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How to Maximise your Return on Innovation with Data

Ilkka Auer

Co-founder, CEO

February 20, 2023

Participants: Lasse Korsholm Poulsen (Engagement Manager / Implement Consulting Group) and Jukka Lindström (VP, Strategy & Business Transformation / Cargotec)


Hi, I'm Lasse from Implement and with me today I have Jukka Lindström. He's the VP of Strategy and Business Transformation at Cargotec. Cargotec is a company that makes global trade faster, smarter, and more sustainable. They have more than 12,000 people worldwide, and they are headquartered in Helsinki, Finland. Today we'll talk about how Cargotec actually transformed their way of renewing their own business: quantifying the unquantifiable.


Thanks, Lasse. I joined Cargotec in 2016 to lead the digital transformation, which was part of our new strategy. And our ambitions were, of course, very high around this one. I quickly noticed that we had a lot of enthusiasm, ideas and different kind of explorations on new business models and so on ongoing. Of course, our competence and doing that type of work were quite not yet there.

We started using lean startup and all of these methodologies to kind of help explore these opportunities and validate them. But we identified quite quickly that wasn't enough. So we were able to get some leeway on the team level. But what we started struggling is that we had a lot of investments into this area. So how can we really quantify and see that we are making an impact on that area? And we noticed that in addition to the lean startup and so on, we needed a new innovation system that would be able to quantify and measure our success in this area. Because the basic metrics like revenue and return on investment, they were, of course, a few years ahead on the road, and we couldn't use those to measure our success.


Okay, so that's a very good realisation to have. But how did you then go about building and implementing this new innovation system?


Yeah, we, of course, look into different ways of quantifying this. We looked in the venture capital world and how startups and so on are quantified there. We found NASA's technology readiness level (TRL), which is used to assess where technology is in its maturity. We found Steve Blank's Investment Readiness Level, but all of these were very generic, so they really didn't help us to really quantify the progress - they were more like frameworks to think about rather than measuring the progress.

After looking for a while, we found a holistic framework for startup ventures to identify where they are in their road from zero to hero as a start up and where would be a good place to find investment or money for them; is it the friends and family or is it Series A or so on? But it had a nice idea around it, like, how can the venture start up founders kind of quantify and evaluate where they are really on that road? We created a version for us in the corporate setting to help our teams to really evaluate where they are on the road and quantify it, measure it in a sense of the evidence that they had gained throughout the road. Because all of new ventures, it's about evidence, like how much evidence they have behind that, it's really a viable business.

When we started using that, I think in a few months, half a year or a year, we really had our first lights on moment. So the moment when we really were able to see like, hey, now we can kind of see that these cases are doing well. They are going ahead. These cases have been stuck. They've been working a lot, but the evidence hadn't been accumulated. There was no progress, even though, of course, the teams were saying that, hey, we're doing a lot of work.


Great. So could you elaborate a little bit more on this? What are the main benefits that you have experienced from using the system so far?


Yeah. So when you you're able to measure the progress of the case in a comparable fashion so that the teams and the cases are comparable, there's a few benefits. One, of course, is if you have a framework which teams measure and self assess, it helps the team to identify where they are weakest in terms of evidence and what they should focus on. At least we had a problem in the beginning that many of the teams were very engineering oriented. So they were gathering a lot of evidence that they have a solution that works. But they didn't have evidence whether there was a market and how quick it was and whether it would solve customers operations or whether it could be included in the customer's operation, what's the onboarding way and things like that. So it has helped our teams to focus on what matters.

Second, on the steering level, it transformed the way how our steering and the teams that are innovating work together. So earlier it was that the steering was trying to shoot holes into the team's plans and ask them tough questions. But now when we have the framework around, that helps to identify the evidence that they need to focus on, it transformed the steering and the team together ask the question, what do we need to do in order to get the evidence or this proof that this is not worth investing. So they're working on the same boat.

And the third element was, of course, having quantified measurements, we are able to track the overall progress on the portfolio level. How is our investment in this area in general? What's the momentum of our whole portfolio? How much speed, how much progress have been able to make with the investments that we are doing and have that kind of discussions with executives and also identify bottlenecks in the innovation system in general, what have been the main areas of lack of speed or challenges to the teams.

Implement Consulting Group is a consultancy agency with 1000 employees and ten offices in six countries – Denmark, Sweden, Norway, Germany, Switzerland and USA – and work with clients all over the world. Implement Consulting Group's areas of expertise are "Strategy & Transformation", "Growth & Innovation", "Leadership & Change", "Digitalisation & IT" and "Operations & Efficiency".

Learn more: https://implementconsultinggroup.com

Cargotec is a leading provider of cargo and load handling solutions with the goal of becoming the global leader in sustainable cargo flow. Cargotec's business areas Kalmar, Hiab and MacGregor offer products and services that ensure our customers a continuous, reliable and sustainable performance.

Learn more: https://www.cargotec.com

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