"Innovation is a new way of doing things. As a rule, there is no shortage of ideas, but putting these ideas into practice is what is difficult," says Kenneth Gvein, CEO of Knowit Experience in Norway. "In the old reality, durable competitive advantages were built, but now digitalization and globalization have given us a new reality. Now we must constantly adapt to transient competitive advantages. Change happens very fast, and so the power of innovation may be a new competitive advantage. The best plans are no longer made for four years at a time. Choose a direction you believe in and let the data tell you if you are on the right track. In our experiments, we have a simple rule: take action. In following up, we ask the question: Are we going to double up or call it quits?" This simple question works very well," says Gvein.
"Innovation is a team sport. What determines whether you succeed with innovation in your business is essentially two things: people and culture. These are the two most important drivers for innovation. It helps to have guiding lights, especially if they are known for forging a path ahead, but nobody can do it all alone. The organization must be a willing participant, and good ideas often come from places you would least expect them.”
Digital transformation is about the company's ability to make organizational changes
"The success factor is primarily determined by the extent which decision makers in the organization are empowered to actively embrace constant change as an opportunity for growth and innovation. Existing customers are poor guides for the future. They have already purchased from us and we have delivered value for money earlier, and so they are not the best to judge a new way of doing things that may be in their best interest.
The challenge is how the organization, culture, employees and strategic choices taken enable the organization to understand the risks and opportunities offered by new digital trends. It's the optimists who will succeed best," says Gvein.
"Everything from existing customers, to organizational structures and the mentality of managers affect the degree of success. We must know what we are looking for in our own organization when we as leaders talk about innovation. Are there efficiency gains? Or are there creativity gains? These are two very different end results, which are also measured differently and require different types of people to achieve.
In the big picture, first and foremost, businesses want to innovate in order to reduce costs. However, strategic flexibility, focus, the desire for increased market share and reduced risk are also drivers for innovation. The challenge facing both us and many of our customers is to focus on how digitization can help increase revenue and create new revenue streams, often at the expense of older ones. Many people need to adjust their business models and need answers to several critical questions. We can help with this," explains Gvein, and describes his mindset using four rhetorical questions.
- What do the customers want?
- How would they like it?
- How do we organize ourselves in the best possible way to deliver this?
- How do we earn money?
"To sum it up in one sentence, it is about what value we deliver to our customers, and how we generate profitability by delivering this service," concludes Kenneth Gvein.
Strategic focus is crucial
"Digitization is often a key factor when businesses want to innovate," says strategic consultant Anders Daniel Brekke in Knowit Experience. He has conducted several "innovation sessions" with management teams for Knowit's customers. "Ensure that the board and management share the same strategic focus for the business," encourages Brekke, highlighting that efficiency, growth and transformation are actually three quite different strategic focuses. Digitization can create value in all of these focus areas.
Everyone meets a global standard
"The five major disruptors, GAFA (Google, Amazon, Facebook, Apple) and Microsoft, affect us no matter what industry we belong to. They set the standard for user experience, ease of use and friction. This means a new logic within business models, service, delivery models and industry awareness. Adoption of new technology at the consumer level is going faster than ever, while life expectancy is shorter. This offers a variety of opportunities and challenges. How can unique data or technology be used to strengthen core operations? How is this affected by the five major disruptors? Are you going to compete with them or position yourself to exert influence on the platforms? If so, which platform and what kind of influence," asks Brekke.
"No matter what position you choose, the opportunities or imminent threats this entails should be identified. This is crucial instead of assuming that the premises for success mainly depend on how close or far away one is to other competitors. It's the organization's ability to change, its agility and speed in changing, that determines the ability to position itself as to how to ease the customer's frustrations or create increased value for the customer.”
Knowit's program to develop the ability to innovate
“Strategic goals are decisive for how innovation affects the industry, business or business model. "I urge my customers to ask themselves: ’How can we use the five major disruptors to visualize our potential in growth, value, channel options, risk, collaborative partners, start-ups and our own ecosystem?’
My simple summary is that culture and people are the most important drivers for innovation and knowledge sharing. If you are change oriented, you develop a capacity for innovation and eventually a culture for innovation. In Knowit, we believe in differentiation, deep customer insight and a intrinsic will for innovation. In order to live up to this, we combine strategic understanding with result-oriented communication and the latest cutting-edge solutions in technology. We have developed a program to develop our customers' ability to innovate, and we hold sessions with management teams following the ’train the trainer’ principle.
Please get in contact with us if you would like to go through how this will work for you," says Anders Daniel Brekke.