An interview with Frank Vrancken Peeters about the impact of innovation on our employees.
Imagine that you are CEO of a technology company with offices worldwide. You have some great years behind you, with record profits. There were years in which your products - computers - seemed indispensable, and everyone had one. Until now. Computers are still used, but the consumer is increasingly on their mobile phone. You know you have to come up with something new in order to secure the future of the company. A very young company with only three employees has already made an app where large files can be stored. They are suddenly your biggest competitor. You wonder: how do I ensure that my employees think like these young companies/startups and come up with new products?
Many executives face the task to increase the innovative capacity within their company. And because their business, with thousands of employees, cannot simply adapt to this new reality, they often get the advice to set up a lab next to the company. This is a place where designers and programmers, that have nothing to do with the existing activities, have been given room to invent new products and services. They work in a flexible manner and the same as a startup does.
One lab has many advantages, since employees are not paid on an earnings target, but the number of new products they develop. They are not kept from their work due to other priorities that do generate revenues and profits such as a website that needs to be tracked, and they can make mistakes. But there are also disadvantages to completely setting the lab apart from the daily operations. The impression could arise, to employees who do not work at the lab, that these lab workers are in an ivory tower working on science fiction: they are developing products that are never appropriate for the market. They come up with products that cannibalize and affect their profit target. The consequence is that new products that are developed within the company are immediately dismissed and never make it to the market.
The question remains: what to do? Discussions with device maker TomTom - not so long ago a startup itself - and the publishers Sanoma and Wolters Kluwer show that the right way to approach innovation is a search. In Sanoma, for years, employees were pulled into the lab and taught entrepreneurship. The aim was to create an innovative culture within the company. But the company is now moving away from that. Wolters Kluwer, on the other hand, is opting instead for including all 19,000 employees in their innovation process, and letting innovation cascade into all its 170 countries where they are active. What binds the three companies together is that doing nothing is certainly not an option.
Wolters Kluwer holds innovation competitions
Wolters Kluwer attaches great importance to creating an innovative culture where all 19,000 employees are involved. From that mindset, CEO Nancy McKinstry started five years ago, with an internal innovation competition. Every employee can submit new ideas which should align with the strategy of the company that provides information to physicians, accountants, tax consultants and lawyers. An external jury then determines who goes to the finals in New York. After a pitch contest between multiple teams, cash prizes are won.
“We have deliberately not monopolized innovation within specific departments,” said Frank Vrancken Peeters, responsible for Legal and Regulatory Solutions in Western Europe. “That’s not what we believe in. We think everyone can add value and we make use of the capacity of our people. People can also learn from their mistakes, says Peeters. In fact, it would be unfortunate if they stop after they make a mistake. But we must be careful that we execute well, he stressed. “The success of innovation is not only generating many ideas, but also the execution of it.”
In addition to internal competitions, Wolters Kluwer also has labs in some of the countries they operate in, where designers and programmers are freed up to experiment with new technology. A recent research for example, was into what Google Glass meant for their customers. This project was – due to the lack of success of the glass - was ‘put aside.’ Further innovation from the lab sessions set up where employees with ideas linked to someone in the lab. Together they will develop the idea and once it is presented to customers and approved, the company provides funding for the product to go the market. An example of this is a legal game called ‘Arrestengame.’ This is an app that allows lawyers to brush up their knowledge of jurisprudence.
Finally Wolters Kluwer has innovation managers for specific segments of their markets. The digitization enables them to make numerous improvements so that doctors, accountants, lawyers and tax specialists have quicker and easier access to the data they need to do their work efficiently.
This article originally appeared in Het Financieele Dagblad in Dutch.