Thoughts on entrepreneurship and innovation

Thoughts on entrepreneurship and innovation

Thoughts on entrepreneurship and innovation

Author: Mikael Fenger, Head of Digitalization at INVIXO Consulting Group A/S
Date: 01-11-19

As we approach the 1-year anniversary of the Innovation Lab at INVIXO Consulting Group, I would like to share some thoughts and reflections I have had this past year related to our innovation and product development.

If we start with a wider overview, it is evident that the business situation we are facing today is fundamentally different than just 10-15 year ago. We have entered a paradigm where the parameters ruling business success and failure are in rapid development.  On top of this is the speed at which business’ are expected to adapt to the changing needs and challenges increasing exponentially. The outcome of this is that the growth and decline of businesses are happening at extreme speeds compared to earlier – the evolution of The Big Four tech-giants are an obvious picture of this, and the following statistics illustrates it even more vividly:

  • 88% of all Fortune 500 companies has disappeared in the period 1955-2015
  • Average time of existence for companies has been reduced from 61 years to 18 years in the same period

MIT Technology Review

The big difference is not changing business conditions, as this has always been the case, but the speed at which these changes are occurring, and due to the primary parameter of change being digitalization. We are currently looking at an exponential growth in the digitalization of products and services – it is of course difficult to measure the rate of exponentiality, but considering Mores law stating that the speed of chips will double every 24 months, then considering the totality of technologies pushing digitalization this will rather mean a doubling of product digitalization every year.

I attended an interesting conference speak by scientist and digitalization expert, Reimer Ivang, where he spoke about the challenges and effects of exponential digitalization. A central point of his was that one of the main challenges of innovation in the age of exponential digitalization is to have sufficient power of digital imagination. When digitalization evolves at the speed we experience today, it is becoming increasingly difficult to imagine and conceptualize how this drives customer needs and it therefore both obscures and pushes the boundaries for product development. Most people agree to the fact that a mobile phone today is more of a computer, and we are already seeing smart refrigerators, which is just as much a computer that can order groceries, track expiration dates, make dish suggestions – and of course, refrigerate.

But on another level, the power of digital imagination gets challenged when we try to conceptualize how Maersk makes computerized systems  that drive distribution of goods, and as a part of this operates freight container vessels, how Novo Nordisk makes computer systems that assist diabetes patients, and as a part of this produces insulin – where the products that today are the center of the business, will be just one element in a digitalized service portfolio.

So, in order to be a successful entrepreneur, you need to feed, culture and nourish your collective power of digital imagination.  This if why we at INVIXO has defined the following guiding principles for our work with idea generation and product development:

Collective Intelligence

It has been the norm for an extended period of time that we correlate “intelligence” with the “genius individual”. However, most successful products have been developed as collaborations.  Studies in collective intelligence show that it is not the intelligence of the individual group members that are primary factor for collective intelligence, it is much more about the setting of the idea development, the personality of the group members etc. Research shows that a lot of different factors impact the strength of the collective intelligence of a group, but a few of them showed always to improve the collective intelligence.

  • Social perceptiveness – Understanding and reading the emotions of others increases the groups collaboration ability and therefore collective intelligence
  • Democratic mindset - Evenness of conversational turn taking and responsiveness to ideas/opinions from others makes the investment from the individual into contributing to both the innovation part and to the actual work going into building solutions
  • The more women the higher collective intelligence – read it and weep, gentlemen! The reason for this is probably that women in general are more socially perceptive and democratic in group dynamics.

At INVIXO these learning has formed these 4 core principles for how we work:

  • Always explore the logic of the ideas and opinions from others
  • Stick to the topic – and help participants to do the same
  • Build each other’s ideas better by asking bridging and elaborating questions
  • All participants must get a chance to provide feedback

These principles are applied to formal ideation meetings, but also to how we interact in general – this is based on the fact that ideas are often born out of everyday interactions and not necessarily from staged “innovation workshops”.

Focus/specialization

During the first year of product development within our Innovation Lab, we have generated and evaluated more than 100 product ideas and have invested time on more than 25 specific product ideas. The ideas have ranged from illusive ones: “wouldn’t it be cool if we developed a tool that could…”, to very specialized product ideas solving specific challenges that we are experiencing in our engagements with customers. From these idea/product development projects, we have come to understand that it makes sense to focus our product development on the areas where we have deep and specialized knowledge – which are integrations and IT compliance/quality control.

It has proven easier to apply “power of imagination” or be on the forefront of what our customers need within areas where we are specialists. It does however pose the risk of thinking that you are “self-sufficient” in knowing what problems your ideas should solve. This is also the reason why we in our initial business assessment of a potential product idea has a parameter on possibility of involvement of technology partners and/or customers in product development.  We are at INVIXO generally very focused on using our technology partnerships and selected focus customers as co-development partners. We have defined a rule stating that product development cannot enter the development stage without either a technology partner or customer has been identified and agreed to collaborate and/or provide input to the product. This is an effective way of securing that the time-consuming phases of product development is only initiating, if we have direct access to resources that can assist in defining use requirements as well as driving product sales.

‘Build fast – fail fast’ approach

Our product development follows a more or less traditional design thinking model, but we are very focused on applying a “build fast – fail fast” approach to this development. This ensures good business sense as it is a way of limiting or controlling your investment and increase the likelihood of products actually finding its way to paying customers. Another argument is that with the exponential speed of digitalization, you need to have your products out as early as possible, both to test it against customer needs, but also because it often will be part of forming trends and development, and you want your product to take part in driving the trends.

This is also the reason I prefer to call what we do for “Entrepreneurial Innovation” as this emphasizes that the aim of the process is to bring new and innovative products and technologies to the market. It is not “just” an innovation process aiming at fostering new creative product ideas, and it is not “just” entrepreneurship aiming at effective design, building and launching new products – it is the combination of the two.

All in all I look back onto the first year of INVIXO Innovation lab as very inspiring, and as a year where we have learned a lot about how to create an entrepreneurial innovation culture, how to do product development, and as a year where we have developed some very interesting and promising products that we are in the process of preparing for launch. I look very much forward for what year 2 in INVIXO Innovation Lab will bring.

 

 

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