Practical Tips for Internal and External Innovation. Examples from Emergency Response Center, Tallink Group, Orkla Estonia and Combient Foundry
The last Innovation Leaders Club event in 2020 was aiming to share practical tips on how to innovate companies from the inside and how to do it with the help of external partners.
The first panel discussion addressed building an innovation funnel and strategy. The panel was moderated by Andra Altoa and her questions were discussed with Kätlin Alvela (General Director at Emergency Response Centre), Annika Oja (Chief Marketing Officer at Orkla Estonia) and Katre Kõvask (Head of Food and Beverage at Tallink Group).
How is Innovation Strategy Connected to the Company’s Business Strategy?
Andra Altoa started the discussion by throwing out an idea that innovation is a dynamic and volatile process that can cause some headache, so it is good to rely on the experiences of others.
Kätlin Alvela continued that for Emergency Response Center, the vision is to be a smart and innovative organisation providing the feeling of security to the whole society.
According to Annika Oja, Orkla Estonia’s innovation is focused around product development of local brands. Therefore, Annika Oja’s main mission in Orkla is to unite two previously separate departments – marketing and product development.
Tallink Group, being one of the worst-hit companies in Estonia by Covid pandemic, is looking for new ways to do business onshore. Before the global crisis in tourism sector Tallink’s duty-free trade made up to 55% of the company’s revenue. But big crisis also brings along opportunities for big innovation. Katre Kõvask’s key principle throughout her career in different industries has been “Innovate or die!”. According to her, innovation is like controlled chaos but it triggers the need for change while always keeping the bigger picture in mind. She also warned to be ready to lose some colleagues in this change process, especially in big corporations. As for the conclusion, she recommended not to fall in love with your own idea but always be the strictest critic of it, and always listen to your client.
Where does the biggest innovation come from – top down or bottom up?
The question from Andra Altoa was “Which way does innovation work better – leveled from the top management down to the employees or leveled from the employees up to the top management?”
Kätlin Alvela explained that in Emergency Response Center, innovation is born both ways and sometimes novel ideas are initiated on the emloyee level but sometimes on the political level in the Ministry. She also told that a great part of their innovation comes from the people who use their service and dictate the technologies and channels used in their services. „The strategy still remains the baseline for planning innovation in the organisation,“ Alvela said.
Emergency Response Center does not have very hierarchical innovation processes in their organisation due to their small size. Ideas are discussed at weekly meetings and the organisation is ready to be in a change process constantly.
Annika Oja said that innovation strategy is a big part of Orkla’s business strategy and accounts for a relevant portion in their organic growth. Robert G. Cooper’s Stage-Gate system is used in all of Orkla’s companies and business areas. “We have formed project teams that deal with innovation projects. In addition, we have an Innovation Council which confirms the decisions taken by the project teams and brings them to the board with data analysis and justification. The board meets twice a month. Ideas go through three to five gates before they are launched to the market. The average time to market is quite long – 12 months as we have a lot of decision-makers both inside and outside the company.”
Andra Altoa emphasised the importance of the innovation funnel. As she put it, “Innovation is not only about ideas, courage and a lot of testing. The most relevant question is how to do this all in a structured way.”
Katre Kõvask’s recommendation was to agree concrete KPI’s which would be set to test new ideas.
How to Be Successful in Innovation with the Help of External Partners?
The second panel discussion was moderated by Mart Maasik and the guests, sharing their receipts for successful innovation with external partners, were Combient Foundry’s Vice President Lauri Lehtovuori and Anna-Karin Lindblom, Director of Accelerated Innovation at Husqvarna.
Combient and Combient Foundry
Combient was created 4 years ago by 11 Swedish and Finnish industrial corporations with a vision to accelerate digital transformation in industrial companies. Nowadays the network is bigger, comprising 29 global companies. „Combient’s role is to create the network, share knowledge and initiate cooperation. The vision is to reduce the time to market of products and through that, find new ways to grow business,“ Lehtovuori explained.
Since 2018, 53 business partnerships have been signed with the help of Combient, out of which 31 are long-term projects and 6 are pilot projects.
Combient Foundry’s principle in working with startups is to be a demanding client and offer them the market, not to acquire or mentor them.
Husqvarna – 330 years of innovation
Anna-Karin’s job in Husqvarna is to find partners and innovation opportunities. “Our strategy in business as well as in innovation is similar – we concentrate on the user experience,” she told. „Our products must meet three criteria: desirability, user-friendliness and value. If we can meet these three, we can create a great user experience and be in demand on the market.”
When innovating, Husqvarna works according to three key principles: testing new opportunities, connection with strategy and vision, and open innovation. New business opportunities are tested against three aspects: the opportunities offered by technology, business opportunities, and user and customer values, all of which provide input for creating a minimum viable product (MVP).
Open Innovation means finding the right partners considering both – technology and business opportunities. “In this area, networks are really important to effectively practice open innovation. Combient, for example, is one of those important networks,” said Anna-Karin Lindblom.
Moderator Mart Maasik asked if the market leader position and long history allow Husqvarna to be more cautious with innovation but Anna-Karin Lindblom confirmed that they are actually competing with time like everybody else.
Mart Maasik also asked about Combient Foundry’s experience with working with startups and scaleups. “What are big corporations looking for in startups – is it a new business model, new technology or new team?” “It’s a combination of all of these,“ Lehtovuori replied. Anna-Karin Lindblom agreed and added that implementing new technologies is often considered the easiest way but adopting new business models the most challenging – but the most profitable and impactful at the same time.
Lastly, Mart Maasik asked both guests how they choose their cooperation partners. Lindblom answered that at Husqvarna, they rely on networks such as Combient Foundry to make the selection. “More important than having many options to choose from, an efficient way of measuring the results is more important. And we think Combient has found it.” Lehtovuori said that their methodology is to define the corporate challenge very carefully, after which sometimes up to 100 solution proposals can be received for each from different start-ups – their job then is to recongise the right one and find the optimal match.
Both Lauri and Anna-Karin engaged in a small forecasting task for 2023. They both agreed that in three years we will see even more innovation projects born in cooperation between corporations and start-ups because the challenges and trends we are facing are so great that cannot be addressed by one company alone.