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Christian Rangen: Why Superclusters are Engines of Future Growth

 

The world is learning to innovate faster – and innovation superclusters are playing an increasingly important part.

Sillicon Valley (tech), Boston (healthcare), London (fintech), Tel Aviv (tech) are famous clusters in today’s global economy. They attract talent, capital, R&D investments, corporates and create a strong collaboration model across a large ecosystem.

Countries and regions are now learning to actively build and grow future-oriented clusters on a massive scale. They are designed to accelerate regions and countries into the future. We call them Innovation Superclusters.

Not many across the globe have an in-depth understanding of what it is and what exactly it entails. We sat down with Christian Rangen, who is doing an increasing amount of work within Innovation Superclusters, to get a better overview of what Superclusters are and how they are shaping the future.

 

Listen to the podcast here:

 

What are innovation superclusters?

Innovations superclusters are large system-level government-led initiatives to drive and accelerate national innovation programs.

While a lot of governments do have quite active innovation policies, very few governments have put together the building blocks and all of the pieces for what we call Innovation Superclusters.

Innovations Superclusters can best be understood by looking at bringing together the five pillars of the innovation ecosystem. So, you have the academics, you have the governments, and you have the corporates. That’s traditionally the triple helix.

Recent research from MIT also adds the entrepreneur and the capital. Now we see that this is really the five pillars of the innovation ecosystem . What is new is that governments can really build and actively design these.

 

So are there different types of clusters?

You know that’s a good question. It’s actually a great question.

We’ve identified and mapped out what we call three types of clusters, where you have EC (Emerging Cluster), GC (Growth Cluster), and SC (Supercluser). We rank them on some of their size and scale versus the impact.

Now the first level of clusters is the Emerging Clusters. They can be found all over the country or all over the region. They’re probably quite incomplete in terms of being an ecosystem and they’re quite local by design. Typically they’ll have between 20 to 25 and have 100 members.

Next you have the more powerful, the more impactful Growth Cluster. Growth Cluster is really a high potential area that the government should look closely at and definitely keep developing.

As a cluster it already has strong value creation and it might actually cover a region, looking beyond just national borders. And so you can have a Growth Cluster at the border around Hong Kong and mainland China, you can have them growth cluster between Singapore and Malaysia.

Now what’s really interesting is the third level – the third type of cluster – which is what we call the Superclusters. Superclusters really compete globally.

They have a large share of export value creation and they really have a disproportional value creation in them. One country might sustain several but probably no more than 10 Superclusters.

When you’re really analyze them, it takes easily 10 years+ to fully develop. These clusters are large, they have a large number of players and they can easily have 500 plus members covering government representatives, entrepreneurs, investors, academics, and of course large companies all coming together to form and develop the Supercluster.

 

What does this mean to them?

Well first of all, it means governments can take a much more active role than – perhaps at least in some regions – they traditionally have. The example in Canada shows that governments can really go in and design and lead Superclusters. I think that this is a revelation. Governments, even in a global competition, can take a much more active role than they traditionally have.

 

What are some examples of Superclusters today?

The best example that we have right now is actually Canada. Canada has this new government which I’m sure you are familiar with, and led by its new innovation minister, is really driving a lot of great work around Innovation Superclusters.

They just announced almost a billion Canadian dollars to be invested over the coming decade.

Their program aims to create 50 billion Canadian dollars of value and more than 50000 jobs. Now what’s interesting is that these jobs are all built around what we call the industries of the future.

So there are jobs around AI and jobs around the ocean space, the ocean economies, and Canada is doing this really thought-through well-developed government programs. If you want to look to the best examples you want to look to Canada.

It’s worth mentioning that Malaysia – and this is a project we’ve been involved with – Malaysia has also invested significantly in trying to understand, map out and start developing superclusters.

This work is still early but we’re very optimistic to see what’s going to happen in Malaysia and the Southeast Asia region in the coming decade.

 

What is driving superclusters globally?

That’s a great question and it’s also something that I know government leaders and political leaders are discussing. I think, to quote the great book The World Is Flat, I think that countries and regions are competing, they’re locked in the global innovation race.

Israel, Shanghai, Shenzen, Silicon Valley, of course Boston. These are all regions that are attracting outsized investment, outsized talent, and outsized value creation. Governments want that. Governments want to attract this, probably much more than they have so far.

So global competition, global innovation, the global race and Superclusters is just good government policies for creating economic growth.

 

How do you expect Superclusters to evolve in the coming decade?

Superclusters as a phenomenon is still fairly new. They’ve been partially in the literature and in the research but really developing them on the massive scale that we’re now starting to see, I think there’s a lot of work that’s going to happen here in the next decade.

Now some argue that Superclusters are really emergent by design. That means that they grow and develop by themselves. Government don’t have a big role to play.

Now we would argue that the opposite is true. Governments can actively shape – by good policies of course – what Superclusters should look like.

So what I expect to see in the coming decade are three things:

One, I think we’ll see more aggressive government policies for innovation. Naturally China, we’re seeing that already. But also the other economies across Asia will invest more, will lead more when it comes to developing Superclusters.

Number two is I think the speed of the development of Superclusters will pick up. Canada has spent some time doing this. I think as governments learn the tools that we have developed, as they learn the policies that’s working well let’s say in Canada, the speed of Superclusters are going to pick up significantly.

The third thing that’s going to evolve in the coming decade is simply value creation. I think that as more and more startups attract capital, get exits, reinvest in the ecosystem, governments will realize that they need to actively attract not only capital per se, but the ecosystem and the Superclusters that support capital and startups at a faster scale.

So there’s a lot of forces speaking for and supporting and driving Superclusters globally.

 

How can governments get started on Innovation Superclusters?

The answer to that is they need political leadership and they need political will.

If you look at Canada, it has really been a top down effort and that’s gotten the country to where it is right now. You do need a burning soul to lead this, you need somebody with passion and a big capacity to actually lead this.

So governments can get started by having a strong political leader or a strong agency leader in in driving this.

In Malaysia, a lot of this work has been on the leadership of the Ministry of Finance, but also the CEO of the Malaysian Global Creativity and Innovation Centre, Ashran Dato’ Ghazi. Governments need that leadership in place.

Second is governments need to assess what they currently have in place. I think most governments will say “we have several of the building blocks but we’re of course missing some”.

So after doing that mapping, the governments can say “OK, what do we need to improve?”, “What are the tweaks that we need?”, “What are the upgrades that we need?”, and “What are the investments and the policies that we need?”.

The third – start running programs on the ground. Start engaging the ecosystem by town halls, by dialogue workshops, reach out to key players across media, corporate, startups, investors and the ground level and the grassroot engaged.

So you need leadership, you need an assessment of where you are, then start tweaking and you need to engage the wider ecosystem.

 

Final question: what are the top three pieces of advice you would offer anyone looking to get started on building Superclusters?

Well, three pieces of advice I would offer is:

Number one – the government can have a much more active role than perhaps many governments have had, with the right tools, with the right frameworks in place. The government can genuinely lead national transformation through building Superclusters. So the first one is yes and governments actually can.

Second we need to understand what we call the industries of the future. The industries of the future are the potential, quite likely growth industries, that your country or your region will see and we need to start shaping policies around that. Most governments regretfully have policies to protect the industries of the past. They might have regulations in place, they might have funding programs in place, they might have taxation schemes in place to support old industries rather than shape new ones.

So the second advice is really to understand what are the potential industries of the future in our country or in our region.

And then the third advice is to really just do it. This is not rocket science, it’s complicated it’s complex, it’s system level thinking, but building, shaping, scaling Superclusters is fully within the grasp of virtually any government worldwide.

It does take political will, it does take political leadership and it probably takes a 10-year horizon. But with those things in place, any country or any region can successfully build Innovation Superclusters around industries of the future.

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Download strategy tools for building Innovation Superclusters free here.

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The Four Roles of the Strategy Officer

four roles of the strategy officer christian rangen

four roles of the strategy officer christian rangen

The role of the strategy officer is rapidly evolving. Expectations are rising, yet changing industry landscapes, emerging disruptors and well-funded startups with aggressive business models puts significant pressure on the role. It is vital for companies to understand the four different roles for the Strategy Officer. Does your company?

In our work with hundreds of companies and dozens of strategy officers, we have come to identify four significant roles for the strategy officer. We believe it is critical for companies to understand how their specific strategy function works and how they can improve it in the face of emerging competition and significant change.

 

The Four Roles Explained

 

INFLUENCER

The Influencer succeeds by creating internal momentum for strategy. This might include sparking key conversations, framing new strategic questions, instilling a sense of urgency, of curiosity within all levels of management ranks.

He acts as a coach, a facilitator and networker internally. Strategy workshops might have very experimental formats, few slides and never have any answered prepared in advance to be presented. He cares deeply about creating shared understanding across complex issues, often simplifying the complex into easy-to-grasp key issues.

The influencer is a master of conversations.

Fred, a long-time client of ours, often prepared his management strategy workshops by asking three advance questions, often framing the questions in a highly challenging context. “What would happen if our market fell by 45% in 90 days?”, or “What if Russia shuts us out?”. While strongly divergent from daily operational issues, the reframing of potential strategic issues, helped expand the thinking and open for radical threats, scenarios and, eventually, strategic moves by the company’s legacy business units.

 

 

BIG SYSTEMS THINKER

The Big Systems Thinker has her focus far outside the home organization. She lives by strong external orientation. She spends 80% of her time on external partnerships, alliances, mapping out M&A prospects and closing deals. She has strong relationships with key stakeholders across the landscape, sensing changes and disruptive trends long before they fully develop.

She excels at sensing potential industry scenarios 20-30 years ahead. Mapping industry shifts and strategic inflection points are just a normal part of her job, giving rise to her role as a complex, Big Systems Thinker. She works closely with emerging startups, VCs and technology investors to have a first row seat to the next generation of companies to watch.

The Big Systems Thinker is a master at sensing the future.

A European media company brought in a former VC and technology founder to help develop an aggressive growth strategy. His network and access to emerging startups on the US west coast, was a large part of why he was hired. Starting in the role, it became apparent his thinking was just too far ahead from the main engine and current focus of the company, eventually leading to his departure in less than 15 months.

 

 

ANALYST

The Analyst is the brainy, educated, numbers person. He is driven by getting tangible facts, allowing for conclusions and clear recommendations. The analyst writes complete business cases to be presented in complex and lengthy slide decks. He might be oblivious to social influence and stakeholder management as a long as he’s getting his analysis right.

If leading the strategy process itself, the analyst’s focus is getting all the facts into organized slides. The analyst is also likely to hold the role of Balanced Scorecard Manager, having a highly numbers- and metrics-driven approach to strategy execution.

The analyst is a master of getting the current facts and numbers right.

We frequently encounter Analysts, tasked with writing the perfect business case for the top management’s consideration. Basic concepts like customer discovery, business model testing and lean startup principles are understood by the people we meet, but far removed from how they work. Often, they experience months of analysis and a strong recommendation, only to be shot down by management. It is frustrating in many organizations to see the effort going into the “strategy as analysis”, while an evolving, involving, learning approach would be far more effective.

 

 

SCOUT

The Scout is responsible for early outside development of new ideas and new networks. Attending conferences and events outside his own industry domain, he gets a peek at upcoming developments across many areas and disciplines. He is likely an avid reader of multiple sources and books. He would be comfortable hanging out at Uber Elevate Summit, Uber’s annual summit for their flying car project, without it having any significant relevance to his company’s day-to-day strategy.

The Scout is adept at scouting future trends and emerging customer behaviors. He early identified the sharing economy and Blockchain as key trends with massive potential.

The Scout might see the future, but he struggles to create internal interest and support. He has limited or zero mandate, funding and execution capability. The Scout suffers from limited impact, over time creating frustration and departure from the organization.

The Scout is a master of seeing early trends but struggles to convert into internal action.

 

 

HOW THEY WORK

 

Their roles are usually very different, as are their working methods.

The Scout will often be working alone or in a very small team, allowing little ability to engage and activate the organization.

The Analyst usually has a team around him, often with more analysts. Combined, they have some reach, but in reality, limited ability to influence and engage with organization.

The Big System Thinker often has a larger team under her, while she personally is both visible and highly influential within the company. Often, she carries a strong vision for the future of the company, balancing the need to serve the CEO vs. becoming the thought leader herself.

Finally, the Influencer uses his network for maximum effect. He might build and operate formal, active strategy networks internally, creating strong reach across the strategy discipline. Equally important is his informal, invisible networks at all levels of the company. He might not push his vision for the company, but through his strategic questions and re-framing of key issues, he actively helps shape the future.

 

PICKING THE RIGHT TOOL FOR THE JOB

In our work with Strategy Officers and their strategy teams across multiple industries, we are often perplexed by the lack of tools they have at their disposal or they choose to use. Through our seven-year R&D project, Strategy Tools.io, we have developed an open source suite of 15+ strategy & innovation tools. A large part of our work has been understanding the context, need and developing the right tool for the job. What we have seen, first-hand, is the effect of having the right Strategy Tools for the job.

 

 

INFLUENCER: STRATEGIC INNOVATION CANVAS

 

The Strategic Innovation Canvas can be applied in multiple ways. First and foremost, it is a great conversation starter on the overall strategic priorities of the firm. Built around the classic Three Horizons, the canvas forces a strategic discussion on short-term vs. long-term thinking.

With a good facilitator, the canvas frequently kick-starts a wide strategy review, opening mindsets and perspectives to a much welcome, more expansive strategy thinking for all participants.

DOWNLOAD YOUR STRATEGIC INNOVATION CANVAS

 

BIG SYSTEMS THINKER: INDUSTRY SHIFTS MAP

The Industry Shifts Map lets groups and individuals map out and better understand industry-level changes and the company’s ability to successfully respond. Columbia Professor Rita McGrath emphasizes the importance of grasping industry level strategic inflection points, something we likely to see at an accelerated pace in the coming decades.

The Map can create a shared understanding of important shifts, in turn driving new strategic thinking.

We recently hosted the CEO of a global services company, based in the US, with operations around the world. Taking him through the Industry Shifts Map helped clarify and visualize the level of change coming within his industry, and at the same time revealing how poorly equipped his firm was for the impeding shifts. He had widely read and reflected on these issues, but working through the Map by himself cemented the coming changes in a clear and visual way.

DOWNLOAD YOUR INDUSTRY SHIFTS MAP

 

 

ANALYST: STRATEGY INTRO

The Strategy Intro is often our baseline, entry level Strategy Tool. For Analysts, it gives a basic framework to balance current core business, new growth and exploring future growth areas. With the right KPIs in place, the Analyst can delight in the Strategy Intro framework. The important thing here, is being able to balance current core with exploring new growth. For most Analysts, this is challenging; most numbers, financial figures and good data is historical in nature, making any future or internal seed projects seem small and insignificant. Yet, successful transformations have taught us to strive for the optimal balance between legacy core and next, potential core areas. With the Strategy Intro, even the Analysts have a tool supporting this ambition; balance today for new growth tomorrow.

DOWNLOAD YOUR STRATEGY INTRO

 

 

SCOUT: MARKET OPPORTUNITIES CANVAS

The Market Opportunities Canvas gives the Scout a one-page framework for mapping, grasping and communicating emerging trends that might provide new, strategic market opportunities. Whether from global megatrends, new technologies or customer needs, the tool allows a simple framework for grasping emerging opportunities. The Market Opportunities Canvas is a easy-to-use tool for Scouts in any type of organization.

DOWNLOAD YOUR MARKET OPPORTUNITIES CANVAS

 

 

 

What’s next? The coming evolution of the Strategy Officer’s role

 

Whether you are an aspiring young strategy manager or an experienced influencer, one thing seems certain; the role of the Strategy Officer is rapidly evolving. For companies experiencing increasing levels of industry changes, new business model innovations from well-funded startups or a massive industry convergence, the role of the Strategy Officer is set to grow ever more important. Driving faster organizational agility, bringing new strategy tools to the job, growing a high-impact portfolio of strategic initiatives, setting up new venture CompanyX-unit and implementing strong M&A capabilities around future needs; the expectations are only set to rise.

Worldwide, Strategy Officers have an ever increasing important yet challenging job ahead. We believe understanding the Four Roles of the Strategy Officer is a starting point. Yet, the real potential for higher strategy impact, agile change and a successful future growth strategy requires a visionary Strategy Officer with the ability to activate and bring the organization along for the journey into the future

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Which role do you play the most as the strategy officer? Share with me your thoughts and comments below.

 

 

ABOUT THE AUTHOR

Christian Rangen is a strategy & transformation advisor to top management, boards and strategy teams. His clients range from Malaysia, Middle East and Europe. He is Co-Founder of Engage // Innovate, a strategy & innovation consulting company and Strategy Tools.io – the modern strategist’s toolkit. He is management educator and faculty at BI – Norwegian Business School. His recent projects include Malaysian Innovation Superclusters, Corporate Innovation Bootcamps and Accelerating National Transformation projects.

He can be reached at Christian@engage-innovate.com

www.engage-innovate.com                  www.strategytools.io