Think outside the box ….
... and you’ll get a new perspective. This can be necessary if you are going to be in line with the times and develop your company in the right direction.
At ProXecutive, we’re in daily contact with fantastic Swedish companies who understand how to use innovation as a lever for their development. That’s why we know that with new approaches, you can replace bureaucracy, confusion and stagnation with job satisfaction, security and innovation. In order to develop, you need openness towards the world and the insight that reality is always changing.
Read about how you can use Value Innovation to develop your business and how the companies Deltaco and Mekonomen renewed part of their strategy!
From garage start-up to listed company
– Think of the tiger. When there is food, he lies still, but when it’s all gone, it’s time to move and strike –at just the right moment, says CEO and founder, Siamak Alian.
IT and distribution are dynamic branches where flexibility and timing are crucial for both development and survival. This is something Siamak Alian knows. He is a physicist from Iran who came to Ludvika as a political refugee, went to the Swedish for Immigrants course, and started his own company in 1991. Today he is CEO for a listed company with a wide range of IT products, its own brands and has large and well-known clients such as Dustin, Altea and Teknikmagasinet.
Deltaco’s idea is to always deliver what customers want, even if they have to change the product rework routines and customize delivery terms. It is the idea of flexibility and timing and what ensures the company never stands still.
– We know that it’s not enough to deliver products. We deliver service and if the customer is happy and earns money, then he’s also ready to pay a little more.
The adaption makes great demands on employees who never know how the day is going to look when they arrive in the morning. But they stay anyway. Many have worked in the company for more than 10 years. The work environment can be chaotic. It’s about quicker decision-making and short meetings.
– Work tasks can change from hour to hour. It requires a special type of person who is always ready to adapt to help the customer earn money. The positive thing is that it is never boring. There is also a great acceptance that things can go wrong. It’s about focusing on what’s important, says Siamak Alian.
Compared with other distribution companies, Deltaco has high margins, 8-10 percent compared to the industry average of 2-3 percent net margin. Already from the start, Deltaco showed positive numbers and has continued to do so throughout the years.
– We’ve had 235 months in a row with profit. That is by far the best in the distribution industry. With us, it’s always the numbers that steer us. We never go into a business where we don’t earn money, says Siamak Alian.
From Spare Parts to a simpler CarLife
– It’s about being open and questioning established truths, says Marcus Larsson, vice VD of Mekonomen.
It was the two entrepreneurs Ingemar Fraim and Leif Möller who started Mekonomen under the name Bileko in 1973. Already from the start, the company was a contender with an entrepreneurial feel. Soon they expanded to become an integrated retail and wholesale chain with control over the entire flow from manufacturer to end-customer. In 2006, Axel Johnson AB became the new principal owner of Mekonomen and in 2007, Håkan Lundstedt was appointed CEO and a new strategy was developed, which became a new start for the company.
– The industry was very traditional back then. There were a lot of needs not being met. We started with a gigantic mapping of the market by interviewing customers, competitors, employees and more, says Marcus Larsson.
The workshop in Gärdet that’s open around the clock, and the launch of Mekonomen Direkt, were two of the many more results of the research. Investing in brand development, concept development, communication and unconventional TV ads were others.
– It was completely new in the industry and many have tried to copy us since then, says Marcus Larsson.
To continue developing, Mekonomen works a lot in project form. Cross-functional teams are put together to create thought processes and find new needs to fill. The latest was a project specifically aimed at women: M by Mekonomen. Mekonomen put together a team of only women from areas including finance, category and marketing. It resulted in a new concept: a store in a shopping centre with workshops aimed at women, which was successfully tested and is now expanding to more locations.
– Working in projects strengthens the culture and glues together the organization, says Marcus Larsson.
The recession has not had a great effect on Mekonomen. They adapt their costs and put the gas on both promotions and advertising. Many customers prefer Mekonomen’s affordable profile to the traditional car brands’ expensive workshops. The next challenge for Mekonomen is to grow in 20 countries in 10 years.
– There aren’t any directly comparable concepts and we’re confident that our concept works in other markets than the just the Nordics! At the same time, we try to be humble and look around to learn something new. There are always possibilities to find good ideas and take initiative to increase the value of our offerings, says Marcus Larsson.
Let value innovation be a cornerstone in your strategy!
Companies that succeed often have a special ability: the ability to find what’s unique – something that was previously unknown, but then proves to be perfectly natural. Magic? No, you can do it too. Think visionary and be a survivor, even in periods of crisis.
Structure and order is important, but without challenging the safe and ingrained, we get nowhere. In order to develop, we need to stretch our limits and meet the new and unknown with open and curious eyes. It could be simply crucial for your company’s survival and future. If you have an innovator in your organization, consider yourself lucky.
– An innovator turns concepts upside down and sees impossible combinations melt together and build something entirely new. It is extremely important to identify and support those who have the ability to renew, so that the company can survive in the long term, says Anders Åberg, member of ProXecutive’s advisory board.
Many people find change difficult. Change means moving away from well established procedures that work seemingly well. For change to come about, we have to be curious and responsive to our environment. There are often intersections between very different cultures, subject areas and disciplines that new ideas can grow from. It can seem difficult or troublesome, but these are the ideas that prevent a company from getting stuck in old patterns and ways of thinking.
– Innovation creates a jump in value both for your customers and for your company since new and unused marketing space opens up. There are good methods for creating value innovation and also for measuring and following up the innovation process, says Lars Jonsson, senior advisor for ProXecutive.
How to build value innovation:
Think outside the box – Move your limits
Look at alternative industries, other strategic groupings, other customer groups, complementing products and services, functional versus emotional appeal for your customers, time perspectives and trends
Visualize your strategy instead of diving into numbers
Focus on the big picture instead of the details
Reach beyond the current demand
Study those who are not your customers and build new assumptions about the customers’ common values.
Work in the right strategic order
From customer benefits, strategic pricing to cost objectives and commercial success.
Overcome internal obstacles
Work to get your employees to see the need of strategic shifts; create accessibility to resources, increasing motivation and preventing internal politics.
Build in implementation
Create a culture of trust and engagement that motivates people to implement the company’s decided strategy.
Sources: ProX experiences and Blue Ocean Strategy by W Chan Kim and Renée Mauborgne