Creativity is thinking up new things. Innovation is doing new things. —Theodore Levitt (1925–2006), renowned economist
The last few years in particular have shown how fragile the economic, social or financial environment can be and how quickly the conditions in which a business operates can change. So, adapting to it becomes critical, but how?
Business innovation isn’t just about creating new technology or radically changing the business model. It is, above all, to be able to question established practices and propose pragmatic approaches to rethink them. It’s an endeavour that keeps employees alert and responsive in the face of unprecedented situations. They get used to anticipating, evolving and making relevant changes.
Innovation thus becomes natural and contributes to the company’s resilience. To this, let’s add the digital axis that multiplies the effect of the transformation and accelerates the change.
The birth of [Un]accidental
Innovation is happening everywhere, every day, including in small Luxembourg. It might not be an obvious thing, but it’s an inherent, inescapable trait of human beings. And one can be so bold as to say that without innovation, we wouldn’t be where we are today.
We, PwC Luxembourg, wanted to show how Luxembourg players are innovating. Hence, in September 2022, we launched [un]accidental, a podcast series to shed light on innovation, hosted by Edouard Nollet, who’s a technology and innovation specialist himself.
To make it happen, we invited local leaders who have a strong link to innovation through technology, vision or strategy and who come from diverse companies in terms of sectors and sizes.
In this blog, we share with you the lessons we learnt during this first season from each local innovation leader, and give you a sneak peek of what innovation means for them, as well as their mission and experiences.
Seven lessons on innovation… and some more
The first season of [un]accidental focused on demystifying the subject of digital innovation, with local innovators testifying that innovation isn’t reserved for GAFAs (Google, Apple, Facebook and Amazon) or BATs (Baidu, Alibaba, Tencent). On the contrary, it concerns any company that wants to improve and federate its collaborators.
If you’re not sure whether innovation is right for your business, you can find out through our podcast how others are doing it and perhaps get inspired: from traditional banking like Spuerkeess to new generations of financial institutions like Bitstamps, to multinationals such as ourselves and Goodyear, to more local companies such as Bâloise, Foyer or Encevo. Each of the testimonials explains how the company’s journey has been linked to innovation and how everyone experiences it on a daily basis with their employees.
Important! Please note that we offered our guest speakers the choice of their preferred language for each podcast. Consequently, the series is a mix of episodes in French and English.
Lesson #1: “I always ask my colleagues: what is the problem we want to solve?”
Roger Krämer, Senior Vice President & Head of Department, Innovation and Project Management, Spuerkeess
In this episode, Roger also recalls the importance of innovating to remain competitive. Spuerkeess is a good example of this: despite its old age —160 years old!—, it’s still in great shape because it’s constantly reinventing itself.
He points out that the banking industry has undergone significant changes both in customer behaviour and in terms of competition in Luxembourg. Spuerkeess wants to follow the customers’ needs to defend its market share and grow. Roger is adamant: it’s not an option, you have to digitise.
A key lesson for Roger is to always keep in mind the problem you want to solve. When you are in a rush, you can easily forget it and therefore lose track of the goal and end up with a counterproductive solution. Instead, Roger advises, always stay on a solution that brings added value either to the customer or to the employee.
Moreover, since Spuerkeess has limited resources compared to large international banks, his department has opted to observe the practices of other organisations, and copy them when applicable. According to him, it’s an effective way of which nobody should be ashamed.
When it comes to challenges, Roger points out that innovation often comes with new ways of working that employees find difficult to accept. Innovation is ahead of them and sometimes behind, but in the end, it’s the customer who says who’s on time.
Roger provides valuable advice to counteract this, which is, in his view, innovation’s essential ingredient: a triple dose of change management. By that he means to always collaborate with employees when they undergo change. The staff must feel affected by it and be involved to grasp its value. But first, top management must help set it up and support it, and it must be the first to deliver the messages.
Lastly, Roger wishes that Luxembourg banks be ready to pool a certain amount of work between them. Although competitors, there are areas, especially in the back office, where collaboration could bring together brilliant people while reducing costs and improving quality.
Lesson #2: “Recognise that we can’t do everything ourselves. So you need to find the right partners.”
Xavier Fraipont, Vice President, Product Development Europe Middle East & Africa, Goodyear
In this episode, Xavier explains that all Goodyear’s services as well as the way they work are going through a transformation—not only their core product, tires. And that’s because everything is “going faster and faster”.
Digital is an intrinsic part of this transformation, especially for the creation of models and virtual developments, as well as the investment that comes with it and dimensions such as software and services.
Additionally, Goodyear works with external companies and brings in new talent, including data scientists, software developers and business analysts (because they want to develop through new business models too). The Luxembourg Institute of Science and Technology (LIST) and the Luxembourgish government are some of the partners Goodyear works with.
Through these partnerships, Goodyear invests in research, which might not deliver the product of tomorrow, but brings them another fundamental aspect—the knowledge that will enable them to create such a product one day.
For Xavier, innovation is all about the winning mindset. In other words, to always be the best and keep the competition behind. Another key aspect is solving clients’ problems—those that they aren’t even aware of yet. Or as Xavier puts it, “The famous ‘unmet needs’”.
Xavier also highlights the importance of learning faster. As part of Goodyear’s transformation, they decided to create a “quick learning” cycle, sort of based on the startup model. The goal is basically to “learn fast, fail fast”, keeping a clear objective in mind to make projects advance quickly—or die quickly.
To circle back to the beginning, even though it can be difficult to make decisions under this “sprint mode”, Xavier believes this is the right approach as it enables the company to keep up with the pace of the industry’s developments. Yes, sometimes they might end up making the wrong decision, but that’s alright.
Lesson #3: “We do not want to create innovations, but to create innovators.”
Marc Hotton, Innovation Coordination Officer, Foyer
In this episode, Marc reminds us that today, innovation is no longer an option if companies want to remain competitive, to develop new products or services, and to attract talent and customers.
According to him, while innovation has been present at Foyer, the launch of a dedicated department helped frame and industrialise the process. He highlights that innovation shouldn’t be a risky process though.
Instead, it’s something to master through methodologies that allow the generation of new ideas and that accompany them, so they have a maximum chance of becoming a new product or service.
Marc defines innovation as a novelty or an improvement that reaches the market, unlike an invention, which doesn’t necessarily aim for success. Its three essential steps are:
- Emergence of ideas;
- Support for idea holders and;
- Anchor innovation in the corporate culture.
In that context, Marc also describes the three key ingredients for innovation: corporate culture with a collaborative aspect linked to an ecosystem. As he puts it, corporate culture is “the little music that no one hears, but that everyone dances to”. And he goes as far as to say that at Foyer there are 830 innovators out of 830 employees.
Another important aspect for him is the positioning of innovation. He believes organisations need strong sponsorship. At Foyer, the innovation department reports directly to the CEO and there is a relationship of trust that has been established over time. Moreover, each idea is sponsored by a member of the executive committee (comex), who supports, finances and gets involved by putting their budget into it.
Foyer often does proof-of-concept (POC). They put forward a whole series of hypotheses, and experimentation, which is essential for them because it makes it possible to validate them—or not—it’s up to the project team to decide.
Lesson #4: “Innovation is the creation of value for our clients.”
Stéphane Rinkin, Tax Partner & Innovation Leader, PwC Luxembourg
It took a little bit of time, but innovation kicked off for us, at PwC Luxembourg, around three years ago when our CEO John Parkhouse and Stéphane reflected on the different strategies the firm should go for. They agreed then that innovation was one of the elements where they should invest more in.
The “why” of innovation for us is creating value for our clients, but also to have a positive impact on our people by uncovering the entrepreneur in them. At the centre of our innovation efforts are questions such as, ‘What will be the needs of our clients? How can we better serve them?’ and then we come up with solutions. Hence, we first find the problem(s) and then find the solutions through innovation.
To do so, our innovation team works closely with the business side, more precisely with all lines of service and industries, to create a network of people who directly or indirectly contribute to innovation.
According to Stéphane, the goal is for our firm to have the capacity to incubate new services and products, and to have the possibility to act as a catalyst of entrepreneurs, to receive their ideas and develop them in collaboration with our clients.
How do we do it? Anyone can propose an idea, from someone with a lot of experience to someone who just arrived, either by stopping by Stéphane’s office or through the ecosystem his team put in place internally (such as platforms and internal challenges).
Lastly, the innovation team does scouting to check if there’s a gap in the market and what solutions are already available externally that could potentially become our partners through Joint Business Relationships. As Stéphane put it, we integrate rather than develop.
Lesson #5: “It is an absolute must in each organisation that wants to innovate to be very clear on the definition of innovation.”
Peter Räke, Head of Innovation and Digitalisation, Encevo
Peter is indeed very clear on Encevo’s definition of innovation. He explains that, “For us innovation is the application of new solutions to meet an existing or upcoming external—so, the customer perspective—or internal—the corporate view—need.”
Peter mentioned that digitalisation, decarbonisation and distribution decentralisation changed the energy landscape as well as the customer behaviour. And this change is urging all players along the energy value chain to adapt and rethink the way they work and interact with customers.
In this context, Encevo is currently on its path towards sustainability and, to do so, they are embracing tech, deploying innovative solutions and partnering up with local communities. This is part of their innovation strategy as well as their 2030 innovation roadmap, defined in 2020.
Peter explains the 2030 roadmap was developed with the support of internal and external specialists, bringing together their views and expectations while keeping in mind the anticipated new technological developments. For Encevo, he adds, it’s very important to implement the roadmap step by step.
When it comes to how innovation happens at Encevo, he says that they are organised decentrally, and for him it’s key to link innovation strategy with group strategy. Hence, they follow the open innovation framework, with a specific department reporting directly to the group CEO, which is responsible for innovation management, strategy management and acquisition participation in startups.
In addition, Peter explains that Encevo has now built teams within the business units that are only focused on innovation or on delivering innovation and digitalisation projects. For him, “this is a big step forward that means that gradually the idea of innovation and the understanding that there needs to be a certain team doing this is furthering in the organisation”.
Lastly, he explains that Encevo works very closely with startups to see what kind of solutions and approaches they offer. By doing joint pilots, for example, they learn, build new skills and test the new solutions with their customers.
Lesson #6: “A lot of people sum up innovation to the creation of ideas when it requires a lot of rigour”
Cédric Rochet, Chief Innovation Officer, Bâloise
In this episode, Cédric starts by explaining that for him,“The goal [of an innovation department] is to spread innovation skills throughout the company.”
However, also according to him, innovation is also another way of managing initiatives by bringing managerial innovation. That’s why Bâloise implemented holacracy principles, which means the comex has decentralised a part of its responsibilities to groups and communities of middle managers, who take the responsibilities of a programme driving a strategic focus —a practice used by some startups.
Cédric also explains that the objective of innovation is to make a repeatable process that provides evidence that an idea is worth becoming a concept that can then be tested with users before turning into a business implementation. This whole process requires a lot of effort and rigour.
Moreover, he reminds us that it isn’t always easy to initiate innovation. In Bâloise’s case, doubt and scepticism were very present when they launched their innovation lab. In fact, companies are programmed to run their business and all employees are focused on that, so when innovators come up with transversal initiatives that take people out of their comfort zone or usual mindset, it can create friction in the organisation.
Finally, Cédric tells us that, for him, there is no magic recipe for innovation, which is in constant evolution. He explains that if he had taken his current methodology and applied it in 2015, it wouldn’t have worked because the organisation didn’t have the maturity at the time to work as they do today. This evolution journey has to support top management in the change, but also onboard employees, middle management and the innovation team.
Lesson #7: “You have to be both agile and know when to stop.”
Jean-Baptiste Graftieaux, CEO, Bitstamp
In this episode, Jean-Baptiste explains that Bitstamp has built its model by breaking the chinese wall between departments while empowering employees to work on client feedback. Nonetheless, he says, not all innovations are good to fly.
In that context, he believes that a key point in innovation is being able to stop. While there are plenty of ideas and feedback to integrate, if the market expectations aren’t met, you have to know how to make the right decision, which could mean saying no or ending projects your teams have worked on for several months.
The company has 200 people working in their product and IT development department. Jean-Baptiste highlights that, “We infuse a culture of empowerment where we really insist that our employees take power, be proactive, and work together to improve certain products or bring improvements to existing products for retail and institutional customers”.
Moreover, Bitstamp offers something unique in the cryptocurrency space: customer support with humans. They have 200 people who assist their customers and provide them with a high quality service. The feedback they get from these interactions is a source of information that they relay to their product and technology services teams and that allows them to continuously improve their products and the user experience.
When it comes to product development, Jean-Baptiste also believes it’s crucial to launch a MVP (Minimum Viable Product) version on the market. He says he has “seen developers who cut diamonds rather than launch a product that will not necessarily be perfect. A little alpha or beta is a way to receive user feedback in order to adjust over time”.
As Jean-Baptiste put it, you need “to make sure that a product has a minimum of customers in front of it, to test the experience, to make sure that it is not a product that will be stillborn.”
Over the episodes, we discovered that innovation practices can be very different in terms of capacity, but that they also all have points in common:
- The innovation function acts as a catalyst and not a substitute, and it must find the right balance between autonomy and governance;
- Innovation isn’t the action of one person, but rather the action of a collective supported by a corporate culture;
- The creative part of innovation, although essential, isn’t sufficient. Any idea requires substantive work;
- All the innovation managers we met are unanimous: an idea is only valid if it’s implemented and meets the needs of a minimum of customers with a view to improving iteratively.
We hope that by now you are convinced that innovation is right for your business—for any business, for that matter. Now you may be wondering, “How will I be able to develop and implement it?”
Our Experience Center team can help you accelerate your innovation process. By favouring a human-centred approach to innovation, they facilitate the alignment of stakeholders on the real issues and create the commitment necessary to achieve the defined level of ambition. Visit their web page to find out more about them.
What we think
Our [un]accidental podcasts series aims to make a wide audience become aware that innovation is not accidental, that it is a process that is important to structure. We also want to convey the message that innovation is an integral part of our environment and it impacts our society.
While meeting these innovators, we noticed that despite each of them having their own style, own process, own definition of success, they all share a strong commitment to exploring new fields of opportunities. They all accept that exploring means failing most of the time, but it is also bringing them closer to success.