In our Innovation Interview series, we caught up with Mike Hatrick, Global Head of IP Strategy & Portfolio, Volvo Group Trucks Technology, to discuss how design thinking improves innovation, the power of business model innovation, and the key to transforming ideas into market winning strategies.
What is the key to transforming ideas into market winning strategies?
Hatrick: In my experience the most important factor is the attitude and ambition of the highest-level decision maker involved. If they aren't excited to transform the idea then it is going to be at best an uphill struggle, at worst impossible. Therefore, even if that person is asking for more innovation it is critically important to understand what kind of innovation they want. To solve what problems? Within what boundaries? At what level of risk? How radically different to what we do today can they tolerate?
It can be useful at the outset of a drive for innovation program to test some "what if?" scenarios with the leadership and get their reaction. Otherwise the disconnect can mean pushing what you think are your best ideas up to the leadership only to find that it isn't what they wanted at all and this means wasted effort and perhaps even discredits the innovation program.
How does design thinking improve innovation?
Hatrick: It forces the innovator to properly explore the problem they are trying to solve, which leads to better ideas, better solutions and most likely more than one option to choose from. In my experience when faced with a problem very experienced engineers tend to reach into their memory, find a similar problem they have solved before and match it to a solution. This may very well solve the problem but it won't be very innovative. It also forces the innovator to engage with real life users. It might seem obvious to do that, but again my experience is that often highly experienced people think they already fully understand a problem and have no need to engage with the user. They are usually surprised by the result!
Why are customers key driving factors in the market success or failure of new products and services?
Hatrick: It is an escapable fact that whatever your product or service is it ultimately ends-up in the hands of the customer. So, for it to be a success they have to want it, in fact for it to be really successful they have to love it. For me it comes down to the problem description. If the innovation solves a customer problem in a cost-effective way then it has a good chance. Of course, many of the more famous innovations solve a problem the customer didn't even know they had. These are more difficult to uncover, but again this is where design thinking, done well, with thorough observation and later rigorous prototyping improves the chance of success.
How can innovators learn how to work alongside the technologies that will shape their product innovations of the future?
Hatrick: It varies depending on the field innovators are working in. Sometimes the technology exists but in an immature form. Here collaborations with universities are very important because not only may the immature tech exist there but they have the ways and means to test and develop it rapidly and at lower cost. Increasingly industry is trying new methods to imagine future technologies, such as scenario planning and storyboarding. I also recall a great story I heard at a conference from a member of the US Intelligence community who described that they designed and tested apps on supercomputers that would be impossible to run on normal computers, because it was a way to demonstrate technology that would be possible to use some years in the future once computer technology was more advanced. I thought that was pretty cool.
How does leadership, teams, and the environment help empower and accelerate innovation?
Hatrick: This is a big question! Very many organizations try do this and I would say a minority of them are successful. This is because it is complex; there are so many variables. It depends on the organization's culture, the attitude of the leadership, the urgency of the problem, to name only a few. That means that there is no "one size fits all" solution, and it also means that there are a multitude of theories, methods and tools available on how to do it. So which one to choose? I know, because this is what I do and I have seen as many failures as successes. My advice is quite simple; don't treat it as an experiment, it must be taken seriously. That means treating it like any other organizational improvement - what is the problem that needs to be solved, what is the starting point and what does the end result look like? Then plan it like any other project, and deliver it with the best team available, preferably including people who have done it before somewhere else. If it is so important to the organization, then a "let's learn as we go and see where we end-up" approach is most likely going to come-up short of what is really needed.
Why is business model innovation a powerful way to breakthrough?
Hatrick: Because it can change the paradigm within which you are working. Innovating a product to be 5% better is still innovation (and the most common form of it) but innovating a business model can make a step change that is not only powerful but can be difficult for the competition to replicate or catch-up with. But the second part of the question infers an understanding of the big problem, which is that for an organization to try to innovate its own business model is a very scary and risky thing to do. Potentially it means new distribution channels, manufacturing infrastructure, sales and marketing, etc. and this is why it is so much easier for a new company or start-up to do business model innovation. To stop conventional business models being a barrier companies can create spin-off companies or new divisions with their own autonomy. This is what Nestle did in order to allow Nespresso to germinate and grow.
Want more on innovation? Attend Back End of Innovation taking place October 22-25, 2017 in Orlando, FL. For more information or to register, click here: https://goo.gl/x1f0el