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Mikael Eriksson Björling

Things that matters! About digital transformation, design, culture and lifestyle in the Networked Society

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Innovation

5 ways to master the new innovation game

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Assuming your organization has a creative mindset, and beyond the possible implications of emerging technologies, a key challenge lies in pinning down what is required from an organizational perspective for innovation to take place. To a large extent, this is the key challenge in the business world today and something that many organizations, especially larger ones, struggle with. What are the prerequisites for making innovation happen?

As part of my work with Ericsson and a recent study we conducted, we identified 5 ways to master the new innovation game. These are:

  1. Insight: Understanding people and understanding the problem
  2. Outsight: Keeping track of the world around us
  3. Innovation vision
  4. Culture as fuel for innovation
  5. Structure for creativity

Let’s look at them one by one:

Insight: Understanding people and understanding the problem

A key viewpoint that most creative thinkers will agree upon is that innovation is essentially about understanding human beings. The problems that are supposed to be solved by a structured innovation approach are ultimately human, not corporate. To identify the real problems and pain-points requires an understanding of humans in their natural habitat. Some innovators and entrepreneurs have a natural eye for the world and people around them and make the problematization and analysis by default. But in most cases, innovation requires an explicit and structured research effort of going out in the real world to gain insights that become relevant platforms for innovation.

Innovation also requires fundamental understanding of the problem you want to solve – and innovate based upon this understanding. This perspective stems from the notion that innovation is about solving real-life problems for people and digging deep into what these problems actually mean. Prehype, a New York-based venture development firm, believes that a good long problematization phase is the heart of all innovation. Nicholas Thorne at Prehype says:

“We focus our time in problem space rather than in execution space. If you get the problem right the solution presents itself.”

Outsight: Keeping track of the world around us

Innovation not only requires a solid understanding of end users, it also requires keeping track of how the world at large is changing and which implications this will have on our culture in general, and your area of business specifically. To a great extent, innovation is a question of timing and being in sync with the world around.

People and companies that are in tune with their times and have a sense of what the next big thing is will likely time their innovations relevantly, while people and companies that don’t have that outsight will waste and spoil good ideas and inventions because they don’t understand the larger sociocultural and socioeconomic context.

Innovation vision

Frederic Laloux describes how we are entering an era where organizations are increasingly driven by missions, and employees are motivated by the unique user value that they can help provide. Successful innovation comes from coming up with ideas that fill real needs and serve a purpose. In other words, this emphasizes the importance of having a clear vision for why and what we want to innovate. There are many examples of leaders who embody a vision which sparks innovation by giving employees a strong sense of purpose.

Open, flat and decentralized organizations with a creative and playful organizational culture also require a more visionary leadership. These types of organizations are made up of talented, skilled, and independent people with their own drive, who usually respond best to visionary leadership. They work most efficiently when working towards a bigger idea – a vison or a mission – that brings meaning to their work and daily tasks.

As discussed in Ericsson’s 2013 Networked Society Lab Report: Moving Fast and Breaking Things – a tale of digital business transformation, the product organization is an answer to this. The product organization is made up of a number of product-focused teams that are allowed to operate very autonomously within the organization, as long as they work towards the overall vision or mission of the organization. The role of the leader is to promote, uphold and manage the vision rather than micromanage various projects.

Culture as fuel for innovation

Culture is a core focus for organizations that aim to be at the forefront in terms of creativity. The old maxim “culture beats strategy” could actually be rephrased as “culture is strategy”. Culture plays a key role in addressing the challenge of gluing teams together and making them committed to the company mission. Creating a strong community is prioritized as a strategic way of attracting the best employees and to motivate them to spend time in the office. But culture is equally as important as a strategic way of creating an environment where innovation will thrive. The idea is that innovation can occur at all times and at all levels of the organization, given the right cultural climate.

Innovation is as much a human story as it is a story about technology. Organizational culture, people and diversity are at the heart of any discussion on innovation – and the cultural aspect of innovation was highlighted by almost everyone interviewed in our study. The argument is that companies that are able to create a certain kind of organizational culture will see innovation emerge from within the organization with much less effort than in other organizations. An innovation friendly culture will be able to manage, value and prioritize ideas that show up in the organization rather than dropping them before they are even tested and tried. Some thinkers on innovation go as far as to claim that innovation equals culture.

Structure for creativity

For the longest time there was a bias towards viewing innovation as something that just happens in a “magical” way in a black box of creativity. But even if innovation can sometimes happen accidentally, the opposite is usually true for truly valuable innovation to happen. In the academic world, innovation is often described as a systematic management process and an organizational structure, rather than a black box of creativity that occasionally generates innovative ideas with real business potential.

Academic research on innovation in organizations suggests that innovation should be managed strategically from the top level of a company. Companies should have an organizational structure that enables innovation and allows people who work with innovation to pursue careers in innovation. Companies should have a defined process for how to drive innovation within the organization, and should be able to measure and follow up on their innovation efforts just like they do in any other department of their business.

There are many different ways of perceiving how a structure for creativity is best achieved from an organizational perspective, but a common theme is that there has to be a structured process for collecting, evaluating and implementing new ideas. Without the process in place, the understanding of end users and the world they live in, the visionary leadership and the culture of innovation will not succeed in creating strong and meaningful innovation. When ideas are not acted upon, the creative force will eventually fade and the culture or vision will not be enough to encourage continuous innovation.

Like this post? Don’t forget to check out the firstsecond and third at Ericsson Big Ideas Blog

3 ways that new technologies are accelerating innovation

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Most innovation is directly or indirectly driven by new technology – even business model innovation and changed consumer behaviors – and the way new technology transforms our world and various markets. In this way then, an understanding of new technology and its impact is a prerequisite to be able to innovate, and to do it constantly.

So, how are emerging technologies, such as 5G, artificial intelligence, and virtual and augmented reality contributing to innovation? They do it mainly in three overall ways:

  • As founder of new markets
  • As vehicle for innovation
  • As enhancer of human capabilities

Let’s go through these three ways one by one:

Technology as founder of new markets

New technology has a huge impact on markets and market dynamics. This has always been the case, but in the digital age this is happening faster than ever before. Over the last decades we’ve seen how digital technology has disrupted many different markets. Streaming has disrupted the music industry, as well as TV and film, and social media has radically disrupted the entire media sector.

Let’s take a look at 5G – a technology that Ericsson is developing. As 5G starts to become a reality in the marketplace, many new capabilities and possibilities emerge, such as network slicing, ultra-low latency, lightening fast speeds, and extreme reliability to mention a few. And these capabilities are enabling many new use cases: from remote controlling vehicles in a mine to small sensors that have 10 years of battery life. These technology features will transform the current logic in many businesses and create new markets for those who sees the possibilities.

When new technology becomes established in our society it also drives new behaviors among people and their role as consumers, and these new behaviors represent potential new markets. The same thing happens in industries: when a new technology becomes available organizations can possibly change areas within their business, such as value chains and operations, but also whole business models and the entire market itself.

Artificial intelligence (AI) is another hot technology area that will open new markets and market niches in many industries. Today, most areas are related to innovation efficiency and effectiveness (the areas to the left in the model I described in my previous blogpost).

The most common area of exploration today is the automation of business processes, for example, digital and physical tasks. Harvard Business Review recently said that 25 percent of the 250 business executives in their survey think AI will help them pursue new markets. Far more of these executives see AI as helping out with efficiency and effectiveness in their current business logic.

Technology as vehicle for innovation

As we’ve previously discussed, innovation and technology are tightly interlaced. Two very notable ways technology propels innovation forward is that it boosts tinkering and experimentation, and that in itself accelerates innovation processes.

Not long ago experimentation with new technologies was only possible by multinational corporations or government-funded research labs. Today, affordable technology – digital and other – makes it possible for most enterprises – big and small – to experiment with ideas and concepts in whole new ways, and also in reality instead of only in test labs.

For example, it’s now possible to test products and services online at a very low cost, as well as test out updates, alterations and tweaks. Prototyping has become available to all through easy to use software and 3D printing. AI can simulate various market scenarios based on available real-life data. Virtual reality makes it possible to create completely new types of blueprints that actually make products and services come alive for real, and thus make them possible to evaluate prior to building or manufacturing them.

Digital technology and the new technologies that it enables (like AR, VR and AI) cut the traditional industrial age innovation process short. What used to take years of planning, testing, and executing can now be accomplished in months and sometimes even weeks.

Another way emerging technologies – AI in particular – can speed up innovation, is by removing obstacles of uncertainty or lack of information. Continuously identifying and ruling out hypotheses at a quick pace will no doubt make the innovation process more focused and effective in generating strong solutions. AI, being far superior to humans in analyzing big amounts of data in an instant, cuts innovation processes significantly. Data is the protein of AI systems: if there is a sufficient amount of data, AI will be able to increase the speed of innovation.

Technology as enhancer of human capabilities

One way of looking at it is that digital transformation, after having transformed domain after domain, has reached technology itself and is beginning to recursively transform technological evolution as we know it. This unlocks a great potential, but it also raises concerns as to what it means that technology – and not only humans – has control over technological progress. As discussed further, there are both optimistic and pessimistic stances in regard to our technological future.

Regardless of position in this matter, it is clear that emerging technologies are becoming increasingly important in the very process of innovation.

Now, technological evolution has reached a point where it can help us overcome – or at least circumvent – our own cognitive short-comings. Where the human mind fails to display characteristics beneficial for driving change and creative thinking, technology can give us an extra push towards a greater innovative capacity.

One area close to my heart is design, and in particular design and innovation. The designer today has a completely new set of possibilities and tools for designing and prototyping. Both rapid as well as creating shapes and interactions that would have been impossible a decade ago.

Ericsson Strategic Design Lab is working with cities and city planning questions, and for this they are using AR to remove buildings from a real environment and place models of the new architecture into it, creating a tool that makes it possible to explore city planning with an extreme low cost and possibilities that were only fantasy some year ago.

Another example is seen in car manufacturing, were companies are starting to do car models in VR instead of the super expensive and time-consuming clay model that was traditionally used. And in the same industry, there are newcomers such as Local Motors who are challenging the traditional way of designing and producing cars using crowd sourcing, open source and 3D printing technologies for physical prototyping and production.

Finally, and to summarize, an understanding of new technology is necessary in two primary capacities:

  1. Understanding technology as a starting point: Organizations that want to innovate must (in most cases) understand the seedbed that new technology creates for any market today. How has new technology changed the conditions in your market and what technologies are out there that will transform your products and services, and how do you model them for the market?
  2. Understanding technology as an enabler: The second capacity in which an understanding of technology is necessary for innovation is as an enabler. For example, how new technology can help make new ideas and inventions possible to realize on the market. Technology is also an enabler for experimenting with new ideas and testing out new concepts, and organizations that understand how to utilize new tech in this phase of innovation will gain leverage that other organizations lack.

So, how will 5G, AI, VR and AR, contribute to innovation in your industry? Do you see the possibilities, or only threats?

Like this post? Don’t forget to check out the first and second at Ericsson Big Ideas Blog

5 key steps to creating an innovation mindset

mindset

If innovation is about developing something new that impacts the market and creates value for users – what is required to make that happen?

Innovation is a question of mindset, and creating that mindset precedes everything else. In my opinion, it’s the innovation mindset that overrides the aspects of human nature that are often holding back innovation in large organizations.

So, how do we create an innovation mindset?

1. Be open to change

To be open to change means to admit and embrace the notion that the world is in constant transformation and all areas of society are challenged by this change. It also means to be aware of where this transforming world is heading and to curiously keep track of change and new phenomena. Finally, it also means that you have to constantly keep analyzing what the transformation means and what the possible consequences of the transformation will be for your business.

Change is a tricky thing – we all have to deal with it and organizations are no different. Accepting the fact that technological transformation is about to impact your business is usually very hard for established organizations.

Let’s apply a light version of the Kübler-Ross Change Curve to this:kubler-ross-change-curve-768x401

Denial is a common reaction to new technology and new market forces that can potentially overthrow an organization’s incumbent business.

‘We’ve been doing what we do for many years: it has proven successful and if we just continue to deliver on our quality we will be back on track again. The newcomer does not even have a working business model and are financed by venture capital.’

Defense is the next stage in the Change Curve: a kind of anger or aggressive energy to defend one’s current business model. A prime example of this can be seen in the music industry when MP3 and streaming came along as new technologies, and established organizations tried to change laws and prosecute against their customers.

The next stage is depression, where an organization will begin lamenting the state of affairs. Only after this depression stage are they ready to accept the new market paradigm and start working towards managing and adapting to it.

In today’s fast-moving markets there is little time to dwell in the different stages of the Change Curve, as competitors and new market entrants are pushing forward while you’re in the first three stages. To be innovative, established businesses must learn to shortcut the Change Curve and go directly from shock (pre-denial) to acceptance, without dropping into any of the stages in between.

2. Embrace creativity

The other aspect of an innovative mindset is to truly embrace creativity. An innovator’s attitude is that creativity is the solution to problems, rather than a traditional scientific method. This argument is predominant among many of those who have successfully practiced innovation in the realm of daily business activities. The innovation-as-art perspective in business stems – to a large extent – from the concept of design thinking.

But importantly, to equate innovation with art doesn’t rule out the necessity of structure, processes and methodology for innovation. All these are required also when practicing the art of innovation. However, the innovation-as-art perspective stresses that the starting point for innovation is creativity, rather than implementation of management processes and organizational structures for innovation. Which, in turn, requires a certain kind of culture and organization that enables creativity. In this area, we see many digital companies positioning themselves. For example, Valve Software, who stress their flat organization and the freedom – and every employees responsibility – to be creative in everyday work in their company handbook.

3. Think big

Today, most academic researchers and experts on innovation agree that innovation is about more than just incremental improvements to existing products or product extensions.

This leads to the point that innovation requires an ability and the courage to think bigger and beyond the current norms and truths in the market. Innovation is about stretching one’s thoughts out of everyday ordinary thinking and analysis.

We’d argue that big thinking and innovation is a combination of analytical skills, entrepreneurial spirit and the ability to fantasize. Few individuals are blessed with all these capabilities, but a group of people – and certainly organizations – are well equipped to accommodate these capabilities under the same roof. This is also one of the reasons why a diverse organizational culture has emerged as a key prerequisite for innovation: diverse groups that combine skills and capabilities can accomplish big thinking more easily than homogenous groups that are likely to reproduce versions of similar thinking over and over again.

4. Show courage

Innovation doesn’t happen unless organizations and the innovators within them have the courage to constantly rethink how things can be done. It takes courage not to conform to widespread beliefs and popular “truths” in big organizations. It takes courage to challenge proven strategies and successful products and services before they go into decline. It takes courage to question management and colleagues for doing things the way they have always done. It takes courage to constantly problematize and be that one person who always goes against the grain and tries to think about things from a different angle. It takes courage to be vulnerable rather than playing it safe according to established business practice. It takes courage to venture into the new and uncertain, risking failure.

But all of the above is necessary to push innovation forward and to create an innovative climate in organizations. Because when has anything new ever happened unless someone dared to take that step into the uncertainty of the unknown? When I think about the courage needed to take that first step I always think about the guy that started a dance party at Sasquatch music festival. That is exactly how things can work in an organization as well.

5. Think and act fast

Innovation within an organization must be a fast-moving process to keep up with the change going on outside of the organization.

Twentieth century innovation was often a slow process, with long lead times from idea to concept, and concept to market. A lot of time usually went into extensive R&D. In the automotive industry, for example, the timeframe to invent, design and launch a new car model has been around eight years. But today, eight years is an eon in an automotive market that is transforming year by year. Potentially disruptive business models for auto manufacturing like Local Motors have proved that a new car can be dreamed up and launched in the market in 12 to 18 months, and with advanced 3D printing technologies and VR-aided design and manufacturing, that timeframe can probably be cut even shorter in the years to come.

To sum all of this up succinctly, there are five main ingredients to an innovation mindset. We need to be open to change, have a bias towards to creativity, an ability to think big, unrelenting courage to challenge the norm, and be characterized by speed of thought and action.

An organization with the desire to be innovative must think fast and apply a fast-paced innovation process with an efficient go-to-market roadmap. In this context, it’s also critical to adhere to the notion of “failing fast”, as new ideas and concepts have to be tested out quickly and be shut down just as quickly if they don’t fly. In this way, the organization can move resources to the next concept instead of getting stuck in a dead-end innovation project, because after all, the world’s next “big idea” is just around the corner.

Want to know more about how Ericsson works with an innovation mindset? Discover how real-time connectivity is fundamentally changing the way we innovate, collaborate, produce, govern and live sustainably.

For more Big Idea blog post visit: https://www.ericsson.com/thinkingahead/the-networked-society-blog/

 

Why is innovation the buzzword right now?

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What exactly is innovation? And how does it work in the business transformation context within ICT?

At Ericsson, we have talked about the fundamental digital transformation that is taking place across our entire society for many years, with particular focus on the new opportunities and challenges it brings.

This shift has matured recently: new businesses move from startup buzz to industry disruptor at lightning speed. Just take a look at the great impact on traditional businesses that companies such as Airbnb and Uber have had in their industries. This will only accelerate as more and more intelligence moves up in the cloud.

Just a short while ago, digital transformation was only on the agenda of the larger tech players. Now, it’s on everyone’s agenda. Businesses and organizations of all sizes in every industry understand that digital transformation is also affecting them and the way they do business both now and into the future. They are all aware that in this new world there might be a garage startup, either around the corner or on the other side of the globe, with ideas that will disrupt their current market by offering radically different propositions.

So, when there is awareness, what should traditional businesses and organizations do? Let’s begin by answering the questions I asked in the beginning of this post.

There are four different drivers in our innovation model, which you can see in the figure below:innovation-model-768x332

  • ‘Outside Drive’ (at the top) are areas outside of a company’s control. This could be changed laws or regulations, shifting consumer behaviors, or new disruptive technologies such as AI, VR or 5G.
  • ‘Inside Control’ (at the bottom) are areas a company can control, such as definition of their core business, consolidation, scale gain opportunities or maturing technology.
  • The left side of the model is evolution from where the business is today, to the right which is disruption.

To secure a good position in the future market of your business, you must be aware of what is happening in your broader industry related to the fields in the model. If we plot where innovation is happening, we can see that traditional businesses focus naturally on the left side of the model in value chain effectiveness and efficiency, while we often find the digital giants and startups on the right side of the model.

The lower left corner of the model is about using new technologies to innovate for better performance of current offerings. If we take the example of a car manufacturer, this could be using ICT to automate the flow and construction of cars in the factory. Basically: do what you do more efficiently than the competition. ict-cityview-768x440The upper left corner is about using ICT to innovate value chain efficiency and improve offerings to the current market. In the car industry, this is typically a connected car. Today’s connected cars are sold as any other car, but they make use of the connectivity to improve the offerings toward the car buyer. This could be to offer safety features like calling 112 automatically if an accident happens, or having built-in connected features like ‘find where I parked my car’.

Read the rest of this blog post at Ericsson Big Idea Blog

Design from the dot com era

I developed this IP telephony concept during the autumn 2000 for Ericsson Business Corporation. The work included doing the interaction design, graphical design, prototype development and usability testing. This was three years before the first version of Skype was launched 2003. The sound quality in the application was incredible good at the time. This at a time when most people used dialup modem to access internet and hardly anyone used a wireless access. Laptops was rare, and about 90+ % of the population in the developed world still had fixed line phones at home. In Sweden at that time about 40% of the population used internet at work at least on a weekly basis.

Personal_voicePersonal_voice_expanded

Systemet och miljön

Wind, en prisbelönt kortfilm om hur levande system påverkas av sin miljö och hur det måste ändras när miljön ändras. Arbetslivet (ett levande system) påverkas i högsta grad av sin miljö (samhällsstruktur, marknad, ekonomi, etc.) Detta är en utmaning för de flesta när vi nu lämnar industrialismens miljö till det uppkopplade samhällets miljö.

Mer animeringar av Robert Loebel hittar ni på http://www.robertloebel.com/

 

Social businesses prefer impact to profit

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How does it work to have positive impact as the main outcome of a business and not profit? While conventional for-profit businesses have maximizing profit at the core of their business models, social businesses see profits as a tool rather than an end. Stable revenue is only a part of a much larger picture to achieve social impact.businessmodel-768x319

Social businesses use the same three-dimensional model as conventional, for-profit businesses:

  1. The value proposition defines what type of value the business is offering on the market
  2. The revenue model defines how the business is making revenue from its value proposition.
  3. The network relations define the different market actors that a business has relationships with

These three components build what social business call the ‘Financial Sustainability Model’. However, this is only one of three important components in the business model. The other two are ‘Social Impact Model’ and the ‘Community Engagement’.

The Social Impact proposition explains the intent and mission of the business. To exemplify, SiembraViva in Medellín, Colombia, offers convenience and conscious consumption to urban dwellers yet the social proposition is to empower local farmers and increase ecological produce.

The Community Engagement: This is an imperative element to the social impact proposition and financial sustainability model. Community engagement roots the social business, ensuring the social impact proposition is relevant and that the financial sustainability model has an arena on which to act. socialbusinemodel-768x202 Read more about this topic at Ericsson Networked Society site

Related: The Social Business Era: Creating Impact and Influencing Change

Say hello to the era of social business

post-1-siembraviva-768x373In our brand new report, The Social Business Era: Creating Impact and Influencing Change, we explore a new model for 2017 and beyond: The Social Business. This is a new type of company on the market that is out to challenge traditional ways of doing businesses.

The majority of companies operating today use profit as their main measurement, i.e. the business is judged by others (the market) with economic figures and the potential for growth. But things are changing.

post1-quote-768x212

It is no coincidence that social businesses have recently emerged and developed in the Networked Society. But why is this happening now?

  1. The ultra-capitalistic industrial society of the late 20th Century is now being questioned as a relevant model for a ‘good world’. At the same time, the state and traditional social institutions that are supposed to care for the welfare of citizens are failing people across the world.
  2. New generations growing up with mobility, broadband, and internet access are now entering the arena of social issues. They are also used to things moving quickly, getting things done right away, and seeing direct impact. They experience frustration with old ways of doing things and the slowness and inefficiencies of institutions to accomplish any real change.
  3. The necessary technology is already in place. Today, we have technology platforms, digital tools, and social networks available for free or at a low cost, which makes it possible for people to start something without the need for large investments or technological skills.

How do we define The Social Business?

  1. No dividends allowed. “A non-dividend company that is created to address and solve a social problem”.
  2. Focus on intent and output: “An organization formed by one or more people whose commercial activities are primarily driven by the desire to create positive social change”.
  3. A broad, pragmatic approach: “A business whose primary intent is to create social impact and that uses revenue streams to become financially sustainable in order to further that impact”.

Create positive impact…who wouldn’t want to do that?

In my next post for the Networked Society blog, I will take a look at the main differences between traditional and social businesses.

Read more about this report at Ericsson Networked Society site

Related: The Social Business Era: Creating Impact and Influencing Change

 

Progessive innovation: accelerating, active and accessible

As described in my last blog post, Mobility, Broadband and the Cloud have become general-purpose technologies with a broad applicability, creating a foundation for innovation and driving the transformation of society.

Right now we see some progressive innovation happening, and in almost every area Mobility, Broadband and the Cloud are being used to create progress. This is happening in industrial bio-technologies, smart materials, sensors and 3D printing, wearable technology and the Internet of Things, as well as in smart energy, robotics, analytics and visualization.

It is hard to find any area that is not being advanced by Mobility, Broadband and the Cloud. This shift can be summarized in three areas. Continue read about this at the Ericsson Networked Society blog.

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