NOT HERE AND NOW OR THERE AND THEN. BUT ALL THE TIME. EVERYWHERE.

Throughout the whole organisation and in all the company’s departments, creative innovation is a must – if it’s to be of any value. And that has never been more important. Today, when everyone is competing in a world that is growing and shrinking at the same time, it’s not enough to think outside the box – someone is bound to have got there first. Paper has talked to the experts who help the best to take their ideas a step further. Here we’re really talking about implementable innovations.

The pace is fast. If you don’t want to get forgotten, you need to keep up. Facit, for example, says it all. The Swedish office machine company flourished in the 1950s and 60s, but when they missed the express train to computerville, their business quickly withered away.

“It can happen in as little as a week. Just look at Kodak,” says Stefan Moritz, Vice President Customer Experience at the international design and innovation agency Veryday.

The agency has offices and clients all over the world, including the likes of Ikea, Microsoft, Spotify, LG, Tetra Pak and Telia.

Another person with her finger on the pulse of innovation and how to make it work is researcher, author and consultant Annika Steiber, who currently runs her own company Innoway. She was the first researcher in the world to gain access to search giant Google’s inner sanctum, which resulted in a dissertation and two books about how the company leads and organises itself in order to maintain a high capacity for innovation.

“Innovation can be about completely new, groundbreaking ways of working or continuous, small-scale improvements. Most of us are quite good at the latter. But when it comes to more far-reaching innovative working practices…”

Annika Steiber lets the rest of the sentence hang in the air. A telling silence.

How do we know if we’re keeping up?

We'll come back to Annika Steiber, Google and other examples of how companies succeed. But first we need to find out how to diagnose our own situation. How do we know whether we’re keeping up?

“The success stories are the ones that maintain their innovative focus even when they don’t have to. They never rest. A serious warning sign is when no-one wants to work with you, and you’re finding it tough to recruit and hard to find customers,” says Stefan Moritz.

Another warning sign is when you think you know the customer and everything is fine. He mentions the banking sector, which is under severe pressure from sharp, digital newcomers and various mobile apps offering financial services.

“The banks have spent too much time on internal processes and regulatory issues, and they’ve often lost sight of their customers’ needs."

“And there we have the heart of all innovation,” asserts Stefan Moritz: “Genuine innovation begins with a need. For a company, this is a customer need. So innovation is about managing to see yourself from the outside. About shifting your view from inside-out to outside-in.

"Innovation has to be an ongoing process that runs across the whole company"

Our transparent world means your customers judge you based on what you actually do rather than what you promise them in your marketing. Being able to see and compare has put the power in the customer’s hands. Being compared and scrutinised feels terrible, but it’s something the innovative can exploit.”

A mindset of innovation

It used to be the case that innovation was a department tasked with inventing products that the company then sold to people through massive advertising campaigns.

“Today, innovation has to be an ongoing process that runs across the whole company. The customer experience is actually the only thing businesses are competing over, the only parameter worth measuring. You have to embed a mindset of innovation and customer experience in the whole of your company’s DNA. Which is easier said than done,” he admits.

And that is why many companies turn to consultants such as Veryday to get this outsider’s view. The Swedish office in Stockholm is housed in an old mission church up on a hill, where the trees reach for the sky. Indoors too, there are high ceilings and plenty of light, white space. On the walls sit prototypes and models, often in cardboard, and large paper sketches peppered with post-it notes, all of which bears out the way the agency works.

Veryday always begins with extensive customer insight work, which is not about simply asking people what they want. Instead, they use other ways to try, test and tease out solutions to the needs that people have. They then workshop the idea together with the client, looking at how it can improve the company’s services and products.

Wireless electricity in the home

Stefan Moritz recounts some of the projects they’ve had with Ikea.

“They came to us to investigate how they could use technology to help make our everyday life at home more comfortable and enjoyable. The first wave of Ikea’s ‘Home Smart’ collection focused on integrating a mobile charger function into furniture. In the future, we’ll have wireless electricity in the home. And we’re already able to build charging points into the furniture,” he explains.

But how do consumers want this to work? Where in the home would you most want to leave a mobile charging, if you didn’t have to worry about power sockets?

“It’s hard for many people to imagine. They can’t talk about their needs in a world that doesn't exist. So we create a context where that world does exist. We go to the homes of the study’s participants, we give them a bunch of stickers and we ask them to place them around their homes, where they would like to charge their mobile or tablet. Then we interview them about why. When we make it all about their own home, we get to hear their stories about how they want things to work for them. One man put all his stickers on the living room table, and one woman put them on the wall in the hall. Why? Because it would be good to be able to throw the phones so they stuck to the wall for charging. A place to park your mobile."

“We only care about things we have feelings for. So emotions are at the root of all innovation.”

Following the interviews, Veryday designed various concepts for a better user experience and analysed the results in a workshop with Ikea. Here, the participants were able to immerse themselves in the consumer’s role, in order to really absorb the responses and generate their own understanding. The models provide an important way of visualising knowledge, clarifying proposals and testing hypotheses.

“When you create very simple sketches, you allow scope for the users’ imagination and ideas on how things should work,” says Stefan Moritz.

“We’ve put together a book based on this project – a ‘playbook’ – that Ikea uses internally to build on its knowledge. A recipe for innovation, if you like.”

The project has won awards and been promoted at design and tech conferences, like so much of what the agency has done.

Living small

Another project focused on how to plan extremely small homes for compact living. Ikea and Veryday asked people in Malmö, Sweden, to take part in a study by spending a few weeks living in small test apartments furnished with prototypes to see how they organised their lives. The apartments included iPads where the test subjects filled in their experiences of the rooms and furniture, physical interviews were carried out during and after the project, and the children got to do drawings and put up stickers.

“We only care about things we have feelings for. So emotions are at the root of all innovation,” states Stefan.

Picking out the workshop’s participants from different parts of Ikea’s organisation was another success factor. Senior managers were mixed with store co-workers to evaluate the studies of how consumers plan a kitchen, for example. Many conclusions changed direction when experiences from different parts of the company’s customer interface came together. As everyone added their perspective, the model of the consumer’s purchasing process became increasingly multifaceted.

“It was a real revelation for me; how experiences from co-workers on the shop floor could be added to the managers’ theories.”

Front end innovation

In another case for packaging giant Tetra Pak, Veryday was invited in to cast an outsider’s eye over a new innovation programme: Front End Innovation (FEI). They began with some serious consumer insight work. In two markets, Brazil and China, the survey team went to people’s homes and discussed how they live, what packaging they had in their cupboards and so on. This brought the company in touch with customer stories that they would never have heard any other way: A single mother in São Paulo described, for example, how a certain type of frozen broccoli was the only food that managed to meet both her demand for safe and healthy food for her eight year- old son, and the son’s need for food that tasted good and was fun to eat.

“Understanding what tensions can lie behind the choice of a certain packaging, service or product can provide the catalyst for our work,” describes Veryday in its documentation of the project.

Tetra Pak’s employees were then unleashed on the model making and sketching:

“En route to all the innovative insights, we got to browse through all these little post-it notes at home. We haven’t always been part of the process before. It was quite chaotic, but fun,” says Karin Marcovecchio, Lead User Experience Researcher for the project at Tetra Pak. “We wanted to identify the consumers’ needs and problems, and our options for creating a solution.”

 

Daring to relinquish control

One of the issues with innovation is that people are wary of uncertainty. However, it’s an essential part of the process not to know what the outcome is going to be.

“That’s why they turn to agencies like us,” muses Stefan Moritz.

“Uncertainty is scary, it’s not something they teach at the management schools. But we say ‘Let’s go on a journey for ten weeks, we don’t know where it’ll take us or what will come of it – but that’s what innovation is all about’.”

Daring to relinquish control is the difficult bit but it’s necessary if you want to do something groundbreaking. Global tyre company Pirelli took the plunge when it asked American portrait photographer Annie Leibovitz to do the company’s classic calendar for 2016. Leibovitz took the job:

“When Pirelli approached me, they said they wanted to make a departure from the past. They suggested the idea of photographing distinguished women. After we agreed on that, the goal was to be very straightforward. I wanted the pictures to show the women exactly as they are, with no pretense,” she relates on the company’s special site for the calendar and the work behind it.

The Pirelli calendar 2016 is perhaps one of the most clothed of its genre ever printed. Thirteen women, all of whom have broken new ground in their careers, were photographed. Among them were artist Yoko Ono, tennis star Serena Williams, actor Yao Chen, who is also China’s first ambassador for the UNHCR, Kathleen Kennedy, one of Hollywood’s most powerful film producers and currently CEO of Lucasfilm, rock singer Patti Smith and Russian supermodel Natalia Vodianova, who formed the charity Naked Heart Russia.

The new departure was not slow to attract attention. Pirelli broke with the traditional calendar model in little to no clothing, and chose instead to feature strong women as they really look, through the lens of another outstanding woman in her field.

On the website, work is now under way on the task of compiling the company’s calendar history digitally – a journey through the development of aesthetic and social mores, not only via images by the best known photographers, but also with comments that place the different periods in their historical and political context.

How do you build an innovative and learning organisation?

Take risks. Move beyond the area where you feel knowledgeable and safe.

“It’s all about being a learning organisation. Because you always need to live in three time perspectives: today, in three years and in ten years,” says Stefan Moritz.

But how do you build an innovative and learning organisation?

Let’s return to Annika Steiber's research into Google. She says the same thing: give up control.

“A lot of it comes down to leadership and culture, the attitude you have towards your staff and the degree of freedom they have,” she explains.

But giving up control doesn’t mean letting the business drift in the wind, without any hand on the tiller.

“You need to have a small, stable core with a very clear vision of the goal for the company’s business. This makes the employees feel secure in their overall task. If they know where they’re going, they can grab the ball and run with it. There has to be a clear line to the company’s strategy and how they make their money.”

A clear goal and great freedom in the way they actually tackle the task. Then comes the follow-up of each employee – to see how things are going and offer support as a manager if the employee needs it.

“The manager’s job is to check in with employees quite often, sometimes weekly – asking how can I help you progress? What do you need from me in order to do your job as well as possible?” relates Annika Steiber.

This requires flat leadership with delegated decision making and broad opportunities for employees and middle managers to make their own decisions. Only when things are not working does a higher manager go in and provide a guiding hand:

“It’s not a case of lengthy debate at the strategy meetings. Speed is vital, so the key is to push the decision-making down to the people who know something about the issue.”

This in turn means that innovative companies have a large measure of trust in and respect for their staff.

“And that means a high degree of transparency. You give the employees plenty of information.”

Isn’t that a major risk? Perhaps, responds Annika Steiber, but companies such as Google generally have workers who live up to that level of trust. The key is to create an environment where trust and respect flourish.

“That’s the leader’s main task. A leader must be able to hold back criticism until it is really justified. If an employee makes a mistake again and again – then there will have to be a discussion. But not the first time. Otherwise you can start eroding the trust that existed between you and your co-worker.”

It is better to give people time to realise for themselves how the job should be done, rather than spelling it out for them.

“Control kills both creativity and trust. The need for control is perhaps innovation’s worst enemy. And it’s the job of the leadership to set the culture in the company.”

Trust, openness and challenges

She quotes British research into what differentiates the most innovative companies from the least innovative. Top of the list is trust and openness. Then comes the notion of challenge.

“At Google the managers go round challenging their staff, driving them to reach the peak of their ability. That takes two things: the leader must have substantial expertise in the area in question. But the leader also has to be able to stand back. They should be the coaches – not the stars. Involvement is the third common denominator: “The employees should feel that they’re helping to drive the company forward. Making them feel that they get to develop their ideas is a good way of achieving this,” says Annika Steiber, although she is quick to point out that this is not about using paid overtime to sit and obsess over the details.

“It should be rooted in a personal passion. Afterwards, one can receive recognition internally, share in the revenue or perhaps be allowed to run the new business if the project succeeds.”

And if it doesn’t, it should be seen not as a failure, but as part of the learning process. The fourth point is namely how you reward risk-taking.

“Welcome to the age of failure!” she exclaims.

“You can’t be quick if you don’t fail. In Silicon Valley, where Google has its headquarters, it is estimated that 70–80 per cent of start-ups never become a Unicorn, which is defined as a business with a turnover of more than a billion dollars.”

“Control kills both creativity and trust. The need for control is perhaps innovation’s worst enemy.”

The fifth factor on the list is freedom – being afforded the necessary degree of freedom over how a particular task or challenge is resolved.

“This is an extremely important factor in being creative. The brain can seize up in times of stress and perform less well in purely physical terms.”

So there are five factors that should guide a creative organisation. But there is still the issue of getting things done. To be innovative, you must be able to carry things through. Annika Steiber therefore adds a new term to the mix: dual organisations.

“Dual organisations can perform while also innovating. This requires parallel time horizons and structures,” she says.

Furthermore, it is no longer enough to have one source of innovation, such as a research lab or a research and development unit. You need multiple creative sources, both within and outside your ecosystem – all of which can feed into innovation processes that are then propagated in parallel within the company. There should be no blocks and obstacles along the way – the innovations should be submitted, reviewed, tested, fine-tuned and eventually offered to the company’s customers.

“Exploiting the stream of ideas and solutions from different directions requires several different structures and processes, not just the classic chain of R&D–product management–marketing–sales.”

Exploit new opportunities

After the dual company comes the notion of the dynamic company.

“The parallel time horizons and structures of the dual organisation are not enough in themselves. You also need the capacity and skill to keep track of what’s happening and quickly understand the possibilities, allowing staff to experiment and change the organisation in order to exploit these new opportunities. “One way of facilitating this is for decision making to be delegated down to those with the best expertise in the area,” says Annika Steiber.

So: Everywhere and always. Take decision-making down to the shop floor and make employees independent drivers of the company’s development. The leader’s task is to clearly embed the company’s vision and business, the actual goal. And to coach their team to joint victories.

 

 

  

 

 

 

STEFAN MORITZ (left), Vice President Customer Experience at Veryday

“I think the music streaming service Spotify is one of the very best innovations right now. A true innovation brings fundamental changes to the way people behave. A paradigm shift. Spotify’s service has changed the way we listen to and share music.”

 

 

 

 

DR. ANNIKA STEIBER

researcher, consultant, author and founder of Innoway

“I think the best innovation is the internet. It’s an incredibly significant innovation that enables people all over the world to educate and inform themselves, become experts, no matter where they live. It has also completely blown apart all the world’s business models – making way for new ones.”

 

Key pillars of the google model

  • SHOW TRUST Don’t spell everything out for your employees. Instead, let them work out how the job should be done. Remember that the need for control is innovation’s worst enemy.
  • CHALLENGE As a leader, it’s important that you know your field, but it’s even more important that you can stand back and put your energies into driving your team forward. You are the coach, your team are your stars.
  • INVOLVE Get the employees to feel that they are driving the company forward. Let them develop their ideas and share the benefits in some way.
  • REWARD RISK-TAKING Working innovatively is about learning quickly, working iteratively and daring to take risks, and so you have to be prepared for failure.
  • GIVE FREEDOM Give your team the necessary freedom and work-life balance. Good ideas rarely come under pressure and stress.
  • CREATE A DUAL ORGANISATION Working innovatively is not a one-man show. Involve all departments and let innovation processes propagate in parallel within the company.
  • BE A DYNAMIC FIRM Speed, proactivity and agility are key strategically and require everyone in the organisation to be on their toes, in order to embrace and implement necessary changes in the organisation or business model.

 

Text: Ulrika Fjällborg Photo: Karl Nordlund

 

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