How to Lead Innovation - 3 Tips from the Posti Next Playbook
To drive change and new innovations, all organizations need three things: the right mindset, an improved skill set, and structures that support the desired change.
Posti is currently facing one of the biggest business transformations Finland has ever seen. In order to prepare for the future, the company is working hard to attract new talent, innovate new business, and adopt new ways of working. The Posti Next initiative was born to drive this transformation.
A massive project for accelerating change and new innovations can be a challenge for any company – and especially for its leaders. To support its transformation, Posti created X Labs that strives to match new business ideas with intrapreneurial people. X Labs gets to use the world-class experience and skills of advisors such as Mahesh Kumar, entrepreneur and CEO of Result.
“We started Result to help founders and corporate leaders succeed. The last half a decade, I have been working as an advisor and partner to management teams in large companies – helping corporate leaders and innovators test and scale innovations faster, and creating programs to unleash intrapreneurs, find partners, run pilots and scale them,” Kumar says.
He points out that in order to drive innovations and change, companies need three things: the right mindset, an improved skill set, and structures that encourage and support the desired change. All three require a lot from the leaders – especially the last one.
1. Build Structures and Practices that Encourage Change
According to Kumar, Posti seems to be rather advanced in terms of how the company looks at innovation – but there’s always going to be challenges when it comes to prioritization, resources, hierarchies and existing structures. He’d love to make sure that good new opportunities and initiatives don’t get stuck in any organizational black holes.
Posti’s business strategist Eeva Tiainen agrees with Kumar. Her main focus is on driving open innovation within Posti’s Parcel and eCommerce (PeC) Business Group. She is responsible for X Labs, PeC’s arm for breakthrough innovation.
“For the change to happen, our leadership team must be able to lead with two different approaches, simultaneously. The first one is focused on executing our strategy and on securing the growth of our current businesses. The other one aims at exploring new growth directions and experimenting with new business models. This approach demands our decision-makers to put on the hat of a venture capitalist: challenge the teams and ask good questions, and allow the team to be the one making the decisions,” Tiainen says.
“The term we use for this double role is leading an ambidextrous organization. It demands our leadership to switch their mindset when leading the more intrapreneurial teams.”
Kumar stresses that it takes a very different approach to lead teams towards new ideas and future changes, as opposed to the existing and the familiar.
”I might now oversimplify a bit, but when leading the existing and the familiar, the mindset is often based on numbers and evidence: I must see it to believe it. When leading new ideas and innovations, however, the mindset should be more about faith: I must believe it to see it. This is especially true in the startup world but essential also in bigger companies that want to transform their business,” Kumar emphasizes.
2. Get Everyone Involved
Kumar has noticed that in many companies, people around the watercooler are eager to talk about how slowly things change and “why aren’t we doing this and that”.
“My call to these people is: why aren’t you doing more for the change. It’s actually everyone’s responsibility to make the organization stronger and better and more future-proof – even if it doesn’t specifically say so in your job description.”
Tiainen points out that instead of entitling innovation work and driving new projects to a selected few, there are multiple perks of engaging more employees in this work. It can for example help employees be more open to opportunities without being restricted by challenges. Intrapreneurial mindset and skills benefit the whole company.
“A culture that embraces innovation is one where employees have the time, space and permission to come up with new ideas, test them, make decisions on them (or mistakes, for that matter!) and challenge the existing status quo. Talented leaders embrace and encourage these developments because that’s what leading the cultural change is all about.”
Posti’s ongoing X-celerator 2020 programme is a good example of encouraging change and innovations. It searches and cultivates growth ideas as well as people who are curious to level up their skills in innovation. Business ideas are driven from bottom-up, as a voluntary effort, and include a wide crowd in the innovation work. Basically everyone at Posti has been offered the opportunity to participate.
3. Foster Agility – but Stay Patient
“In my opinion, allowing for programmes such as the X-celerator 2020 to take place, is already a sign that Posti sees potential in building fresh business models and spin-offs based on the existing knowledge, data and skills. Now it’s up to our employees to grasp this opportunity and unleash their potential,” Tiainen says.
But what about the goals for these innovations and business models? Aren’t there executives in Posti who demand quick financial results?
“None of us can predict the future. In order to future-proof our business, we must place small bets in several different initiatives and learn through experimentation what will eventually be the winning business models – and what will not. Our leaders understand very well that this is as much about organizational learning as it is about creating new sources of revenue in the long run. When you are changing the culture of a big organization, things don’t happen overnight.”
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