Engage // Innovate co-founder Christian Rangen recently had the pleasure to sit down for a conversation with Columbia Business School professor and globally-recognized expert on strategy, innovation and growth Rita McGrath, to discuss her latest work on strategic inflection points.

As a long-time member of Engage // Innovate’s informal Advisory Board, Rita’s thinking has long been an influential and inspirational force.

In the short, but very interesting conversation, the two strategy experts delved into innovation as a repeatable process, how companies should react to the early warning signs of impending industry shifts, as well as Rita’s upcoming Executive Strategy Masterclass happening in Stavanger on May 12.

If you would like to join the upcoming Masterclass — request your invitation here or learn more about the Masterclass here.

You can listen to the talk in the podcast below or read the full transcript here.

Five key takeaways:

1. How companies can think about getting into new areas

Rita’s latest research deals with industry shifts and portfolio thinking, a subject highly relevant to the declining oil and gas industry in Norway. As Norwegian executives struggle to move beyond the oil and gas industry, the first step is to recognize that what worked in the past might not be what works in the future.

Companies need to be thinking about getting into new areas.

“To me, there are two vectors you can choose. You can choose to operate from a capability platform, or you can choose to operate around a particular customer need that you’re serving.” said Rita.

Statoil, for example, could choose to operate from deep capabilities in undersea operations and other complex technical capabilities they’ve built over the last decades, or make the bolder move of defining themselves in the energy space and explore options they’ve never traditionally had the capabilities in.

Rita pointed out that Fujifilm was a good example of a company that started expanding their portfolio by operating from the capability platform.

“They decided to say, ‘hey, you know we’re terrific at chemicals, we’re terrific at imaging, so let’s find places where those capabilities come into play.'”

Today, Fujifilm’s efforts in diversification has brought them into cosmetics, medical imaging, and even services for the pharmaceutical industry. The company is pursuing a variety of different activities all linked at its core to their central capabilities.

2. Look outside your industry to get started with reinvention

When asked for a beginner’s guide for management teams that need to find reinvention, Rita advised companies not to stay within their own little bubble.

“I think there’s a need to really immerse yourself outside of your immediate context and get a sense of what’s going on in the world that may or may not have anything to do with what you’re looking at”.

How does one do this? There are a number of ways.

“You can immerse yourself in an executive program, come to a seminar — like the one we’re planning, you could go to conferences from industries different from your own.”

Rita believes that the key is to get away from the daily grind, your emails and the day-to-day, so you can really get a big picture perspective of what could be going on.

“When you make the relatively small effort — take a couple of days, go to a non-related industry conference or have conversations with people who don’t touch what you normally touch, it’s surprising how quickly the insights begin to emerge,” she mused.

3. Pay attention to the early warning signs of industry shifts

When Rita looked into the architecture behind strategic inflection points, the typical weak signals that could’ve alerted businesses in advance often go unnoticed.

“The weak signals are when something happens that creates a 10x shift in the envelope that contains your industry. If you think about any kind of sector or industry or company, they have certain constraints in their environment that are present when they’re born.” said Rita.

We’ll take the newspaper industry as an example.

Back in the day, the main constraints in the newspaper industry were things like how many contracts they had, how many trucks they needed, how many newsstands they had, etc.

Digitalization came along and transformed all these existing constraints by a factor of 10 or 20.

The changes don’t happen instantly, and they take a long time to unfold, but only the companies that prepare for them in that time can come out of the 10x shift triumphant.

Rita then pointed out Amazon as an example.

Amazon sold its first book online back in 1995. That same year, a reporter from Fortune pointed out that the internet could potentially change all the different constraints across several industries like publishing, retail and distribution.

The data were there. But nobody in retail was paying attention.

Rita believes that businesses should look out for possible industry shifts and plan ahead instead of reacting when it’s upon their doorstep.

“When you see something way off in the distance when you’re driving, you can adjust your trajectory with a relatively small shift of the steering wheel, but if you wait until it’s right upon you, you’re nearly at it. You’ll have to make that steering wheel jerk significantly to avoid the obstacle. And that’s the way to think about early warning signs.” 

4. Stepping up on the Innovation Maturity Scale

Rita has developed a tool called the Innovation Maturity Scale to help companies see where they are in terms of innovation proficiency.

The scale goes from 1, where companies are hostile towards innovation, up to 8, where the leadership is committed to innovation at all levels.

Compared to the innovation maturity Rita sees during her work in California, she believes that most organizations are at a 2 or a 3 on the Innovation Maturity Scale — meaning that they have the desire to improve and innovate, but have no full-on support.

“They’ve got pockets of innovation, there are champions that kind of comes and goes. They take the big trip out to Silicon Valley, have a picture taken next to the Facebook sign, but they don’t really have it embedded as an actual proficiency in the organization,”Rita revealed.

Norwegian companies are not that different, Christian mused.

They are great at initiating innovation, but when it comes to really organizing for innovation as a repeatable process, most Norwegian companies fall short, save for a few.

“Telenor is a good example, I know Rita you have been writing about Schibsted as a good example. Kongsberg is a good example. But overall, there’s a lot of work to be done here,” Christian explained.

5. Businesses should invest resources across Three Horizons

Mature companies often face declining growth as innovation slows down. Companies that want to keep growing must not only focus on their existing business models, but also potential growth areas in the future.

“I’m a big believer that you have to be investing your resources in three kinds of initiatives. One is to keep your core business as healthy as you can, which is challenging if it’s in decline or flat. The second is to think about what you’re going to launch that is going to be part of your next core business. The third is how do you invest in strategic options, or early investments that give you the right, but not the obligation to make a significant investment going forward,” Rita said.

There are strategy tools that can help frame this, including Strategy Intro, The Three Horizons Framework, and the Three Levels of Business Models.

Both Rita McGrath and Christian Rangen will be unveiling new strategy tools at the upcoming Rita McGrath Strategy Masterclass in Stavanger. Request your invite by filling in the form below.

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Work on your strategy with Rita McGrath on her upcoming visit to Stavanger. Join us for the full-day senior executive strategy Masterclass on May 12, 2017.

This is an invite-only Masterclass. Fill in the short form below to request your invite:

The Gist of It for Busy Execs:

  • The Strategic Innovation Canvas is a simple, easy-to-use tool to collaborate on, communicate and develop future-oriented strategy.
  • The Strategic Innovation Canvas is built upon the theories of Clayton Christensen (three types of innovation) and Rita McGrath (discovery-driven growth and short-term competitive advantages).
  • Companies that use the canvas like Statoil, Reckitt Benckiser, and Biotage find that it allows them to shape a very different future for their organization.

Christian Rangen — co-founder of Strategy Tools

 

It’s now been 5 years since the early development of the Strategic Innovation Canvas. The strategy tool has since been put to use in hundreds of companies.

We decided to take a look back at history and sat down with the original strategy tool designer Christian Rangen with a few questions.

1. What can the Strategic Innovation Canvas do for my company?

 

The single biggest impact the Strategic Innovation Canvas has is helping management teams and strategists to create a more future-oriented strategy.

Most companies are incredibly focused on operations and the status quo. As the pace of innovation and disruption is picking up worldwide, we believe companies need better tools for their future.

This has been the driving idea behind Strategy Tools since our early research days back in 2011. We simply must build better strategy tools and the Strategic Innovation Canvas is but one small contribution to this global challenge.

The Strategic Innovation Canvas gives you a strategic framework for developing an options-driven innovation portfolio. This builds heavily on one of our advisory board members Rita McGrath’s long-time work on discovery-driven growth and short-term competitive advantages.

Companies that use the tool like Statoil, Reckitt Benckiser, and Biotage, realize that they’re able to shape a very different future for their company simply by using a different strategy tool.  

 

The Strategic Innovation Canvas – a great tool to engage everyone in shaping strategy | Reckitt Benckiser workshop, Italy

 

2. Where did the canvas originate from?

 

Early during our research, we found a repetitive pattern of thinking in threes.

Again and again we saw this becoming very apparent in the field of strategy.

One example is the old McKinsey research — The Three Horizons of Growth, where companies need to think about the short term, medium term and the long term at the same time.

Equally Clayton Christensen talks about three in terms of sustaining innovation, improving innovation, and market-creating innovations. But we realized that we didn’t really have any good future-oriented tools that brought this level of “three” into practical use.

Working with a number of companies including our good friends at Statoil, we started sketching out and prototyping the first designs of the Strategic Innovation Canvas. Using highly innovative companies like Amazon as case studies, we were able to communicate and articulate what this meant in practice.

Our goal in the early days was really to build a simple, easy-to-use visual tool that came out of fairly advanced research and understanding of how to shape strategy for the future. And i hope we have achieved that fairly well.

 

With the Strategic Innovation Canvas, it’s easy to collaborate on shaping the strategy of your company | RB using the SIC in a workshop

 

3. How was the early development work?

 

The early development work built on a lot of design workshops with the executives from many industries.

The tool was largely built through workshops and testing with executives responsible for designing and shaping strategy across many different industries.

This has not been a primarily academic research, but really a genuine co-creation with executives around the world.

Following the very early design phase, we quickly took our work on the road and presented the early designs at various innovation conferences, including Copenhagen, Cannes, and Vienna. Again the feedback that we got from the larger innovation community helped confirm our earlier experiences and helped shape this tool further.

 

The Strategic Innovation Canvas works seamlessly with other visual strategy tools | Tenaga Nasional workshop, Malaysia

 

4. What’s been your biggest learning?

 

One of the effects of working with the tool is that management teams, strategy teams quickly realize that most of their energy and intellect goes into core business and operational issues.

Simply working with the tool forces you and enables you to design a different strategy for the future.

Again and again we see management teams surprise themselves when they realized how operationally focused they have become, and they simply do not have a proper strategy and innovation portfolio in place.

My biggest learning has been that simply by visualizing on this and starting work on it, companies quickly adapt and start developing better strategic thinking for themselves.

 

With the right facilitation, 300 people can work on shaping company strategy at the same time. | Biotage workshop, Spain.


5. How do you see companies using the tool? What is the best practice when using the Strategic Innovation Canvas?

 

Best practice is really when the tool becomes internalized by leaders and strategists at all levels.

This might take time, this might require some training sessions, but once leadership starts using the tool for their own progress, once the strategy team starts using the tool in internal sessions, once mid-level managers pull it out to start to discussing a more ambitious strategy, that’s when the tool really comes to effect.

The Strategic Innovation Canvas is not meant for a one-time, one-session use, but really it is a deep strategic tool that should be embedded into the organizational DNA.

 

[Case Study: How Statoil used the Strategic Innovation Canvas to get from idea to prototype in only weeks]

One of the teams from Biotage working on the Strategic Innovation Canvas

 

6. What do you see next for the Strategic Innovation Canvas?

 

Moving forward, we see three things.

One, we see an increasing number of companies putting it to use.

Two, we see more and more strategy and innovation teams internalizing it and using it in their everyday work.

Three, we’re looking at ways to bring this into a software solution.

We are working on our book and our writing in general, to publish more content, insights, and case studies on how our strategy tools are being put to use. This has been work in progress since 2012, and we’re still trying to find time to make more of that happen.

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Get your own copy of the Strategic Innovation Canvas, free.

 

Grow your company beyond your core business. Book your own in-house workshop now. 

 

Sri Lanka is a nation in transformation. Emerging from a 30-year civil war from 2009, the country has been playing catch-up on business development and innovation. It’s been 7 years, and Sri Lanka is running to make up for lost time and reach its full potential.

The result? An impressive 6.4% economic growth in recent years.

With its goal to move from a lower middle income country to a high income country in the next two decades, Sri Lanka’s government has implemented multiple reforms and set in place many business-friendly policies to improve the business environment. The economy is on the rebound, slowly but steadily.

 

Strategic Innovation for Sri Lankan Firms

The government is now looking to build a knowledge-based economy to lay the groundwork for the future of the country.

Their biggest challenge at the moment, according to PwC’s Academy manager Nuwan Dishan, is to ignite the entrepreneurial spirit in both big businesses and small.

“Companies aren’t really sure how to implement an innovation department and go beyond R&D. How do you come up with new business models, new strategies, new products and services to revolutionize the industry?” he said in a recent interview with us.

Companies in Sri Lanka, like many others across the globe, struggle with managing innovation and transformation.

“We have many good ideas from individuals, entrepreneurs and startups. In fact, some of our local companies have made it to the global level. As an economy we need more of these companies dominating local, regional and ultimately global markets with strong brands.” Dishan revealed.

The biggest challenge most Sri Lankan entrepreneurs face is nurturing the good ideas into reality, into a commercially viable product or service through new business models that disrupt the market.

“In order to do that I think insights are critical not only at a local level but also at global level. Rome was not built in one day, similarly this would take time. Collaborations such as Engage // Innovate and PwC’s Academy will help companies get new insights to think in different angles.” he explained.

 

Last year, PwC’s Academy reached out to Engage//Innovate to run a Strategy Tools for Business Model Innovation workshop for some of the top business leaders in Sri Lanka.

Engage//Innovate founder Christian Rangen flew over from cold and gloomy Norway into the pulsating heat of Sri Lanka, and facilitated two intense days of learning in Colombo.

Participants deep dived into the current innovation best practices and strategies. They looked at updated, real world case studies and got hands-on with the strategy tools that’ll help frame their innovation strategy.

 

Christian Rangen’s Strategy Tools for Business Model Innovation Workshop in Sri Lanka with PwC

 

In just two days, they have laid the foundation for strategy and transformation within their companies.

Many of the participants found the strategy workshop so enlightening and inspiring that Engage//Innovate has once again been invited to run a new workshop, happening from Mar 8-9, 2017. 

 

“This programme has been quite fantastic. We thank PwC’s Academy because Christian has made us think in new dimensions in terms of innovating our strategy for the progress of our company. Our thinking has been changed after attending this programme.”
— Thilanka De Zoysa, Managing Director, Convenience Foods Lanka PLC.

 

Creating the future for Sri Lanka | Engage // Innovate Workshop with PwC’s Academy in 2016

 

Improving the Sri Lankan Economy through Innovation

With Sri Lanka’s goal to join the ranks of the high income countries — you need significant innovation.

Development of technology is an important measure for innovation, and as of 2015, Sri Lanka’s tech exports stood at just 1%.

In the Global Innovation Index, Sri Lanka ranked 91 out of 128 countries. It isn’t bad for a country that had battled 30 years of civil unrest, but it reflects the amount of work Sri Lanka has to do in order to secure their place in the future.

Engage//Innovate and PWC’s Academy play just a tiny role in the grand scale of things, but the abounding interest in the innovation programs is a reflection of the country’s voracity in striving towards change.

 

Connecting New Growth Opportunities between Norway and Sri Lanka

Sri Lanka is a potentially huge growth market for Norway in terms of renewable energy, wind, and fish-farming. There can be a lot to gain for businesses of both countries to work together, both in knowledge and resources.

“Norway is one of the world leaders in terms of energy and innovation. It is one of the innovation hubs in Europe. Norway has a lot to share with Sri Lanka,” said Dishan.

Engage//Innovate’s work in Sri Lanka is just beginning. We are looking forward to deeper, more impactful collaboration in the near future.

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If you’re in Sri Lanka and want to cement your place in the future, register for the March 2017 workshop by clicking the button below. 

 

We travel worldwide to run workshops and consult with companies. Interested in getting a conversation started? 

Our resident innovation guru Christian Rangen is always going on about how important it is to ask the right questions.

His favorite thing to do whenever we sit down for a meeting, is to ask provocative questions.

While they weren’t the easiest questions to answer, they helped re-frame the way we thought and pushed us to see things from a different perspective.

Questions are incredibly powerful.

Think about it, asking questions led to the world’s greatest discoveries and inventions:

“Why did the apple fall from the tree?”
– Isaac Newton

“What would the world look like if I rode on a beam of light?”
– Albert Einstein

Opportunities to innovate are around us every minute of the day. The first important question is — are we even looking out for them?

Here are 30 questions to uncover the innovation opportunities you might not have seen before:

 

Capitalizing on Problems

  • What other problems do our customers face that aren’t getting solved right now?
  • Can we solve these problems for them?
  • What problems do we currently have that we could turn into an opportunity?
  • Why are our current unhappy customers unhappy?

Outperforming the Competition

  • Where is the market leader weakest?
  • What can we do to be better than that?
  • If there were a new competitor in our industry, what would they do to be different?
  • Who are our unlikely competitors in the future?

Perfecting the Processes

  • Which parts of our process flow would we like to eliminate?
  • Why are we doing this process in the first place?
  • What if we did this backwards?
  • Can we remove the constraints when managing our workforce?
  • If we had a magic wand, what would we change about our product / service / process?
  • What can we do an hour a day to make our business better in 5 years?

Prepping for Unexpected Surprises

  • What would happen if someone started giving our service / product for free?
  • How can we start giving our product for free and still make money?
  • What new legislation could put our business in danger?
  • What new technology could make our product obsolete?
  • What kind of business model could kill our business?

Thinking Beyond Today

  • What other markets could we sell our products / services in?
  • How should we go about selling our products / services in other markets?
  • How can we tweak our current product / service to appeal to a new market?
  • How can we make $xxx,xxx (insert ambitious sum) an hour?
  • Could we turn our services into products / products into services?
  • Could we start selling our internal resources as a service or product?
  • How can we seize the white space of unexplored markets and customers?
  • How can we innovate our management and increase the effect of our leaders?
  • Can we change our cost structure?
  • How can we double our revenue streams without adding cost?
  • Are we looking far enough ahead to redesign the competitive field?
  • Are there new ways to use the technology and capabilities that we currently have?
  • What would Elon Musk, Mark Zuckerberg, Jeff Bezos or a visionary leader we look up to do?

We could come up with 100 more questions, but we’d like to hear yours! Leave them in the comments section below.

The best thing to do in business is to learn from the mistakes of others. Here are three major lessons learned from some of the biggest business blunders to ever occur:

Mistake #1: Ignoring their own innovations

We all know Xerox, they’re world famous for their document solutions and services. Your company is probably using several of their machines. What you might not know is that they could’ve owned the entire computer industry if they had the foresight to.

Back in the day, in 1970 to be exact, Xerox set up the Palo Alto Research Center (PARC) to invent the technology of the future. They pumped it with funding and made sure the genius scientists working there had everything they needed to make magic.

And magic they made.

PARC invented what is widely argued to be the world’s first Personal Computer in 1973.

The Xerox Alto was awesome — it had an operating system, the world’s first Graphical User Interface (GUI — which enabled the then primitive computer screens to display information beyond just numbers and letters), and even a mouse to point towards stuff on the screen. To top it all off, this computer was linked to other PCs by a system they created called the ethernet.

No other machine had this magical combo at the time.

Remember, this was before Apple, Microsoft and the likes even came up with anything close to what Xerox had invented.

And what did Xerox do with this amazing breakthrough technology?

Nothing (much).

The higher ups didn’t quite get the revolutionary technology they had in their hands. They were more focused on their photocopiers that were the existing cash cow of the company.

According to former PARC researcher Larry Tessler,

“the company management at the East Coast of the USA did not (care a straw for) the PARC’s research results unless they were directly involved with photocopiers.”

Someone else was there to capitalize from this technology though.

Steve Jobs was invited to take a tour of the PARC facility in 1979. And during this tour they were introduced to the Xerox Alto and all its (at the time) jaw-dropping tech.

As Larry Tesler demonstrated how their “mouse” moves the cursor on the screen and clicked on icons, opened and closed “windows”, wrote emails to other people in PARC, Steve Jobs gradually got more and more excited.

In Steve Jobs’ own words:

“Why aren’t you doing anything with this? This is the greatest thing. This is revolutionary!”

He took this inspiration back to Apple and the rest, as you know, was history.

 

Mistake #2: Not looking beyond their existing business models

Image source: gizmodo.com

In the early 2000s, Blockbuster was the kingpin of the video rental industry in the United States. At its prime in 2004, it had about 60,000 employees and over 2,000 stores in 25 countries.

Just a short 6 years later, Blockbuster filed for bankruptcy.

Why?

Here’s a fun little story about Blockbuster and Netflix you may have heard.

Back in 2000, Reed Hastings, founder of the then tiny, but thriving company called Netflix, met up with Blockbuster CEO John Antioco and his team.

Hastings suggested they join forces and work together. The deal was that Netflix would help run Blockbuster’s online service while Blockbuster helps run Netflix’s offline component (DVD rental through their large network of stores).

Netflix was laughed out of the room.

We don’t know what would’ve happened if they ended up partnering with Netflix. Would Netflix have grown into what they are today — a 61 billion dollar company? Not too sure.

What we do know is that Blockbuster had the funds, the expertise and the resources to launch their own subscription-based streaming service, but they didn’t.

They even got an offer to purchase Netflix for $50 million, but they didn’t.

Instead, they continued focusing on their existing business model — physical stores that rent out videos.

Because they ran such a large network of stores and employed so many people — they needed DVD rental prices that could sustain this. A significant chunk of their profit also came from late fees, something which doesn’t even exist on mail-order video rental services like Netflix.

It was OK when they were the main player, but when given a better alternative and better customer experience?

Netflix knew what the customer wanted — variety and convenience at a low price. They also accurately predicted the customer’s shifting priorities when online streaming became more accessible.

Because they saw that, they pivoted quickly from their mail-order business into an intuitive online platform for movie-watching.

At a time when similar sites were struggling to even display their content in a clean, functional manner, Netflix was sleek, sexy and even had a first-of-its-kind system which accurately recommended movies based on what your personal preferences and movie-consumption history.

Blockbuster’s CEO Antioco realized Netflix (and other services like it) was becoming a threat. And in 2004, he started taking action — he discontinued the late fees and pumped money into a digital platform which he hoped would pave the way to Blockbuster’s bright future.

The board of directors were not happy about the $400 million these moves would cost the company. They did not believe that growing an online business and finding new ways to satisfy customers were the right strategy to take.

In 2007, they fired Antioco and reinstated the late fees. They raised prices on Blockbuster’s digital platform and cut marketing on it despite its fast growth rate. Instead of innovating their business model, they chose to focus on their brick-and-mortar business.

Wrong move.

Today, the Blockbuster brand has mostly vanished from society, with a few straggling stores scattered in certain markets. Netflix, on the other hand, has become a household name.

In his reflections on this, Antioco wrote in the Harvard Business Review that he “firmly believed that if our online strategy had not been essentially abandoned, Blockbuster Online would have 10 million subscribers today, and we’d be rivaling Netflix for the leadership position in the internet downloading business.”

Quite possible, indeed.

 

Mistake #3: Not changing fast enough

Image source: REUTERS/Kacper Pempel

Just over a decade ago, Nokia defined the mobile phone industry. With a history that began in 1979, it innovated its way into making the most sought-after mobile phones in the market. It was the world’s no. 1 phone company and sold its billionth phone in 2005.

Shortly after, iPhones and Android came into the market. Suddenly, consumers weren’t looking at Nokia anymore for the latest and greatest in mobile tech.

When Android 1.0 was launched in 2008, Nokia’s Q3 profits plummeted by 30%. It went downhill from there.

Nokia realized a bit too late in the game that they needed something that could compete with the smartphones being produced by Apple, Blackberry and Samsung and the likes.

While Nokia continued releasing solid phones with top-notch build quality, the Symbian software that they used in their touch-enabled phones were sub-par compared to Apple and Android phones. Nokia was making great quality phones with amazing cameras, but lagged behind in user experience.

People found other mobile phone operating systems easier to use and so sales continued to dip.

In a last-ditch attempt to win the smartphone battle, Nokia partnered with Microsoft to produce phone that will run on a Windows OS.

The move sold quite a few phones, but it came too slow, and the end product was not good enough to compete with the likes of Apple and Android phones which still delivered a far superior user experience.

Nokia’s market share continued to decline and in 2014, Microsoft acquired Nokia’s mobile business for $7.2 billion.

Just for a bit of perspective, at the height of its times in 2000, Nokia’s market cap was hovering around $245 billion.

However, this is fortunately not the end of the story.

There’s talk of a comeback for Nokia in the first half of 2017, and this time finally, the phones will run on Android. Knowing Nokia’s hardware capabilities, I’m definitely looking forward to see what they come up with.

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What are the biggest mistakes you’ve made in business and what has that cost you? Share your lessons in the comments section below.

 

It’s always smart to learn from the successes and failures of others, and who better to learn from than some of the world’s biggest drivers of innovation?

Here are 10 pointers to always remember if you want to stay ahead in the innovation game:

1. Take notes

“Note taking is one of my favorite pastimes. I can’t tell you where I’d be if I hadn’t had a pen on hand to write down my ideas (or more importantly, other people’s) as soon as they came to me. Some of Virgin’s most successful companies have been born from random moments – if we hadn’t opened our notebooks, they would never have happened.”
— Richard Branson, Founder of Virgin Group [on a LinkedIn post].

The human brain is not infallible, and we’re quite prone to forgetting thoughts we were having just a second ago. Imagine the countless ideas you’ve cast away into the wind just because you did not bother to note them down!

To-Do

Jot down all your thoughts, discussions, and ideas. Use your phone (Evernote is a great free app for that) or do it like Branson in a notebook (the Dream Bigger book is perfect for this too). Don’t forget to take these ideas to the next level. It’s important to periodically run through these ideas and convert them into measurable goals for your company.

2. Think long term

“If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.”
— Jeff Bezos, CEO of Amazon [in an interview with Wired magazine]

The thing about planning a future for your company is that you have to be daring enough to plant seeds that will only materialize and blossom far ahead in the future.

If you plan only for the immediate future, you’re on the fast track to be disrupted.

To-Do

Instead of being enmeshed in the day-to-day grind, it’s important to set aside time for your long-term goals. Have ambitious ones far ahead into the future, and be sure to check in on them constantly. The Strategic Innovation Canvas is a great tool your team can use to develop a long-term innovation portfolio. Download it free here.

3. Have a diverse team

When the team’s all a bunch of scientists, it is best to have a peasant lead the way. His way of thinking is different. It’s easier to win if you have people seeing things from different perspectives.”
— Jack Ma, founder of Alibaba Group.

If you place a bunch of very similar people together, you’re probably not going to get very exciting results. Diverse teams — those with different genders, personalities, backgrounds, and different points of views — have been proven to perform better financially.

To-Do

Assemble your dream team of very different people, and ensure they’re not just different for diversity’s sake. Every innovation team needs different personalities to be effective — you’ll need a visionary, a doer, an analyst, and so forth.

[Take our quiz to see which type of innovator you are]

4. Fuel your innovations with data

“What begins with intuition is fueled by insights. If you’re lucky, these reinforce one another.” — Susan Wojcicki, CEO of YouTube.

Your entire team and company might believe your latest venture is the best idea on earth, but it isn’t so until it’s validated by cold hard data.

Google started off displaying 10 results per page because their founders randomly figured that it was the best number. They then asked users if they preferred having 10, 20, or 30 search results on one page. All the users picked 30. But when Google actually did some user tests, they found that pages with 10 results fared much better simply because it loaded faster.

The data showed them what opinions didn’t.

To-Do

Start collecting and objectively analyzing data on your innovations — start by testing them in a controlled environment to see if they work rather than pumping a lot of $$$ into something that will never take off.

5. Execute fast

“Vision without execution is hallucination.”
— Thomas Edison

We’ve run multiple innovation workshops over the years where our strategy tools have helped teams uncover fresh and possibly future-transforming ideas for their companies. They always leave the workshops psyched to bring these ideas to life.

However, what often happens when we check in on them is that these ideas get stuck on the back-burner as they dealt with their day-to-day work. A year on, and they’re completely forgotten.

Any of these ideas could’ve been the defining move that transforms the company’s future, but they stay just that — ideas.

As our advisory board member and globally-recognized expert on strategy and innovation Rita McGrath says, “generating ideas is not a problem. Incubation is. Acceleration is.”

To-Do

The key to strategic innovation is to execute, and execute fast. Set up a task force with specific roles and give the team leader the ownership to take this idea to market.

[Read this case study on how Statoil moves from idea to execution fast.]

6. Be comfortable being scared

“If you push through that feeling of being scared, that feeling of taking risks, really amazing things can happen.”
— Marissa Mayer, CEO of Yahoo!

Yep, strategic planning is scary. It’s basically you making decisions that may or may not fail, which may or may not hijack your entire career that you’ve built thus far. This is why so many top executives always go for the safer option of sitting on their existing business models instead of trying to challenge the status quo.

But the world’s best innovators embrace the fear of the unknown.

To-Do

Fight your fear of change. Remember, not doing anything is a much bigger risk than innovating. Remember Kodak?

7. Hire the right people


“Starting and growing a business is as much about the innovation, drive, and determination of the people behind it as the product they sell.”

— Elon Musk, CEO of SpaceX, Tesla Motors, co-founder of SolarCity and several other companies.

Successful companies get to where they are today because they get one crucial thing right — hiring great people who help them grow.

This is so important to Elon Musk that he actually interviews everyone at SpaceX personally. SpaceX is a 500-person company, so you can imagine the amount of interviews he’s sat through.

To-Do

Look for people aligned with your company’s purpose and culture. If your purpose is to innovate, and innovate successfully, it’s important to look for characteristics like curiosity and positivity, and an ability to work together with others without being a jerk.

8. Dare to fail

“The only way you are going to have success is to have lots of failures first.”
— Sergey Brin, Co-Founder of Google.

Google is always, always testing out new projects, and they have their fair share of failures.

A few that comes to mind would be Google+, Orkut, Google Wave, Google Video, and several that we can’t even remember the names of. That’s how often they’ve failed.

But with its many failures comes many successes as well, and today Google Maps, Gmail, Google Pixel, Google Translate, and loads more are mainstays in our lives.

You have to be willing to experiment and fail in order to hit the pots of gold.

To-Do

Set budget aside for several ambitious projects that might fail. The trick is to fail quickly and cheaply. If you have many projects ongoing, when one of them takes off, it might just become your brand new business model.

The Three Levels of Business Models is a great strategy tool to structure business models based on its risk profile. Download it free here.

9. Listen


“Find good advisers, mentors and team mates to discuss your thoughts and problem solve with. Make sure you listen to them. It doesn’t necessarily mean you always have to agree with them, but you do always have to be open to learning from others.”
— Hooi Ling Tan, co-founder of Grab, a technology company transforming the landscape of Southeast Asia’s taxi industry.

Just as it is important to base your actions on data, it is crucial that you tap into the insights of the smart people around you. There’s almost never a time where a huge success can be accounted to only one person — collaboration is king.

To-Do

It’s simple. Don’t tune out the differing opinions of those around you. Consider them before you cast them off simply because they’re not in line with yours.

10. Invest in innovation training

“You have to train people to be innovative in business.”
— Gary Hamel, one of the world’s most influential management experts and founder of Strategos.”

The ability to think outside the norm is not just an innate skill gifted innovators are born with. You too can pick it up by learning how to think like they do.

A good innovation workshop or program can help you build the right architecture within your team for strategy and innovation.

It’ll equip you with the strategy and innovation tools you need to frame your mindset when it comes to business model innovation and help you think like you’ve never thought before.

Trying to drive innovation in your company without a solid strategy or know-how might result in a game-changing invention if you’re lucky, but in most cases it is simply a recipe for wasted funds and quite possibly disaster.

To-Do

Upgrade your innovation toolbox and mindset. Read books, dive into real case studies of companies that have succeeded or failed, focus on building a framework that promotes innovation. If you don’t know how, get training.

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Have a personal favorite piece of advice from your own mentor? Share them in the comments section below!

The Innovation Pyramid is the strategy tool that we always use in our strategy and innovation workshops to establish the basics of innovation.

Developed through years of research by innovation experts Christian Rangen & Elisabeth Øvstebø, it is very effective in helping the teams develop a bigger picture of what innovation means in their respective companies.

The Innovation Pyramid breaks innovation down into 9 levels, from easiest to trickiest:

  1. Design & marketing innovation
  2. Product innovation
  3. Service innovation
  4. Markets, customers & channel innovation
  5. Technology innovation
  6. Process innovation
  7. Management innovation
  8. Business model innovation
  9. Industry innovation

We made a quick video to walk you through the different levels of The Innovation Pyramid:

How to Use The Innovation Pyramid

  1. Print The Innovation Pyramid (as large as you can), stick it on a whiteboard or wall before you begin your session with your team.
  2. Start from the top, and work your way down through the different levels. Or if you like, you can also work on what you enjoy first.
  3. Try to come up with ideas according to each level. Write these down on individual sticky notes.
  4. Stick small, logical steps go on the left of the pyramid, according to the levels.
  5. Stick the more radical, never-done-before ideas to the right of the pyramid, also according to the levels.
  6. Take a step back and admire the stream of ideas you’ve created.

The Innovation Pyramid will give you a rough framework to kickstart your innovation strategy. You can then move these ideas onto the Strategic Innovation Canvas to get the engine going.

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We’d love to hear how you’re using The Innovation Pyramid or any of our other tools. Comment and question away in the comments section below!

http://strategytoolsworldtour.com/sign-up' class='avia-button avia-color-theme-color avia-icon_select-no avia-size-x-large avia-position-center ' >Ask us about an in-house workshop today.

The word “innovation” might be an overused buzzword in today’s business world, but there’s no denying that fresh value-creating ideas can open up new revenue streams and customer bases which could determine the future of your company.

This is probably why so many companies are scrambling to build an innovative culture. Unfortunately, not all companies have got it down pat. According to a McKinsey survey, 84% of executives agree that innovation is important to their growth strategy, but only 6% are satisfied with their innovation performance.

Why? It’s simple. They haven’t found what works.

There are many factors which come into play when you want to innovate. But perhaps one of the biggest bedrocks for innovation is the right company culture.

So how does one create an innovative company culture?

The people who know best are of course the people who do it the most. We had a quick chat with industry leaders — both startups and the big boys — to see how they steer their companies towards innovation.

Read on to get insights from:

Brage Johansen, CEO of Zaptec — one of the most forward-looking Norwegian tech companies with a space program.

Rafiq Razali, CEO of Media Prima Digital — Malaysia’s largest fully-integrated media company.

Greg Paull, Co-Founder of R3 — a global consultancy which works with the world’s top marketers.

Shakira Shanaz, Head of Operations of KFit Group — Southeast Asia’s fastest growing online-to-offline platform.

Wai Hong Fong, Co-Founder of Storehub — a cloud-based retail management system that has revolutionized the retail market in Malaysia and beyond.

Jessica Li, Co-Founder of dahmakan — the fastest growing food tech startup in Southeast Asia.

 

 

brage johansenBrage Johansen

CEO

 Zaptec

Brage Johansen is the CEO of Zaptec, a Norwegian tech company which, in just 3 years, has revolutionized the global electric mobility industry with their patented portfolio of solutions for supercompact power electronics and transformers.

Having the ability to pack so much power in an incredibly tiny package has enabled Zaptec to explore any industry where power plays a significant role. Zaptec is now transforming solar power, electric vehicle-charging, infrastructure, aviation and space exploration across the globe.

In 2016, Zaptec launched three new products — including ZapCharger, the world’s first portable charging station for electric vehicles, and ZapSafety, the world’s first supercompact isolation transformer for the industrial safety market.

They are also collaborating with NASA and ESA to develop their core technology for operations on asteroids and drilling on Mars.

So how does Zaptec, a company with a space program and plans to conquer space drive innovation?

Three major factors drive innovation within Zaptec:

1. A long-term vision and technology plan

This plan shows how we want to improve and change the world’s electric infrastructure, in all industries.

2. Vigorous network expansion

We systematically increase our network, public outreach and number of Zappers (groupies), which again stimulates Zaptec’s innovation process with ideas and support.

3.  A supportive organisational structure

To give room to innovation, we have organised our activities in daughter companies that can evolve separately.

Zaptec Charger (ZC) is responsible for all products on charging electric cars and building massive charging infrastructures. ZC has a strict focus on sales and finishing the engineering around these products. The creative force now lies with Zaptec Power (ZP), which is developing next generation Zaptechnology and exploring many new markets.

We found it very beneficial to divide innovative forces and focus on different daughter companies.

While we do not have any structured methods or meetings to stimulate innovations, we found it important to create an environment where innovation can happen.

We have a culture of open communication, humor and creativity so that ideas within the Zaptec architecture can flourish. We use Slack to share articles, opinions, ideas and customer feedback within our teams.

 

rafiq razaliRafiq Razali

CEO

 Media Prima Digital

Rafiq Razali is the CEO of Media Prima Digital — the digital arm of Media Prima Berhad, Malaysia’s largest fully-integrated media company with equity interests in television stations, newspapers, radio stations and digital media.

It operates Malaysia’s 4 leading free-to-air TV stations, some of the country’s most popular radio stations and also owns Malaysia’s largest publisher with 3 national newspapers.

Media Prima Digital manages the online operations for all the TV and radio networks under Media Prima and is charged with the long-term growth of the group as traditional print media circulation declines.

Innovation wasn’t a key focus for the Media Prima Group as it was the biggest player of its kind in the Malaysian media market and did not have to innovate much to grow.

However, digital disruption and a poor economy the past couple of years has spurred Media Prima Group to really start changing the way they operate.

Aiming for a bigger presence in digital, the Group has launched Media Prima Labs, an in-house incubator for innovation which produces new digital products and services.

Media Prima Labs has launched 8 apps to date and will be launching another 5 in the coming months. The apps have garnered over 1 million downloads to date, which was double what the team had expected.

How does Malaysia’s leading digital media group drive innovation?

The key ingredients to me are the 3 things I live by at work, which are:

  1. Control the controllables
  2. Always start from the customer
  3. Great people make great companies

It’s the same when it comes to driving a high innovation culture.

Right now, what we are focusing on is to:

Over-Communicate

This is so that the team understands what we want to do and what their roles are in this transformation, and to also manage stakeholders not in the team so that we get their support to continue.

Encourage Conversation, Even with Top Management

We encourage people in the team to speak up or provide feedback at all times.

Some of our projects are driven from top down, but we do have a couple that has started from the team. For instance we are now working on an app that’ll help us sell our billboard inventories better. That was the brainchild of someone from our team, and it immediately got the buy-in from everyone.

He was passionate about it and did a mock-up of the product on his own time. One day he just came up to me and presented it. I thought it was great, so I made the necessary arrangements to push it through.

Create a Supportive Environment for Projects to Succeed

We really incubate our projects. We create a support environment so that our projects can flourish (the eco system of marketing, tech, design, data etc), but also allow the project manager enough autonomy to just do what needs to be done to improve the product.

This means that we continue even if the product cannibalizes an existing business, is “off-brand”, or any other form of corporate red tape. To ensure that innovation happens, the initiatives that are run needs to be protected.

Align the Goals of Project Managers with the Support Structures

We assign each project to a project manager, but we ensure that they get all the help they need from a marketing, tech, data etc standpoint. The support structures’ goals are also aligned with the goals of the project manager, so collaboration is a lot smoother. This ensures that the project manager can spend as much time as possible improving & innovating the product.

 

 

greg paullGreg Paull

Co-Founder

R3 Worldwide

Greg Paull is the Co-Founder and Principal of R3 Worldwide — a global consultancy focused on improving the effectiveness and efficiency of marketers and their agencies.

The most experienced consultancy of its kind, R3 has offices across the globe, with over 100 employees in the US, Asia, Europe as well as Latin America.

R3 currently works with some of the world’s top marketers, including Coca-Cola, Unilever, AB InBev, MasterCard, Mercedes Benz, Johnson & Johnson, Samsung, and Kimberly Clark.

So how does a company with employees across the globe drive cross-border innovation?

We try to do a couple of things well —

Weekly sharing

Every week our teams share best practices with each other in a formal Tuesday Sharing session locally. Everyone gives feedback and that builds the learning curve. The presentation decks are then shared across our offices. Once a year, the entire global team flies into a city for three days of knowledge sharing.

“Can Do” Award

Once a month we pay a bonus to a team of individuals who go above and beyond — people that have used their own initiatives and broken the rules, gone the extra mile, or done something exceptional.

Global office transfers

For a small company, we work hard on moving talent around. Seven of our US team came from Shanghai. Our best researcher in Singapore came from R3 Vietnam. A new talent in R3 Beijing moved from R3 Shanghai. Our best analyst in London moved from R3 Singapore. We work under a single global profit & loss statement so there are no barriers to driving this movement.

It’s pretty simple — companies won’t hire us unless we can help them lead at innovation. It’s not something we can do “by the way”, it’s something that has to be the core of our DNA to fuel growth. Today, half our revenue is linked to digital — up from 25% three years ago. It’s because we want to make a difference. See how we’ve helped HSBC innovate digitally here.

 

 

 

shakira shanazShakira Shanaz

Head of Operations

 KFit Group

KFit Group is the fastest growing online-to-offline (o2o) local commerce company in Southeast Asia and Hong Kong. Beginning in 2015 as a fitness sharing platform, it has since expanded its offerings to include restaurants, beauty & wellness, lifestyle and more.

In August this year, KFit Group acquired Groupon Indonesia, and in November, Groupon Malaysia, with a goal to innovate and localize, to succeed where Groupon US failed. Since it was acquired by KFit Group, Groupon Indonesia has achieved a growth of nearly 2x, according to KFit Group CEO Joel Neoh.

Moving so fast and decisively, how does KFit Group drive innovation?

As an organisation, we always work with end-goals in mind, and with everyone 100% focused on achieving them.

If we realize midway that we need to restructure our goals, either because of evolving business needs, or if we find a better way to approach things, we adapt accordingly.

We stop, brainstorm, align on the new way forward, and start executing.

I think in some ways this is how Fave, our O2O local commerce platform came about. Basically, we wanted to offer customers the same value proposition as we did for KFit, but across new verticals including dining, health and beauty, and entertainment.

As a fast-growing, local e-commerce company, we need to make sure we’re nimble but focused on what is is we are trying to achieve.

At the end of the day, it’s important to remember that change is constant, but it’s up to us to find the most effective solution to each and every challenge.

Employ Great, Diverse People

I always believe that behind every great company, there are great people who are aligned towards organisational goals.

We’re lucky to have a solid team of people who each bring with them a wealth of experience — having previously worked in a variety of roles, industries, and countries.

We feel this diversity is one of the more ‘natural’ ways to foster innovation. We’ve also divided some teams, like our engineering and product team, into smaller, autonomous squads. This allows each team to have total ownership and responsibility over every aspect of the product they’re working on.

Open Up the Floor for Ideas

At the same time, we really encourage independent thinking and problem solving within the team. We open the floor to anyone who wants to contribute their ideas, which is a great way for people to learn.

I remember there was once an intern here, who, on his second day with us, had some great ideas on how our app could be better. We had him discuss it directly with our CTO, and many of his suggestions were worked into our product pipeline. This is the kind of synergy we encourage at KFit group.

 

wai hong fongWai Hong Fong

Co-Founder

StoreHub

Wai Hong Fong is the co-founder of StoreHub, a cloud-based retail management system that replaces bulky and clunky cash registers with an iPad POS. The space-efficient system not only looks sleek and sexy, but comes packed with power and enables store owners manage their inventory, customer relationships and data in real time.

Founded in 2013, StoreHub’s innovative system has revolutionized the retail market in Malaysia and is now currently serves customers in over 12 countries.

How does a hyper-paced startup like StoreHub drive innovation?

Innovation is a result of two mindsets existing together.

The first is the freedom to engage new ideas.

At StoreHub we have a strong culture of giving positive affirmation to people when they try new things and fail, while giving negative affirmation when we see behavior that is ‘permission seeking’.

Our only caveat is that things be given sufficient thought. We also do not give weight to ideas based on who shares it i.e. positional influence but we give weight to ideas based on the merit of their reasoning.

The second mindset is a drive to constantly make things better.

Every new employee at Storehub will be reminded that their responsibility is not to simply work in(side) a process, but to also work on a process.

What this means is that if you’re in marketing, you’re not just following the manual to do your job, but you’re encouraged to find ways to make that ‘manual’ better.

When you combine both the freedom of idea generation and execution with the mindset of ongoing improvement, we find that people naturally find new ways to do old things and new things to embark on. This for us is innovation in action.

When we talk about making the lives of others better, innovation is key. New ideas alone don’t become meaningful until they partner with a real desire to improve things.

The future of StoreHub relies heavily on building teams that carry a healthy amount of both mindsets simply because that is where real value is created. A company that does not constantly seek to create more and more value will eventually fail to exist.

 

jessica liJessica Li

Co-Founder, COO

 dahmakan

In 2014, Jessica Li co-founded Malaysian healthy food delivery service, dahmakan, to address the gap in the industry for healthy and affordable lunch options. Beginning with just 5 orders a day, dahmakan is now the fastest growing food tech startup in SouthEast Asia, backed by angel investors and is in talks with global venture capital firms.

Meaning “have you eaten” in Malay, dahmakan is revolutionizing the health food industry in Malaysia. By developing their own logistics technology, they managed to significant expand their delivery area which now covers 80% of the Klang Valley — opening up a customer base of over 8 million.
Dah Makan aims to democratize high quality food the same way Ikea has democratised designer furniture.

So how does dahmakan, competing in the fast-moving space of F&B, drive innovation?

As a food tech startup, we don’t think about “innovation” as a function or strategy. Instead, dahmakan was born with the intention to create something new and to do things differently. Like a jigsaw puzzle player, we use the best practices and knowledge of different industries and combine them in a new way. Most of the time, the jigsaw pieces don’t fully fit so we have to slightly change their shape or in some cases completely reinvent them.

Keep testing, trying and improving

We try out and implement technology across every function e.g. to build a fully automated delivery system that makes decisions in real time with high efficiencies. Using machine learning and advanced technology, we have built a system that caters to on-demand orders at a third of the cost of traditional food delivery. We place high focus on our R&D team that compromises of ex-developers from Google, Stanford marketing talents and even 5-star chefs that are constantly working towards new innovations.

Create a conducive space

At dahmakan, we encourage ideation and cross-function discussion among teams to come up with new solutions by having an open plan space with mingled seating.

Celebrate both victories and failures

When an amazing idea surfaces, the individual is then given the responsibilities of executing the idea.

Ideas are great, but its all about fast execution and learning along the way. We encourage employees by making sure there isn’t a wrong or right approach until you execute it and we celebrate both victories and failures as a source of ongoing learning.

Share knowledge

Another weekly initiative is our “Knowledge Flower” session where employees share their past experience and knowledge with other employees based on topics relevant to the organisation.

Set Clear Goals

Lastly, we use an Objectives and Key Results (OKR)-based goal setting system. Everyone’s individual OKR hangs on the wall in the office. This includes all founders and top management OKRs in order to enhance transparency and encourage exchange of ideas as well as to stretch everyone’s thinking.
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How does your company drive innovation? Share your insights with us in the comments section below.

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Sometimes it’s hard to communicate your vision for innovation. Visual strategy tools help get your team on the same page when it comes to new ideas and implementation. Check out the Strategy Tools World Tour.