consultaglobal

Jarkko Sairanen, Nokia’s former VP of Corporate Strategy:

“If a formula existed that could deliver successful innovations on schedule, every company could be a winner. Most managers will agree that innovation drives success, but there is no blueprint to show them how to generate it”.

“Nokia has always been ranked quite highly in terms of being innovative (…) we think in terms of systems or platforms, which provide the opportunity for us and others to further innovate”.

“A product or a feature is just one incident – it might help you to increase your market share temporarily, but it does not necessarily create sustainable value. You have to continuously renew, and drive your paradigms from a perspective of sustainable value creation. Thinking in systems is long-term oriented”.

McKinsey’s interview from their Innovation@Scaled paper addressing insights on marketing and sales in the telecommunications market.

Nokia makes funding available for internal projects which would fall outside the focus of its business units. This model leverages corporate venturing (e.g. in-house incubator model) and venture capital practices (e.g. access to seed funding, legal and HR support).

The Venture Partners and Insight & Foresight’s Innovent teams work on joint development of new ventures and partnerships with third parties. By funding early stage ventures, the company becomes part of innovative enterprises: “Nokia has invested in Nokia Venture Partners to get venture rates of return in addition to real-time market feedback about new technologies and business models. Additional limited partners in the firm include Goldman Sachs, CDBWebTech, and BMC Software, among others”. Like.com is one of the supported ventures (above picture). Additionally, Nokia continues to develop their acquisition strategy, Enpocket (mobile marketing) and Navteq (maps) being two of the company’s most recent acquisitions.

What follows is my summary of McKinsey’s interview with Jarkko Sairanen focusing on the pricinciples behind Nokia’s innovation recipe.

• There is no magic formula: innovators have an appetite to experiment, to try new things and to iterate concepts. Jarkko states the need “to accept failure and an understanding that some overlapping work will take place in the organization (…). You need a small team that extends across the organization to put the next paradigm forward (…) I don’t think we are a textbook example of a systematic approach [to] managing a pipeline and portfolio of ideas where we rationally and analytically decide that we can afford seven out of ten ideas (…) a forum makes informed decisions based on analysis of data (…) if your strategic decision is clear, this is a more powerful way”.
• Systems approach: radical innovation goes beyond just planning features or standalone products, teams consider the context and the ecosystems in which the overall solution delivers benefits for those part of the value chain. This approach allows others to succeed while creating value that supports and promotes Nokia’s platforms. Jarkko’s answers emphasize the need for innovators to switch from a ‘feature’ to a ‘platform’ mindset.
• Sustainability: don’t limit your company’s opportunity to a one-off. Think of what it takes to become a serial innovator and the alternative evolution paths to achieve a given vision, “make what you are doing sustainable in the long term”.
• Agility: adapt, think of what it takes for your innovation to remain relevant over time, “being agile means continuously embracing the environment as it changes and grasping the opportunities it offers”.
• Innovation culture: network, decentralize and empower. “Don’t attempt to guide or drive everything from the top down. A lot of decisions occur deep in the organization (…) we don’t have a separate process or an incentive structure for innovation – it’s part of the work that people do (…) we are a networked organization that is connected to innovation (…) everyone is extremely interdependent (…) instead of thinking in terms of silos and separate kingdoms”.
• Forward looking view: develop a vision, look at trends across the value chain, including the competitive environment. Provoke strategic thinking and articulate missions and guiding principles. Leverage this understanding in the present: “we do vision work, which we call the Nokia World Map (…) the output is available for all our employees, so everyone can read it and people can discuss it. This stimulus is brought into the organization and people begin to act on it, and realization begins”.
• Emerging Business Unit: this is Nokia’s corporate venturing unit, leveraged to ‘incubate seeds’, involving different teams experimenting with potential innovations, “this unit has dedicated funding, so they can go to market fast and easily test things. And then we build seeds for deeper innovation at the Nokia Research Center”. As shared at the beginning of this post, there is another fund which focuses on investments on start-ups, this one being the equivalent to a venture capital fund.
• Timing: “we move things as soon as feasible into our core activities, but we shouldn’t move them too early. Finding the right time and having a low ‘burn rate’ so innovations do not die too early are critical things. Managers require insights and intuition if they are to understand what makes sense at what stage”.
• Be local and global: “A lot of innovation occurred in Europe because we standardized smartly (…) the Internet paradigm and the social networking innovation Web 2.0 (…) has been driven in the United States (….) look at China, which has its own model (…) take things locally or regionally where they are born, and deploy what can be deployed globally”.
• Go-to-market capabilities: for innovations to realize their potential, there is a need for a company’s ‘backbone’ that’s capable of producing, shipping, selling and delivering.

“Take the Internet with its open technologies and the open-end standards used. This will now be much more difficult for companies that don’t already have the right mentality and assets in place”.

Jarkko Sairanen, Nokia’s former VP of Corporate Strategy

“If there is something good in the world we will copy it with pride (…) if we are the inventor we take the inventor’s pride with the same rigor. It really doesn’t matter [one way or another]“.

Anssi Vanjoki, Executive Vice President and General Manager of Nokia’s Multimedia unit.

Click here if interested in reading about other company’s innovation recipes. See links at the bottom of that posting.

J. de Francisco Chicago. 15 December 07

Most recent blog Innovation search engine Map of innovation events Innovation newsfeed Blog newsfeed

“The Top 10″ at the time of uploading this article: [1] “Visual Futurist: The Art & Life Of Syd Mead”. [2] The Economist & Technology Review: “Lessons From Apple’s Design”. [3] Design Concepts: Future Car. [4] Innovative Mobile Phones: Objects Of Desire, [5] Transforming Your Old Laptop Into An “Internet Communicator” (2). [6] Free Web 2.0 Meeting Tools: Vyew, Yugma, Dimdim, Zoho. [7] HP’s Innovation Recipe: “IPO”, The Innovation Program Office. [8] Mobile Phone Concepts: Egy Studio. [9] Transforming Your Old Laptop Into An “Internet Communicator”. [10] The Globalization Of Innovation.