open innovation approach, gaining better understanding of behavior and demand. Another example on how games can be used to get better insights and ideas is how the UK Department of Labor launched a game-like application called ”Idea Street” aiming at collect new insights from their 120 000 users. Read more here.
As we speak there is a new trend rising providing us with opportunities or threats, depending on what side of the fence you are mentally located. Let’s first back the tape a bit. Take a moment and ask yourself “why are people launching apps on Android and iTunes in numbers close to impossible to believe”?
I think it is because it is possible, and the evolution takes care of the rest. But the most intressting is the consequence. The platforms used, Android and iTunes, are in practical terms nothing else that innovation frameworks moving Apples and Googles R&D departments to be carried out by their customers. For free. And the good part is that due to the number of downloads a self-correcting (evolutionary) process promote the best and strongest innovations at the same time as it is prototyped, tested, refined and commercialized. Actually, it is a perfect innovation process driven from outside and in – to no cost except from the platform. This is Innovation 2.0.
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.
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:
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
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.
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?
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.