Strategic Innovation can be a true Innovation Odyssey; a journey into the land of the unknown. To achieve results can require a lot of personal courage and perseverance. If you would like to discuss why, take the opportunity to hear this Innovation Blitz at Convergence 2000.

Do you think the market conditions have changed since the days of Henry Ford? - Well, I believe that the basics of business logic have changed, and still are changing - in ways that should be reflected in innovation.

In old Industrialism, we produced and delivered products. Since mass production was new, it was enough to deliver mere functionality at a low price to create huge markets. In the later period of Information Age, the output of the value chain changed into solutions: Focus was on customer needs, and the products were integrated into solutions to meet these needs.

Today we face a new transition of the market. Where the previous was from selling boxes to selling solutions, the new is adding on values of symbolic nature: The values of brand image, corporate visions and emotional signals. Focus is now on creation of Meaning to the customer, either as business concepts (in the Business-to-Business market) or just as "sense" or emotion (in the consumer market). To create meaning we produce messages or stories. It’s a totally new arena, a semiotic arena, where the dominant value is meaning, and messages become the dominant output. So I suggest we call the new market context the "Age of Meaning" (some futurists suggest "Dream Society" or "Age of Consciousness").

The Discipline of Strategic Innovation

I see strategic innovation, as innovation in terms of the Age of Meaning, and my Innovation Blitz at the Convergence 2000 will describe a case story from this new field. The difference between industrial innovation and strategic innovation can be described as different process directions. Industrial innovation traditionally is technical driven, where as strategic innovation is driven by the values of the end users. "What does it mean to the end user?" is the overall questions, which gives strategic innovation its direction. So you can say, that in a way we work backwards, since we begin asking the questions, which previously were let over to the marketing people, once the innovation process was fulfilled. In strategic innovation we begin with the meaning or the message and from this we build business strategies, from where we can derive the goals for product development.

In strategic innovation we also try to apply the methods and principles of creativity into the levels of Strategy, including the use of personal intuition and imagination (the "heart-dimension"). I think we can say that there is a common demand for more creativity in the strategic field. But - at least to my experience - when you try to do it for real, especially when you substitute reports with intuition and imagination, you meet all sorts of resistance in the organization: Lack of support, attacks from other departments etc. How come that we meet this resistance, if everybody asks for more creativity? Why does it take courage to think with the heart? If you would like to discuss this subject, please visit Convergence or www.strategic-innovation.dk

The Case Story from Ericsson Denmark

My case is an eyewitness report covering the development of a holistic business concept that was given the name Ericsson Home Communication Concept. It is an approach to create a new mass market for easy-to-use information and communication services to residential homes by the use of Internet-related technologies. The concept was shown in public at the CeBIT Fair in Hanover, March 1999.

In the beginning, our concept served only as a message. But it showed off to have great value as such. We have built up strong customer relations based on the power of this message. You can call it customer seduction, but really, it is more the other way around: The customers of today care about who you are, what you stand for, and how your visions are - perhaps even more than they care about functionality and technical quality. Technical quality is prerequisite; it is not the way you differentiate from your competitors.

We ran into some fundamental organizational problems; at that time (first half of 1998) Ericsson was organized in business and product units according to the technical nature of the products. The problem was, that our concept was not based on single products or technologies - it was exactly opposite: It was a holistic concept and therefore it spread out across all organizational borders, making it impossible to find sponsors from product units.

Looking back at what we have been through sofar, we can describe the main phases like:

• Building knowledge and mental readiness - this was our analysis, in which we used the focus groups and future workshops as inputs
  
  
• Concept development - From the day, where our mental readiness exploded into a vision, we began developing the concept in details as a message, that we used for communications
  
  
• When first appointed to join the CeBIT fair in Hanover, our story became a corporate marketing project, and we began developing the demo for CeBIT
  
  
• Based on the contacts from CeBIT we are now developing the business concept into real business and real solutions.

As the latest news, Ericsson has made a joint venture with Electrolux (manufacturer of household appliances). This joint venture has the mission to fulfill the promises of our Home Communication Concept - so we are bridging the gap from vision to real business.

Arne can be reached at email: arne.s.madsen@ericsson.dk. Check out www.strategic-innovation.dk