Meet the transformers

In times of change, do you cut costs or innovate? Most executives are trained, hard-wired to cut costs. Some, they innovate and change – radically. We call them the Transformers.
Meet them at Strategy Summit.

There are three kinds of innovations

According to one of the world’s leading experts on corporate innovation, Professor Clay Christensen, there are three kinds of innovations; Efficiency innovations, Performance-improving innovations and Market-creating innovations.

#1 Efficiency innovations allows you to do more with less. Often, this means cost cutting, downsizing and making more efficient use of capital. Improving production lines, LEAN and organizational restructuring are all elements of this first category of innovations.

This kind of innovation can easily be handled in spreadsheets and financial assumptions. It quickly gives you improved financial metrics and will often make the board both comfortable and happy.

#2 Performance-improving innovations replace old models with newer models. iPhone 6+ or iPad 3 are perfect examples of ever-improving products. Flexible business models with a high degree of learning and adaptability are performance-improving innovations.  This category has many known factors and any innovation can be reasonably estimated on cost/benefits/market size/customer uptake and future cash flow.

Often, this kind of innovation follow a linear logic, as the same core product or service keeps getting incrementally better over time. As such, these innovations often fall prey to the radically new or highly disruptive forces.

 #3 Market-creating innovations are a very different category. These innovations create things that does not exist. They deliver value to consumers you do not know in markets you have never been. They require a bold, forward-looking board and management team to take a number of calculated risks as most factors are yet unknown. Market size? Who can tell? Price Point? Only volume and experience will show, but it is likely to trend towards. Required technology? Plenty, some of which does not exist. Business Models? We hope we will figure them out as we go.

Recent successes; Tesla Motors, Amazon Cloud, SpaceX, Zaptec, Uber, Snapchat and Facebook.

This third kind of innovation makes most executives and boards highly uncomfortable. It requires risks, aspirations, bold ideas and a high degree of business model flexibility to master.

What did you learn in school?

We need all three kinds of innovations. But, the problem is, most executives and boards are trained in the first two, with most emphasis on number one, Efficiency innovations. Spreadsheets, economic assumtions and safe calculations are the fall-back reflex to most executives facing troubling times.

Today we read in Norwegian newspapers; ‘’we’re facing a crisis”. The oil price is dropping; from $€115 to $47, with some analysts predicting $20. Our Prime Minister, Erna Solberg, speak publicly on the need for “more legs to stand on”, on the need for Norway to develop new industries. Industries using our technology, our skills and our advanced know-how, onto new areas and new markets. The Prime Minister is calling for Transformation. The Prime Minister is calling for Market-Creating Innovations. Problem is, most executives do not know how.

Leading strategic transformations

An increasing number of companies are starting to realize they need to change, to innovate and in many cases deeply reinvent themselves. The assumptions they took for granted; market stability, rate of external change, customer loyalty, global oil prices are changing faster than any scenario predicted – if they even ran scenario analysis.

One client of ours discussed a scenario workshop his team ran a year ago. He suggested, as a scenario, that the oil price would drop to $70 – or just below. Most executives in the room laughed it of, stating “That would be a huge problem for us”. Well, today it’s sitting near $45 – and dropping rapidly.

Industries outside the energy field are facing similar scenarios. Increased competition from abroad, using newer technology and lower cost structure cause the base assumptions to come under pressure, leaving management and the board searching for a near-term, quick-fix solution.

Across these industries, what they should be focusing on is learning to lead strategic transformations. What they should develop is the deep capacity for market-creating innovations.

Meet the transformers


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Around the world, a handful of companies are busy developing the deep capability of transformation and repeat reinvention. DSM, Dutch company with 24.000+ employees have gone through five significant waves of transformation, most recently leaving the oil industry to transform itself into a global leader in advanced life- and materials sciences. Behind this transformation is a long-term, capability building in innovation and new business development.

Shackelton Energy Company is leading the development of the next phase of the global energy industry. Their transformation is on a industry level (see the Innovation Pyramid and Nine Levels of Innovation). Their aspiration; putting gas stations in space and – over time – become just another boring utility…. Says the company, “Our fuel stations will change how we do business in space and jump-start a multi-trillion dollar industry. Much like gold opened the West, lunar water will open space like never before.”. Interestingly, the company is now travelling to the Nordics to team up with mining, oil and energy experts to develop the industrial operations. It is, says the company, “It’s like building an offshore oil rig—only in space’’

Now you can meet them, and learn first hand from these transformative companies, on January 29th.

Welcome to Strategy Summit

We believe most companies need to learn how to develop the capacity for market-creating innovations. Most executives need to understand what transformation means for their companies and most boards need to handle the risks and uncertainties in deep transformations. That’s why we invite you to our second annual Strategy Summit: Transformation. Taking place in Stavanger, Norway on January 29th, Strategy Summit, this one-day conference is all about  how you can lead strategic transformation.

Program Highlights

Putting gas stations in space: fueling the space frontier
Jim Keravala, co-founder, Shackelton Energy Company

Making space investible: show me the markets!
Erika Ilves, co-founder Transplanetary

Leading strategic transformation: DSM’s journey from mining to sciences
Rob Kirschbaum, frmr vp open innovation, dsm

Newspace – it’s time to think outside the planet
Ole Gunnar Dokka, member of the board, think outside the planet and strategy & innovation director, INT

The architecture of strategy & transformation
Christian Rangen, Partner, Engage // Innovate, co-founder Innovation Dock

And network with change leaders and innovators and learn new strategy tools for transformation.

Hope to see you in stavanger on january 29th.
Learn more at www.strategysummit.no

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Meet the transformers

On Tesla’s TV

It’s kind of cool to get picked up and featured on Tesla Motor’s internal tv stream.

Earlier this year we held the Strategy Summit: Learning to Work Differently with Strategy.
29 CEO’s and business leaders gathered in Stavanger, Norway for a full day of hands-on strategy tools and strategy cases. One of these tools, and one of these cases was Tesla Motors.
We used the company as a case study on the “Three Levels of Business Models” tool.

Today, we noticed Tesla Motors is running this on their company internal smart tv solution.
Cool.

On Tesla’s TV

Why we need new strategy tools – and how to use them

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(full interview from the FEI blog, Jan. 20th, 2014)

We recently had a chance to do a Q&A with Christian Rangen & Elisabeth Ovstebo, founders of Engage // Innovate and Strategy Tools for the Next Generation: Q: Chris, over the past four years, you and Elisabeth have worked to develop a series of new strategy and innovation tools. Tell us about the background. A: Sure Valerie. The field of strategy has changed significantly over the last 10 – 15 years. But the tools and practices in most firms around the world hasn’t changed at the same pace. Columbia Professor Rita McGrath, author of ‘’The End of Competitive Advantage’’ – strategy book of the year 2013- , says “Strategy is stuck”. We very much concur with her. Q: So what are these big changes that are happening in the field? A: When we look at the world of strategy today – the big picture – we see five major trends. #1 Business models are getting broken faster #2 The life time of large firms is declining rapidly #3 The speed of x is increasing exponentially #4 Trying to handle these forces, some firms are learning to cycle through a series of business models #5 Disruptions are quickly becoming the new normal

Q: So what should companies do? A: We recommend two steps: Number one: companies should move from “strategy as analysis” to “Strategy as innovation”. This requires a fundamental shift in how strategy is perceived and requires a change in mindset, ambitions, perspectives on the future and business model logic. This is also where most innovation heroes should direct their energies – connect their burning passion to the strategic context of the firm.

Number two: strategy should shift from a “linear plan built around defending a core business model” to a “continuously shifting through business models, spread across a time horizon”. This is the simple core idea behind one of the tools, the Strategic Innovation Canvas. Think of it as juggling a high paced innovation portfolio at a strategic level. This requires constant innovation, proactive change and a series of new management skills. Rita writes well about it in her book.

Q: So why is this so difficult? A: Well, it shouldn’t be. We have ample research. There are stacks of excellent books on the topic, including ‘’The End of Competitive Advantage’’, ‘’Game-Changing Strategies”, “Strategic Transformation”, “Business Model Generation” and “Seizing the White Space” to name a few. But there’s a big gap between reading the material and “doing”. We need to move from primarily theories and text, to clear, visual thinking and hands-on training and doing. Q: And this is where your work around new tools comes in? That’s why we’ve spent the last four years, not only on original research, but on developing visually strong, hands-on, action tools. Tools that are easy to use. Tools that can be learned in a matter of hours. Tools that help executives be more successful with strategy and innovation. Tools like the Innovation Pyramid, Innovation Thinking Modes and Innovation vs. Reaction, to name three, all build on extensive research and background work. But they are easy to understand and easy to put to use, without having to go through all the textbooks themselves. That’s the key. So far we have 14 tools online, with more designs in the pipeline. All of them available for free at www.strategytoolsforthenextgeneration.com, under the Creative Commons philosophy. Q: Elisabeth, what are some of the effects you’re seeing with firms putting these new tools to use? A: Well, there are three main effects. First, innovation quickly comes an integral part of strategy. People see that new thinking and new ideas – strategic creativity – becomes a core asset. Tools like Strategic Innovation Canvas and Three Levels of Business Models just enables this very natural move of strategy = innovation Second, strategy becomes much more of a dynamic and inclusive process, through more creative workshops and lots of visual thinking. Working with visual strategy facilitators, like Holger Nils Pohl is just a fantastic experience. He will also be joining our workshop, by the way. Finally, people develop a shared understanding, a shared language and shared action around strategy. Alex Osterwalder has worked energetically to design a shared language around business models. We’re seeing the same thing around the wider field of strategy. We should also add, for most clients, we make strategy fun and exciting again – like it should be. Teams we work with drive strategy with a far more innovative mindset and as a result a more innovative strategy follows.

Q: And you will cover some these tools in your workshop? A: Yes, we will. We are very happy to get a chance to present and share our work at FEI. This is a fabulous arena with fellow innovators from around the world. We always learn so much. Our workshop will be very much a hands-on, doing, working session. It’s pretty exciting to put 25 – 30 executives in the same room and see them work with each other, quickly helping each other solve actual strategy and innovation challenges. While we will use some cases, like Tesla Motors, Google and Amazon; our focus is doing and learning. We want to see people master new tools in 3 hours – rather than just hear about them. We try to stay very interactive.

Q: Chris, what are some of the challenges you’re facing when working with these tools?
A: Throughout our executive education programs, our workshops and consulting projects, we see two key challenges.
The first is “lack of time”. Over and over again, we find key management groups being simply too busy, too operational to contemplate fundamental shifts to their strategic logic. For many, replying e-mails and handling current clients gets all their attention. The day-to-day operation gets in the way of time to seriously dive into new strategy tools and radically change the trajectory of their futures. We call it the “pull of the present”. In our experience, this is clearly the biggest challenge.
Second, is a perceived a lack of strategic creativity. “I’m not a creative person” or even worse, “we are not an innovative team”. We hear this a lot. But it’s not true. Building on the words of David Kelley of IDEO, “Anybody can be strategically creative  – you just have to learn how’’ (ok, so we added strategically). His recent book, Creative confidence, is a great read on this subject.  But really, we spend a significant amount of time building creative thinking skills and revealing how the mind actually works – and how this impacts and inhibits our innovative thinking. Once teams crack this code, creative strategic options flow forward and truly create engagement and buy-in.
Q: On a closing note, what would be your top two advices on what not to do for firms moving into 2014 on the topics we are discussing?
A: Number one; don’t believe your present core business model will last as long as you think.
With the speed of change increasing exponentially, a lot of companies will face disruption and industry upheaval in the coming decade. Start laying the groundwork for your next series of core businesses models today.
Number two; don’t treat strategy and innovation as two separate disciplines.
The strategy people and the innovation people should be connected at multiple levels. They should run joint programs, workshops and company-wide processes. Working together, they should define strategy roadmaps, experiment with new business models, run innovation portfolios and redefine the way strategy gets done. This is truly where innovation needs to be happening, at a strategic level.
Editor’s Note:
Christian Rangen & Elisabeth Ovstebo are founders of Engage // Innovate and Strategy Tools for the Next Generation. They are strategy & innovation consultants, business school lecturers, authors, frequent innovation speakers and happy owners of a Brazilian management camp. Christian is also a member of FEI’s advisory board.
Since 2010 they’ve been on a mission to develop new strategy & innovation tools. So far, 14 tools are published at www.strategytoolsforthenextgeneration.com. They work with multinational companies to establish new innovation and strategy practices. They also run Engage // Innovate Ventures, investing in disruptive business ideas.
Meet Christian & Elisabeth at their half-day workshop, “Your Future Innovation Tools: Strategy Tools for the Next Generation” at Front End of InnovationMunich and Venice.
* All illustrations by Holger Nils Pohl and Christian Rangen.
Why we need new strategy tools – and how to use them

A line-up of new workshops

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Over the last few months we’ve been hard at working in developing new workshops around our strategy & innovation tools.

We’ve been working with companies like Statoil, Aker Solutions and Tekna to test and refine our concepts. We’ve held keynote talks for companies like Siemenes, Schibsted/Stavanger Aftenblad, Aarbakke and Atea to share our thinking.

At the same time we’ve been invited back to both the World Innovation Convention and the Front End of Innovation to run new innovation workshops.

We are pleased to share our new work and hope to see many of you at some of these amazing innovation events.

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Making [X]happen” and ”Your Innovation Toolkit” are both developed for the World Innovation Convention in Cannes. A global platform for innovation leaders, the WIC is a superb arena to share, launch, test and experiement with new workshop formats. These two are both designed to give hands-on training in making innovation happen in established organizations.

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Front End of Innovation is one of Europe’s leading innovation event. For 2014, The World Leader in Advancing Innovation invite global innovators to join in both Munich (february) and Venice (March). Google, Samsung, IBM, HP and McLaren are just some of the top cases to be presented. Innovation experts Rowan Gibson (author of the excellent ”Innovation to the core” and Navi Radjou and John Bessant will share some of their latest thinking.

We are excited to run two half-day workshops. Our goal: help global innovators make innovation happen.We focus on powerful, hands-on, learning. and will help people master new visual innovation tools. Welcome. and hope to see you in 2014.

Learn more about the upcoming workshop Your future innovation tools: Strategy Tools for the Next Generation

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Run these workshops in-house?

Are you interested in learning new strategy & innovation tools?
Are your company looking for new ways of creating strategy?
Do you want to make innovation happen faster?
Contact us to see how we can run these workshops at your company.

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A line-up of new workshops