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Scaling Up in the New Nordics

35 million people. 85+ unicorns. The world’s highest unicorn density outside Silicon Valley. And yet — the New Nordics is still leaving enormous value on the table. Here’s why that’s about to change.

What is the New Nordics?

The New Nordics isn’t just a geography. It’s a mindset. Traditionally, “the Nordics” meant Sweden, Denmark, Norway, Finland, and Iceland — a prosperous, high-trust, sustainability-driven corner of the world known more for ABBA and flat-pack furniture than for billion-dollar tech companies. With recent AI winners like Lovable, Legora and deeptech companies like Oura Health,  that story is changing.

The New Nordics extends the frame. It brings Estonia, Latvia, and Lithuania into the picture — creating a combined region of 35 million people, world-class technical talent, battle-tested digital government, and a startup density that outpaces virtually every other region on earth. Think of it this way: Sweden gave the world Spotify and Klarna. Estonia gave us Skype and Wise. Lithuania gave us Revolut’s first e-money license. Finland is home to Supercell and 15 unicorns. This is not a collection of small countries.

This is one of the world’s most formidable innovation corridors — when and if it acts like one.

Why the New Nordics is Punching Above Its Weight

Let’s look at the numbers. The Nordic startup ecosystem is now valued at $552 billion — 16 times its value just a decade ago. In 2024 alone, Nordic startups attracted $8.2 billion in VC funding, with international investors contributing two thirds of the capital. The region produced 82 unicorns by 2024, up from just 9 in 2014. For a region with 4% of Europe’s population, it accounts for 17% of all European unicorns. Per capita, the New Nordic countries are second only to Silicon Valley in unicorn production.

What’s driving this? Three unfair advantages that most regions dream about.

First, a culture of building for the world from day one. Nordic and Baltic domestic markets are simply too small to sustain a scale-up. This isn’t a disadvantage — it’s a trigger function. Founders here think globally from the first pitch deck. They have to in order to scale. Second, extraordinary digital infrastructure. Estonia runs the world’s most advanced digital government. Finland treats broadband as a legal right. Sweden has fibre optic networks reaching 96% of households. This isn’t a backdrop — it’s a competitive weapon. Third, a deeply rooted engineering culture combined with a pragmatic attitude toward risk. Strong social safety nets reduce the downside of failure. Technical universities produce founders, not just employees. And the culture of trust — among founders, investors, and public institutions — keeps transaction costs low and collaboration high.

Early Success Stories from the New Nordics

The success stories are no longer just from the last generation. They’re happening right now. Lovable, the Swedish AI startup, scaled to $200 million in annual recurring revenue within its first year — a trajectory that would turn heads in Palo Alto. Legora closed a $550M series D, with a who’s who on the cap table. Stendr raised a $5.4M pre-seed to build AI-powered drone defence systems in Norway, in an industry few investors would have touched just 24 months ago. Stegra, the Swedish green steel company, raised $1,6BN for industrial sovereignty. Kelluu secured Nato Innovation Fund’s first deal, a $15M series A, in Finland.

On the fund side, Voima Ventures closed a €100M+ Fund III focused on deep tech across the Nordic-Baltic region. Final Frontier is leading a new pack of defense funds. Norrsken VC committed €300 million to “AI for Good.” Maki.vc launched its third €100M fund for deep tech and brand-driven startups. Capital is no longer the bottleneck it once was.

On the ecosystem side, the launch of the Nordic Deep Tech Valley initiative in May 2023 — led by Startup Estonia alongside partners in Finland and Sweden — represents perhaps the most important strategic bet the region has made. The premise is simple but powerful: in the global competition for deep tech talent and capital, it is regions, not countries, that win. Estonia, Finland, and Sweden are pooling resources, aligning policies, and presenting themselves as a unified deep tech hub to the world.

The first Nordic-Singapore Innovation Days in 2025 took joint Nordic delegations to Asian markets — a tangible sign of what coordinated regional strategy looks like in practice.

Barriers That Are Holding the New Nordics Back

So why isn’t the New Nordics already Europe’s answer to our entrepreneurship ecosystem challenges? Because four stubborn barriers remain.

The European Paradox — alive and well in the north. The gap between world-class scientific research and commercial success is a genuine, region-wide problem. I see this very clearly in my work across Sweden and Finland. The Nordics produce exceptional researchers. They do not always produce exceptional deep tech companies. Labs and universities are full of breakthroughs that never find their way to market. Despite $2.4 billion in deep tech funding in 2024, early-stage ventures remain underserved.

Fragmentation. Walk into a startup event in Tallinn and ask who the key players are in Gothenburg. You’ll get blank stares. In Bergen, ask who the key angels in Copenhagen are, same thing. Cross-border cooperation happens, but far below its potential. There is no coherent big picture. Ecosystems compete for talent and capital that could flow across borders freely if the infrastructure existed.

The capital gap at the growth stage. Pre-seed and seed funding has improved dramatically. But the Series A, B and C gap — the so-called “valley of death” for scale-ups — remains. European investors tend to be more conservative and metrics-focused than their US counterparts. In our work at Link Capital, we see this across our portfolio as founders prepare to scale. Rounds are smaller, valuations lower, timelines longer. A company that raises $5 million in Oslo might raise $25 million for the same business in San Francisco.

Liquidity & exits – or lack thereof. We see this clear as day. Across Scale Up! Masterclasses, founder programs, angel workshops and venture fund discussions. We are not generating the liquidity that the ecosystem deserves. It is a systemic challenge. Founders are not prepared for it (we see this crystal clear in Scale Up!), angels and VCs don’t structure for it, and the secondaries funds are still too few and far between. Fix the liquidity, and more (pension) capital will flow. But it starts with the founders at day one.

Fixing liquidity with the Outcome Canvas, in Dubai. Now, we’re back in the Nordics

How to Solve Them The region needs to make four big moves — and it needs to make them together.

Move 1: Industrialize research-to-company pipelines. Estonia has set a target of 500 deep tech companies by 2030. Singapore — a city the size of a small Estonian island — already has 1,300. The gap is not in the research. It is in the infrastructure that converts research into startups. Entrepreneur-in-residence programs, IP frameworks, research accelerators, and cross-border mentorship need to become standard features of every university and science park in the region. Initiatives like the Nordic Deep Tech Valley’s Research Accelerator for HealthTech are the template.

Move 2: Build the common narrative — and stick to it. International capital is not interested in Norway or Finland or Sweden. It is interested in the region. The New Nordics needs a single, compelling story told consistently at every global stage — from Slush to TechArena to Singapore Innovation Days. This is what the ecosystem needs. Nordic Deep Tech Valley initiative is already building it, and it matters enormously. When the region acts as one, it carries weight on the other side of the globe. In my work with innovation clusters and ecosystems, we can do so much more to integrate our region far better.

Move 3: Fix the growth-stage funding gap. More regional fund-of-funds. More pension capital. More collaboration between Nordic institutional investors and international growth-stage capital. More angel networks — particularly those focused on deep tech — operating across borders. The Baltic and Nordic angel communities need more connective tissue. Structured syndication, shared deal flow, and regional SPV frameworks are not glamorous. They are the plumbing that turns a good ecosystem into a great one. We need to enable more of it.

Move 4: Boost liquidity across the investment landscape. Look to Sweden, study how Sweden has become an investment powerhouse. Study Nasdaq First North Growth Market in Stockholm, now Europe’s Leading Marketplace for growth companies. Set up more secondaries funds. Make partial liquidity at A and B a real, accepted option for early-stage investors to cash out. Train and prepare founders for how to think ‘value’ and ‘liquidity’ at every step of the journey.

The Moment Is Now

Here is the thing about building ecosystems: windows open and close. Right now, the window is open. Silicon Valley is expensive, politically turbulent, and increasingly unattractive to international founders. Europe is hungry for an innovation identity. Genuine deep tech is having its moment — quantum, AI, climate, defence, biotech — and the New Nordics is positioned at the intersection of all of them. The foundations are extraordinary. What has been missing is the will to act as one region, not separate countries competing for the same scarce resources and founders.

Exploring Nordic Markets in Scale Up Nordics!

This is the challenge that inspired our work on Scale Up Nordics!

With over 7.000 participants; from startups, scale ups, angel networks, VCs, FoF’s, innovation agencies and ecosystem developers, it was time to do our part to support the New Nordics. It was time for Scale Up Nordics!

A new growth initiative, to support the startup- and scale up ecosystem across the New Nordics. We’ve developed the tools, the simulation, the academic foundation and the experience to support a generation of New Nordics founders, investors and ecosystem developers.

It’s time for the New Nordics to live up to its potential.  It’s time to Scale Up!

Want to explore how your ecosystem or organization can be part of Scale Up  Nordics? Get in touch.

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Four Steps to Building a World Class Angel Network

It started in 2012 with five words: “I have someone you should meet.” That introduction led to one of my earliest angel investments — a Norwegian drilling technology company that would eventually IPO, jump from 1 to 60 per share, and remind me that angel investing is rarely a straight line. But it works. And when you bring a community of angels together around a shared mission, the results can be extraordinary.

Angel networks are one of the most powerful, and most underbuilt, parts of any startup ecosystem. Done well, they funnel early capital to ambitious founders, help experienced investors make smarter bets together, and create a flywheel of returns, stories, and momentum that attracts even more talent and capital into the ecosystem.

I’ve had the privilege of working with hundreds of emerging angel groups, fund managers, and ecosystem builders across Europe, Africa, the Middle East, and beyond. From Transylvania to Kigali, from Bergen to Dubai — the patterns are surprisingly consistent. And so are the mistakes.

Here’s what I’ve learned about how the best angel networks are built.

Step One · Year 1–2

The Spark: Get the First People in the Room

Every world class angel network starts the same way. Not with a grand strategy. Not with a board of directors and a slick website. It starts with one or two people who are genuinely excited, a handful of curious investors, and the courage to organise a dinner.

The founding energy matters enormously. That early spark — the sense of mission, the theme, the “why are we doing this?” — is what gets the first 10 to 30 people loosely engaged. It’s what keeps them coming back. Without it, an angel network is just a mailing list.

Key Success Factors at Stage One

  • 1–2 key people with genuine enthusiasm, driving the process and bringing people together
  • A clear theme or sense of purpose — technology, impact, a region, an industry
  • Early trust-building between participants: dinners, meetups, conversations
  • A simple angel investor email list to start sharing deals and ideas
  • 2–4 events or meetups in the first 12 months — quality over quantity
  • 1–2 deals actually getting done within the first year
  • Securing early grant financing to cover operations for the first 2–3 years
  • Basic education: how to structure a deal, what to look for, how to make your first investment

The goal here is not perfection. It’s momentum. You’re building relationships, not infrastructure. You’re developing early trust between people who might one day co-invest in a startup together. That trust takes time. It happens over a shared meal, a spirited debate about a pitch, a WhatsApp message at midnight: “Have you seen this deal?”

Getting 1–2 deals done in year one is more important than any governance document you’ll ever write. Nothing builds belief in a network like watching it actually work.

Step Two · Year 2–4

The Structure: Build the Foundation for Real Operations

If Stage One is about sparking interest, Stage Two is about building something durable. This is where most early angel networks either mature into something real — or slowly fade out as the founding energy dissipates.

The shift from a loosely organized group to a functioning network happens when someone steps up as a proper manager. Often part-time at first. But having a dedicated person handling operations, deal flow, communications, and member development is the single biggest indicator of whether a young angel network survives into its third year.

Key Success Factors at Stage Two

  • First part-time (possibly full-time) angel network manager in place
  • Early governance: a board or advisory board beginning to take shape
  • A website and basic deal flow platform established
  • Social media presence — angels and founders need to find you
  • An early business model: grants, sponsorships, or an initial membership fee
  • Template documents circulating: term sheets, investment agreements, NDAs
  • 4–10 events per year, with steady, interesting deal flow
  • Angel investors beginning to develop their personal investment strategy

It’s also the stage where the network starts to professionalize its deal flow. Early on, deals come in through personal connections. At Stage Two, you start building systems: a submission form, a basic screening process, a template for how startups present. Nothing elaborate. But enough structure that founders know what to expect — and members feel like they’re part of something organised.

Don’t underestimate the power of documentation. Template documents — a standard SAFE note, a simple term sheet, a co-investment agreement — save hundreds of hours, reduce friction, and signal to founders and investors alike that this is a professional operation. Your legal partners will thank you. Your members will too.

Angel portfolio management. Remember where you put your money. From Scale Up Europe Angel! Masterclass, Cluj

Step Three · Year 3–6

The Scale: Build the Team, Build the Brand

Stage Three is where a good angel network becomes a great one. This is the phase of deliberate growth — recruiting a diverse membership, building a real team, and establishing workflows that can handle serious deal volume without falling apart.

At this stage, the network can no longer run on the passion of one or two founders. You need a wider leadership group — 3 to 5 key people spreading the work and bringing different networks, perspectives, and skills. You need professional staff. And you need a governance structure that protects the network as it grows.

Key Success Factors at Stage Three

  • A core leadership team of 3–5 people, alongside 1–3 full-time staff
  • Robust governance: a proper board and advisory board
  • A clearly defined workflow — from onboarding new members to closing investments
  • A consistent cadence of events, pitch sessions, and meetups throughout the year
  • A relentless focus on angel training, upskilling, and quality improvement
  • Deep relationships with industry partners, sponsors, and service providers
  • A sustainable business model beginning to take shape — membership fees, sponsor packages

One of the most important things you can invest in at this stage is the quality of your Deal Managers. A great angel network Deal Manager does four things: they prepare startups to present well, they bring the right angels together around the right deals, they structure the investment cleanly, and they help get deals across the line. This sounds straightforward. It isn’t. It’s a craft that takes time to develop, and training your people in this role will pay dividends for years to come.

The shift from Stage Two to Stage Three is not about adding more events. It’s about building a machine that produces high-quality deals, educated investors, and closed rounds — reliably, repeatedly, month after month.

Member diversity deserves its own emphasis here. The best angel networks I’ve worked with are intentional about recruiting members with varied backgrounds — serial founders, corporate executives, family office principals, domain experts, diaspora investors. Diversity of experience leads to better due diligence, broader deal access, and wiser investment decisions. Don’t let your network become a monoculture

Angel investor coaching founders on cap tables and term sheets.

Step Four · Year 5+

The Standout: World Class Execution, World Class Returns

There are thousands of angel clubs around the world. There are very few world class angel networks. The difference is not just size — it’s the quality of what happens inside.

At Stage Four, the network has become a destination. Top founders seek you out. Institutional investors want to co-invest alongside you. The best local and regional angels want to be members. And exits — real ones — are starting to happen, with returns circulating back into the ecosystem as reinvestment capital and war stories that inspire the next generation.

Key Success Factors at Stage Four

  • A solid, recognised brand — locally, regionally, possibly globally
  • High-volume, high-performance deal flow systems: groups like Hustle Fund review 1,000+ deals per month, sharing the top 5–6 with a 2,000+ angel squad
  • Full-time professional staff running day-to-day operations
  • High-quality champions: board members, sponsors, and mentors who add real value
  • A clearly defined, sustainable business model — typically a mix of membership fees and sponsorship
  • A growing portfolio at Series A, B, and C — companies that started in the angel network
  • Rising chatter about exits, returns, and liquidity events
  • Multiple success stories: “Were you part of the deal where investors made 80x last year?”

That last point is worth dwelling on. Stories travel. When a member of your network posts publicly about a meaningful return — a 10x, a 30x, an exit that changes their financial life — it sends a signal to everyone watching. It tells founders that patient, smart capital exists in your ecosystem. It tells prospective angel investors that this is worth their time and money. It tells corporates and governments that the network deserves support.

The events at Stage Four are also qualitatively different. They combine in-person and online formats, attract high-calibre speakers and deal flow, and feel less like networking nights and more like strategic gathering points for the most informed investors in the region. Members arrive prepared. Discussions are substantive. Commitments follow.

The ultimate measure of a world class angel network is not the number of members or the total capital deployed. It’s this: are the companies that came through your network building great businesses? And are your investors growing wiser, wealthier, and more generous with each passing year?

Angel investors going hands-on with the team. Time to build.

A Few Things I’ve Learned Along the Way

Anyone can build an angel network. But it requires leadership. Not management. Leadership. The ability to inspire people to take a risk on something new, to trust strangers with their deals and sometimes their money, and to build a culture where the best behaviour — generosity, transparency, long-term thinking — becomes the norm.

Financing matters more than most people admit. The majority of angel networks in their early stages survive on grants and public innovation funding. That’s fine — and often the right approach. But have a plan for transitioning to a self-sustaining model. Membership fees, deal fees, sponsor packages, and training programs are all viable paths. The networks that last are the ones that figure out their economics early and don’t wait until the grants run out to start thinking about it.

The long game is the only game. Building a world class angel network takes five to ten years. The networks I most admire didn’t become great quickly. They evolved through each stage with patience, consistency, and a refusal to cut corners on quality. They had a strategy to evolve over time — and they stuck to it even when it was hard.

From Norway to Romania, from Rwanda to Malaysia, I’ve watched communities of passionate investors come together, build trust, and begin to change the trajectory of startups — and entire ecosystems — around them. It’s some of the most meaningful work happening in the world of finance today.

And it all starts with getting the right people in the room.

Ready to Build?

Let’s Build Your World Class Angel Network Together

Whether you’re launching a new angel group, professionalising an existing network, or developing an ecosystem-wide angel investment program — we bring hands-on experience from hundreds of engagements, programs and Masterclasses across the globe.

Get in Touch

Chris Rangen is a strategy advisor, business school faculty member, and serial angel investor. He has made 150+ investments, supported 250+ emerging fund managers, and trained over 10,000 people in investment readiness across the globe. He is co-founder of Strategy Tools, visiting faculty on venture capital and entrepreneurial finance, and chairman of three venture capital firms.

The Scale Up Angel! Masterclasses has been delivered globally, supporting angel networks, angel groups and ecosystems from early spark to world class expertise.

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On Superclusters and Ecosystems

Innovation Superclusters and innovative ecosystems are both crucial engines of growth. In our research, we have looked into future trends and how governments can actively build Innovation Superclusters around the industries of the future. 

SUPERCLUSTERS VS. ECOSYSTEMS

Globally, there are around 7000 formal Innovation Superclusters. Of these, around 15 – 25 may be recognized as genuine Innovation Superclusters. On the other hand, most startup ecosystem ranking will often rank the top 150 – 200, with Silicon Valley, Beijing, Boston, Shanghai, New York, and Tel Aviv topping the list. One ecosystem, let’s say Beijing, may count 30 – 100 clusters. While one cluster, possibly the Norwegian seafood cluster in Finmark, could be a single cluster, it does not have much of an ecosystem to lean on.  While both these systems of innovation are important, they are also fundamentally different.


SUPERCLUSTERS ARE ACTIVELY BUILT

Innovation Superclusters are the result of both active government programs, long-term industry leadership, and hands-on organizational development.  

A cluster will always have an operating organization, a (small) management team, a board or steering commit, an operating budget, members and reporting. No matter what size, from early “baby clusters”, to Growth Clusters and Superclusters, these traits are always in place.  

Two examples are the two ocean-centric clusters, NCE Seafood Innovation Cluster, located in Bergen, Norway and Canada’s Ocean Supercluster, based in St. John, Newfoundland. Both are led by a CEO, co-funded by Government and industry alike and working to solve industry-level challenges to unlock sustainable economic growth in the ocean space.  

ECOSYSTEMS ARE PASSIVELY NURTURED

Ecosystems, on the other hand, are far more passively nurtured. Granted, governments will invest heavily in various elements of ecosystem development, including Singapore’s recent announcement of a $500M investment into building Singapore into one of the world’s leading AI ecosystems.  

This will likely propel Singapore forward and put it even more firmly on the world map of most innovative tech hubs. 
But you are unlikely to find a CEO, a single member-based operating unit, a cluster-based strategy document and the close collaboration found in the best clusters around the world.  

CB Insights, an analysis firm, recently published an overview of the world’s leading tech hubs, or ecosystems. Much along the methodology lines of Startup Genome, CB Insights maps out the best tech hubs, based on a number of key variables.  

LOOKING AHEAD

Looking ahead, our research shows Innovation Superclusters are on the rise. At the same time, regions and nations are competing more than ever to attract, build and scale the best tech firms. Whether in life sciences, AI, smart mobility, clean energy or platform-based business models; expect to see both Superclusters and ecosystems become an even higher focus for governments, policymakers and nation builders in decades to come.  

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Building Innovation Superclusters

Around the world, Innovation Superclusters are on the rise. But what, exactly, are Innovation Superclusters and why do they matter?  

INNOVATION SUPERCLUSTERS IN SIX POINTS

While often misunderstood due to various policies, structures, funding models, strategies and capabilities, we find that Clusters and increasingly Innovation Superclusters can be identified and understood through six key points.  A Cluster initiative on Taiwan, in Korea or the Thai Supercluster program, will be different in context, industry need, and government program, but the six principles are equally valid across geographies and culture.  

1. Engines of Growth

Successful Innovation Supercluster is first and foremost Engines of economic growth, by connecting 100’s of members and partners. From a policy- and GDP-development point of view, Clusters are expected to produce value that far exceeds the national averages across all industries.  

2. Collaboration Networks

Second, Superclusters are immense collaboration networks built around the industries of the future. These clusters exist to build out larger, more connected networks around future key industries. By pulling together industry executives, academics, investors, startups and government leaders, the Superclusters aims to build close and personal ties across domains, roles, hierarchies, and traditional silos.  

3. Private-Public Partnerships

Third, Superclusters ae large-scale private-public partnerships, developed by design. While they do require certain foundational capabilities in terms of local industry, local talent and local investors, it is really the co-development of private and public partners that make the cluster initiative a success.  

4. Trust-based

Forth, Superclusters are trust-based collaboration platforms. While the level of trust and preferred route to develop trust may vary, the essence is that industry leaders, researchers, startups and other members in the cluster should work to create trust across the entire cluster base. This translates into collaborating on projects, sharing research data, pool company data into cluster collaboration projects (Seafood industry sharing fish health data for machine learning development).  

5. Solution Creators

Fifth, great clusters are solving industry-level challenges & opportunities. Think, open innovation across a close community of stakeholders. Using our open innovation software platform, clusters can identify industry-wide challenges, challenges that then can be addressed by the cluster through joint innovation projects or innovation working groups. Over time, Superclusters should be able to take on and solve “challenges that are too big for anyone of us”, in the words of an industry CEO.  

6. Magnets

Finally, strong Superclusters become magnets. Think of magnets that attract talent, capital, researchers, and companies into the region and cluster membership base. In Canada, the Digital Supercluster is already seeing a growing number of corporates and startups relocating into the greater Vancouver region to be a part of the rapidly developing Digital Supercluster. 

PULLING IT ALL TOGETHER

We are seeing a rising interest in and understanding of building a new breed of Innovation Clusters. Governments from Canada to Thailand already have Supercluster programs in place. The EU, the Nordics, South-East Asia, Latin America, and the Middle East are all in various stages of exploring their own Supercluster Initiatives.  

Whatever model and policy they may choose, they will all need to follow the six principles listed here to Build Successful Innovation Superclusters.  

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Building Transformational Capacity Through Experiential Learning

Five years ago we attended our first Drucker Forum, aptly titled The Great Transformation. Little did we know at the time that the experiences from the Forum would result in the creation of Transform! a powerful experiential learning simulation, potentially changing how we teach, train and build deep transformational capacities.  

OSLO, NOVEMBER 13, 2019

“No, that could never happen”, shouted one of the participants.
“Well, actually it could”, sighted her CFO teammate.  

The pair, acting as management of case company Rail1 – a European railway operator, was just getting acquired.  

“We have partnered with Juppz, secured a 500M funding structure, and can now execute a hostile take-over”, said the deal manager, CFO of Flight – the electric scooter company, as he officially announced the deal to the table. Working closely with the ride-sharing company Juppz, Flight was now implementing its innovation strategy; having recently shifted from a collaborative partner-approach to the more aggressively buy-strategy.  

Having previously acquired CarWagon; Rail1 had built a broad business model portfolio beyond its legacy core business of operating trains in Europe, secured financing for new ventures and hit a 23,3BN market cap, all on its way to transform into a mobility winner of the future.  

Collectively, the four companies were battling it out in a highly competitive mobility arena. Their mission: transform a legacy company stuck with two low-margin business models into a thriving company with a healthy mix of business models across the Core-Growth-Explore framework. At the same time, build an innovation strategy, secure financing, lay a transformation roadmap, deal with Booms and Busts, all while making 100’s of micro-decisions effectively replacing any well-planned strategy with split-second decisions. What could possibly go wrong?  

TEACHING SMART PEOPLE HOW TO LEARN

The group, a part of Open Innovation Lab Norway, was running Transform! a highly engaging learning simulation, designed to help people learn how to build transformational companies and execute successful transformation strategies. Transform! is built on the research and development work by Christian Rangen and the team at Engage // Innovate and Strategy Tools.  

Built on top of eight visual strategy tools, Transform! is designed to be a learning and development simulation to teach people and companies how to build transformational capacities. In essence, it aims to solve the problem of teaching smart people how to learn and develop a stronger absorptive capacity in light of ever-faster industry shifts.  

LEARNING THROUGH SIMULATION

Inspired by the work of Swedish Professors Johan Roos (Lego Serious Play) and Karl Erik Sveiby, coupled with the latest thinking in strategy from Rita McGrath, Scott D. Anthony, Roger L. Martin, Henry Chesbrough, Alex Osterwalder, Yves Pigneur, Gary Hamel and Clay Christensen, the Transform! simulation is designed to be a highly engaging and powerful learning experience.  

By combining new strategy thinking, new visual strategy tools, and a table-based, role-based simulation, the participants combine a number of different learning elements into a single multi-faceted learning experience. 

Having run close to 85 sessions across three different simulators over the past eleven months, it has become clear to us exactly how powerful the power of simulation-based learning can be. From Board members, CEOs, Policymakers, Professors, innovation agencies; every single participant quickly get absorbed into the competitive dynamics of strategy simulation. Designed to transfer new learning, new tools, and a new strategy mindset, the simulation teaches strategy, innovation, transformation, finance, corporate venturing, decision-making and mental models in one single session. “The Transform simulation helped us explore and uncover some big strategic mental models to our company, said one Danish CFO we worked with on a large scale transformation strategy.   

THE TRANSFORMATION GAP

“On average, 2,3, maybe” summarized one of the participants in Oslo. 
The group of eight has just answered the two key questions. 
“Over the next ten years, how significant a transformation will we require?” 
As a group, they averaged 7,9 out of 10, with executives from larger firms tending towards 9 and 10.  

The follow-up question, however, got a different response. 
On “how ready are we for this transformation?” the group barely scored 2,3 out of 10. A number that drew a loud sigh from the participants.  

“What does this mean”, I asked.
“It’s the transformation gap”, came the instant reply from the corporate innovation manager. 
“It is the massive gap between our aspirations, our intellectual need for transformation in light of external industry shifts, and our internal ability, our capability to actually do it”, she continued, to the active nodding of several of her group members, and a not too concealed tone of frustration in her voice.   

The Transformation Gap. The gap between our fully understood need for large-scale transformation vs. our ability, our organizational capacity for transformation. We find the Transformation Gap virtually everywhere we go. In fact, it has been a passion, a driver and a source of deep motivation for us over the past seven years, trying to better understand this gap. Is has fueled questions, conversations, and research across countries, industries and organizational hierarchies.  

Today, with the first year of Transform! experiences behind us, we believe hands-on experiential learning can significantly close this Transformation Gap. The a-ha moments, the deep individual reflections, the new tools, the group-wide insights, and new collective thinking absorbed through the gamification mode and the many new conversations that start during a simulation, only to carry over into real-life company context all combine into building company-wide transformational capacities. 

BACK TO VIENNA

Professor Rita McGrath once said, “We are working with outdated tools & assumptions”. Referring to how most companies work on strategy, McGrath asks if companies are set up to work, successfully on strategy in the light of a new strategy paradigm.  

We share McGrath’s concern. From energy, mobility, technology, finance, healthcare, we see industries shift into arenas and companies facing a brand new strategy landscape. Traditional strategic thinking is no longer sufficient. Competing on transformation will be the new rally cry.  

The conversations that started at the Drucker Forum in 2014 still resonates, perhaps as important and relevant as ever. The insights and inspiration we gained in 2014 have fueled new strategy tools, insights and transformation programs. Now, as we prepare to depart for Vienna yet again, we look forward to a new set of conversations, this time on how companies can master new ecosystems and continue to accelerate their transformation.

Surely, we will need it. 

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Lego Serious Play and Strategy: An Interview with Co-Inventor Johan Roos

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5 Mistakes to Avoid When Planning Your Innovation Program: An Interview with Harvey Wade

In 2004, an e-commerce company engineer named Charlie Ward submitted an idea to the company’s digital employee suggestion box.

He proposed a fast-shipping service club where members could gorge on as many online purchases as they liked and get their goods delivered at record speed – all for a fixed monthly fee.

Other employees really liked the idea and started responding to it. The action caught the CEO’s attention, who pounced on the idea and set an executive team working on it.

At the first work session in November 2004, he told the team that they could have any resources they needed to make the idea a reality by their next earnings report, a mere three months away.

They launched the service in February 2005, with naysayers and skeptics speculating about the loss the company would incur with such a high-cost service.

Amazon Prime is today one of the biggest drivers of Amazon’s growth. There are about 90 million paying Amazon Prime subscribers in the US today who spend more than four times what non-members spend. According to some estimates, Prime accounts for 60% of the total dollar value of all goods sold on Amazon.

 

 

Planning a Successful Innovation Program

As companies realize the importance of innovation as a future driver of business, more and more leaders are setting up innovation programs that they hope will lead them to the next big thing.

However, these programs often fall short – not because of a lack of ideas, but because they’re often vague and haphazardly put together.

Charlie Ward’s little idea would not have seen the success it has today if it didn’t have a conducive environment to thrive in.

So what are the biggest pitfalls that companies often face when they plan an innovation program?

We spoke to a close friend of Engage // Innovate’s and experienced innovation leader Harvey Wade about the lessons he’s learned from the numerous innovation and change programs he has led.

Five Mistakes to Avoid When Planning Your Next Innovation Program

Having kick-started innovation programs across some of the world’s largest companies like Citibank, J&J, Cisco and Allianz, Harvey has seen his fair share of flops and has through experience, uncovered the ingredients to an innovation program which yields actual results.

According to Harvey, here are top five mistakes you need to steer clear of:

1. Leaders leaving innovation to others

If innovation is not on the top of the boardroom agenda, it’s not going to happen. As innovation is too fragile to survive on its own in the beginning, it needs a leader to visibly drive it.

In my experience, when a leader or CEO is personally involved in driving an innovation effort, innovation will be given time in the boardroom and leader discussions, as well as awareness and the lever to get action when needed; it makes them accountable.

I’ve worked with organizations that try to run an innovation program which is driven by middle management or lower down in the organization. While some of them achieve good results, they very rarely get to the point of a transformational success, which in my opinion can happen if the top leadership are involved. To drive a sustainable approach to innovation that keeps your company on the leading edge, you’ll absolutely need the buy-in and personal sponsorship of those at the top.

 

To-Do: If your leaders are on board your innovation program, consider how you can make them more visible and think about what role you need them to play. If they’re not involved, you’ll need to understand why that is and start to consider what will get them involved. You know your leaders best and decide the best way to get them invested in the program – be it through board influence, external advice, or some good old shock treatment of what will happen if they don’t support innovation.

 

2. Thinking innovation is just the outcome

Rather, it’s an enabler of a better performing organization.

You often hear people saying, “I need ideas, I need innovation!”

But why do you need that? Because you need a better performing business, or maybe you’ve got problems that you need to solve, but don’t know how.

As soon as innovation becomes the outcome, what you’ll get is what I like to call “an island of misfit toys”. You’ll get all these really cool things done, but you don’t quite know whether they’re aligned to creating a better performing organization.

It’s harder for people to get involved in “random” innovation, because they’re thinking about what the strategic objectives of the business are, while innovation is running on a separate track.

Innovation should not be the goal, but the enabler to drive more business and organizational value, and enable you to be in a better place as an organization than where you were without innovation. It must be aligned to your organization’s strategic objectives to be truly embedded.

 

To-Do: Understand what your organization is looking to achieve, identify the gaps where they’re either not performing or don’t know how to close. Ensure innovation aligns with those strategic imperatives and the stakeholders of those imperatives. Start focusing on innovating around those needs and problems, and consider how you can bring that back to the business.

 

3. Thinking strategy will trump culture

Clients often come to me saying that they have a fantastic innovation strategy. Then you ask, “so what’s your innovation culture like?”

Answers usually range from “it’s OK, but nothing special,” to, “oh, it’s really negative and we have low engagement.” Some even say, “we’ve just gone through some restructuring, it’s tough at the moment.”

You can’t ignore culture because innovation is all about people. They need to care about the organization and its purpose to want to make it better.

If your company has a culture where the employees aren’t really invested or engaged, why would they dedicate their time and effort towards an innovation initiative that is looking to make the company better?

If you have a workplace culture where employees are overworked, feel unappreciated and not encouraged to challenge the status quo, they will not be responsive to your requests to get involved in the innovation program.

If you’ve got a culture where everything revolves around politics, you’ll have employees who are more concerned with climbing up the career ladder than explore something like innovation.

To-Do: Culture change is hard because it means changing behaviors and habits. It’s going to be hard, so you’ll need to start small. Consider your program and what behaviors are needed to bring greater success to your innovation program. Taking that one behavior, how could people change this, what would encourage or incentivize them to make a change and stick to it. You may have to talk about the big picture, or talk about who else is doing it, why it’s needed. You may need to find people that are displaying the desired behavior, and celebrate them. It will take time, but start somewhere.

 

4. Not making time or space for innovation

Organisations can normally find the budget for innovation projects, but what they struggle with is finding the resources to make it happen.

Everyone’s opening labs and nice spaces where people can “innovate”, and of course the right physical environment is important and good to have, but it’s essential to give people the time to work on innovative experiments.

Taking someone away from their day job will probably cost you in the short term, but to have a future, you have to invest in it. This investment will pay off in the long run. Consider the risk of not doing anything versus trying innovation ideas. It might be that there’s more of an opportunity to drive change when you actually invest the time.

Many of the world’s leading companies subscribe to this belief. 3M employees get 15% of their work time driving experimental projects that they’re really interested in, which in turn often lead to new products. Cisco’s internal innovation program – the Innovate Everywhere Challenge – awards the winners with mentorship, access to Cisco’s global Innovation Centers and labs, Cisco partnership in their venture, funds, and time off to work on their project.

 

To-Do: You have to not just find resources, but develop ways to create time for innovation to happen beyond just the voluntary giving of time, otherwise the day-job always gets in the way. Consider how much you can invest in disruptive innovation, maybe that’s 5% or 10%, and then find ways of giving both money and time to that desire. There is always a risk involved, so consider it the cost of future-proofing your business, the same way you train employees to be better at their job.

 

5. Not creating individual performance metrics that encourage individuals to support and practice innovation

When an employee does good work at their day job, they usually get a bonus and maybe even a raise. Whereas in some innovation projects that I’ve experienced, people normally don’t have a well-defined reward. You usually get a pat on the back and people telling you you’ve done a good job. You may get a raise or a big bonus if lucky, but it’s often not structured and people don’t know for certain that their efforts in innovation will feed into their overall performance.

This is why people always focus on their day jobs, because that’s where they will be recognized and rewarded for good work. People are generally supportive of innovation, but are hesitant to get involved because they don’t feel they can invest in it if it will cause them to perform worse in their actual job. Looking at this in another way, if people can get a fantastic job review and a large bonus while completely ignoring innovation, you’ve got a problem that needs to be fixed.

Making this change is going to take careful navigation of the organisation and you may need to invest in a flak jacket! Changing personal performance metrics is not going to be easy, which takes you back to ensuring you have leadership buy-in and backing before you start on this journey.

 

To-Do: This is not going to be easy, so start small. In terms of KPIs, instead of the usual performance metrics, think about bringing in an improvement metric. This starts to create a conducive environment for innovation to thrive. For example, asking people to show how they have supported someone in their team who had an idea, how they got involved, helped them make it better and most importantly, supported the implementation. As this begins to get accepted, step it up to the next level, and don’t forget to get HR involved and on–side!

 

Questions? Reach out to Harvey Wade on Twitter, LinkedIn, or his company website.

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Sources: 

https://www.seattletimes.com/business/amazon/10-years-later-amazon-celebrates-primes-triumph/

https://www.forbes.com/sites/louiscolumbus/2018/03/04/10-charts-that-will-change-your-perspective-of-amazon-primes-growth/#7493c8563fee

https://www.fastcompany.com/3067455/why-amazon-is-the-worlds-most-innovative-company-of-2017

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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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Industry Leaders Weigh in on Strategy Traps for 2018

Since we’ve published Five Strategy Traps for 2018, we’ve gotten many nods in agreement, along with comments and messages from leaders across the globe telling us that the traps were only “all too familiar” to them.

The big question is really, how do we change it? How do we transform our organizations and those of our clients into something more agile and flexible? How can we radically rethink and rework how large organizations act and respond in the face of industry shifts?

To understand the strategy traps leaders are facing, and how they’re overcoming them, we reached out to a few industry experts for their take on the issue. Those interviewed included a strategy analyst in the energy industry, a finance executive in the aviation industry, and a professor in management and future societies.

Here are some of their insights around strategy traps and how we can steer clear of them:

1. Alignment is crucial

For a new innovative strategy to see success, alignment across the entire company and the Board is perhaps one of the key drivers.

“Misalignment between Executive Management and Owners / Board often leads to insufficient commitment to the new innovative strategy from the top, while underestimating the level of strategy implementation required will lead to a lack of commitment from the employees.” says Niels J. Kindberg, EVP and CFO of Jet Time.

There also needs to be an alignment of ambition.

“A new innovative strategy will not be sustainable if the Executive Management is significantly more ambitious than the Owners / Board, as this will lead to it being rejected by the Owners / Board, or fail during implementation.

Likewise, a new innovative strategy is not sustainable if the employees do not understand and adopt the new strategy.”

Recommendation:

Kindberg suggests a thorough “due diligence” and alignment of expectations with Owners / Board be done before strategy development. Furthermore, the strategy should be communicated as an evolution rather than a revolution before strategy decision (approval / rejection) by Owners / Board. Stakeholder engagement should be established at all levels before strategy implementation.

 

2. Comfort zones kill good strategy

“The evolution of homosapiens dictate the human mind to evaluate the future and new ideas / changes based on known history and past experiences, which makes it natural for the human mind to have a skeptical approach to fast and radical changes.” says Kindberg.

“For example, if I deviate from past experiences, I am at risk of being eaten / killed by the lion. Hence, the human mind is struggling to grasp the faster and bigger changes we will be experiencing going forward, consequently ignoring the risk related to not accepting new ideas and not making radical changes. And so, the human mind is a strategy trap in itself and the question is: how can human behavior be re-programmed to embrace and adopt ever faster and bigger changes?”

Recommendation:

A strategy analyst from the energy industry recommends that “CEOs should get out of their comfort zone, force themselves to have conversations with people outside of their bubble and to examine their company and leadership from the outside-in.”

 

3. Maintain balance between experience and the unknown

“We have to grow our innovation muscles”, says Leif Edvinsson, Swedish organization theorist, professor and consultant known for his work on intellectual capital and knowledge management.
“Most evolution is too linear, and most people are afraid of moving into the unknown, however, innovation is much like surfing. You have to get on the wave and can never go straight, you have to be flexible and adapt to the rapidly changing conditions,”.

Recommendation

Edvinsson believes that building a strong innovation strategy relates strongly to maintaining a balance. A balance between the boardroom and the executives, between fear and courageous experimentation.  
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Read Five Strategy Traps for 2018.

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