HMS is a Swedish company and a global market leader in the industrial communications industry. The company has more than 500 employees and a growth-rate of about 20% annually.
Initially, the company’s growth was based on an entrepreneurial culture based on a high degree of interconnectedness across the organisation. Subsequently the company refocused on growth and operational excellence, gradually replacing the core vision with an emphasis on more detailed plans. As the company expanded, these detailed plans began to take over as its primary instrument of guidance at the expense of the broader, shared vision.
In short, HMS went through three phases: a “Market Establishment” phase (with a vision as their primary guideline), to a “Market Development” phase (with strategies as their primary guideline), and finally to a “Market Maturity” phase (with detailed plans their primary guideline).
|Market Establishment||Market Development||Market Maturity|
|During this phase companies have a strong “in-side-out” focus i.e. they are driven by their own vision and belief of what they want to accomplish, both from an offering point of view but also from a position point of view. They listen to the market and convert input into their own words and visions.||During this phase companies have tested their ideas and got a confirmation that they are on the right track. Now it’s time to listen to the market and improve/fine-tune the offer to fit customer’s needs. Good balance of “in-side-out” and “out-side-in” focus is the key to success.||During this phase the market has reached a mature state with a growing business and customer base – it’s time to harvest. The exotic initial offer might be seen more as a standard or even as a commodity. Focus is on keeping the offer fresh and attractive with a strong value, creating an “out-side-in” focus.|
|Don’t develop what the customer wants, develop what they don’t know they need.||Put your ear to the ground and listen with passion to what the market has to say. Put new glasses on the customer.||Grow the product flower. Apply the sales cannon (aim, load, and fire).|
The three phases of HMS, from vision to strategies and to detailed plans. Source: HMS
Employees developed different mindsets throughout these phases, and market maturity meant that most were focused on functional tasks and narrowly defined targets. The result was that HMS lost much of its ability to innovate and to adapt to alternative or disruptive market forces.
Going back is challenging. Faced with the need for innovation, employees asked, “how should we innovate?”, because they wanted detailed plans to guide them. However HMS came to realise that innovation requires the creation of a new and challenging vision rather than plans or KPIs. In short, it needs inspirational communication and passionate innovation champions who can push forward without any detailed plans.
Its five driving concepts for reigniting an innovation culture were:
Inspiration “We want our leaders to provide us with a clear vision. We like when our leaders are hungry to win business and have a winning mindset. We like when we challenge ourselves. We want to be encouraged to innovate and to be recognised for our efforts.”
Excitement “We have it a bit too good overall, and we want a little more urgency. We also want to lessen our heavy backpack and to try new things that are groundbreaking.”
Direction “We need more support systems. We need a working innovation process with horizontal process owners that help across departments. We need a holistic view and focus. We need to invest time and resources into innovation. We need to set aside time for idea generation.”
Coherence “We want to improve internal communication and collaboration between departments, as well as spreading and sharing more information with each other.”
Enlightenment “We want to learn more about innovation. We want to learn more about customers and customer needs. We want to learn more about how our products are used. We want to learn more about how other companies work with innovation and innovation processes.”