Can innovation models make a real impact in large organizations? Certainly, by involving the right people and making sense (and use) of the right technology.
In a world where innumerable companies are started every day, it’s important to remember that just because you’ve been around for 400 years, you’re not guaranteed to survive the next 40. The last part of the previous sentence was stated by Alexander Haneng, Senior VP of Digital Innovation at Posten Norge & Bring.
For several centuries, the main source of revenue for Posten Norge has come from letters. Given the company’s heritage, one can safely say they went through a very turbulent period when revenue was needed to be sourced elsewhere, as the customers now favored Instant Messages.
Posten went from mainly delivering letters to delivering parcels, a humbling experience that demanded them to become more innovative, but not just as a company; they also had to become an innovative learning organization.
“We went from having 30 000 employees that worked with delivering mail in the year 2000, and that figure is reduced by 90 % as of today. Our approach today is that anything that can be moved, can be moved by Posten, and logistics represents about 75 % of our revenue today. However, despite a recent spike in demand, logistics is still a very low margin business. We have to stay on our toes if we want to survive the next 40 years”, states Alexander.
Time to check out how Posten went from waterfalls to hackathons
We invited great minds from various industries to talk about how to draw the route to insight and innovation. And when it comes to innovation, we knew we had to talk to Alexander Haneng! Below, you'll find what he had to say about how Posten continuously draws their route to insight and innovation.
You need to be stable to scale
Innovation and staying on your toes require stability and agility. A success factor for Posten has been their stable, scalable digital platform, enabled by cloud. With stable and scalable IT in place, is there a way for Posten to predict and proactively cater for new logistics needs that don’t even exist yet? Four years ago, with a new CEO in place, Posten decided it was time to steer away from the traditional waterfall model of innovation and turn to something that would not only work in theory; it needed to work in practice as well.
“I was hired four years ago to head up the Digital Innovation Department. The traditional waterfall-model can be useful; a lot of large organizations innovate with the help of a waterfall-model and a lot of these companies are successful. But: it’s a very expensive model when it doesn’t work, and it just wasn’t right for us."
"We needed to become better at learning, become more agile and produce better results – quickly. Our inspiration came from different schools of thought, like design thinking, various sprint models, user stories, service design, etc. We picked the parts that best suited our needs as an organization and created the Helix model, with a concrete toolbox that we can use, and it’s now run company wide,” says Alexander.
"We need to become humbler and continuously ask the customers what they want and develop a real empathy for their needs.". Photo credentials: Tore Hole Oksnes / Posten Norge AS
“Our Innovation Department has two main functions within Posten. The first one is to act as a catalyst for innovation within the whole company, giving support to the business and administration. Our second role is smaller, but in my opinion, the most important is to focus on what I call radical innovation. Radical innovation can be about creating new services and products that might not be viable this year or the next but could very well be the thing that keeps us going in 40 years. It can also be about solving an imminent problem or fulfilling a customer need quickly. One example of the latter is our digital marketplace, AMOI."
"During the pandemic, we saw the vendors on the local highstreets struggle, and we saw customers genuinely missing their local shops. It was unlikely that each vendor would successfully run their own online retail. And even if they could, it would have meant that more delivery vans had to drive more with fewer deliveries on route, which isn’t very good for the environment. Nor would the customer feel that they could gather the best from the highstreets in one shopping spree, as they could before the pandemic."
"With AMOI, customers can pick and choose from a wide variety of goods from many of their local shops and it’s delivered as one parcel. This initiative truly stems from a desire to solve a problem and being empathic with the customers. And as it turns out, people are actually starting to visit the stores more often themselves, enriching the ecosystems of our society even further”.
Balancing the need for speed with patience
Working with innovation as a strategy is something many organizations say they do, but when push comes to shove, it becomes apparent they have yet some way to go. For those operating in a complex market, in a big organization, you need two things: the potential of speed, and patience.
“Even if you have the most brilliant idea ever, and can’t wait to get started, you have to realize that you can’t always instantly change people’s perceptions. There are three measures you need to get in place to create real customer value”, says Alexander.
- Top management buy-in; make sure the CEO and board of directors are onboard and support the innovation initiatives
- Build a learning organization. Old truths are hard to unlearn, and too many times we guestimate what the customer wants and needs. We need to become humbler and continuously ask the customers what they want and develop real empathy for their needs.
- You need to move away from the “Proof of Concept-Hell” and start scaling the innovations that work.
Celebration builds an innovative culture
In addition, for those looking to build an innovative company with a curious, empathic and learning organization, you need to remember to be proud and celebrate the successes you’ve had and share your insights with everyone.
"Right now, we’re celebrating that we’ve built Norway’s largest fully automated warehouse for e-commerce. We decided to go after this idea due to the fact that the major competitive edge we have compared to overseas vendors is speed; we’re local and we can deliver faster with a fully automated warehouse and logistics that we control, where we can load the trucks as late as possible", adds Alexander.
Watch the recorded livestream: Time to draw the route to insight and innovation