Like leading the proverbial horse to water, you can give your team new tools but you cannot simply instruct them to use them creatively. Yet, inventiveness is a question of survival in an uncertain world. And uncertainty definitely defines our times, when a major crisis – think Covid-19 – can suddenly turn things upside down, or new technologies – think AI – fundamentally alter the way many jobs are done. In fact, there is no point in actually instructing individuals or teams to innovate, but an organisation can definitely create the right conditions to get creative juices flowing.
One way to do so is to spark the entrepreneurial spirit in the Finance function of a corporate giant. As did Nico von Delius, Global Finance Director Marketing and Sales at Siemens Electrical Products, and René Mauer, Professor for Entrepreneurship and Innovation at ESCP Business School in Berlin, working together with Effectuation Expert Michael Faschingbauer on a project at Siemens: a “market of makers” and an “innovation regatta”.
Instead of trying to find out what the future will be, we need to start acting, to make our own future.
Nico von Delius
Why entrepreneurial innovation skills are crucial to navigate uncertain times
In case anyone doubted the relevance of the VUCA perspective (the world is Volatile, Uncertain, Ambiguous and Complex), the Covid-19 crisis certainly drove the message home. “Siemens enabled more than 100,000 people to work from home nearly instantly,” recalls Nico von Delius. The company feared the IT system would collapse, what with the sudden massive use of remote working, but the transition actually went smoothly. While still working under pandemic conditions, some markets Siemens serves have been experiencing a boom. “For some products, we are overrun by demand, our suppliers can’t keep up because of shortages of labor, containers and material,” describes Nico von Delius. “It’s the perfect storm.”
As is the case for many businesses, the pandemic has even accelerated the company’s digital transformation, making it a necessity for the finance team to move from books and records to experiment with new technologies, to drive digitalisation in all sorts of internal processes. So, the finance director’s challenge was the following: how to get his team to innovate? Not just because their manager told them to do so but so that they can use these new resources to adapt to an uncertain world, and ultimately shape their own future.
“In such an uncertain context, I can’t give my teams a description of what their job will be like three years down the line,” comments Nico von Delius. “Instead of trying to find out what the future will be, we need to start acting, to make our own future.”
This is where entrepreneurship comes into the picture, with René Mauer’s insights.
Bringing entrepreneurial agility to the corporate world
The specificity of entrepreneurs is that they are able to act in uncertainty – in fact, it pretty much defines the entrepreneurial adventure. “It is also an individually driven action. Even if at some point a team is built, it always comes out of a single individual who acts on their idea, not because someone told them to do it,” explains René Mauer. “It’s the non-delegation idea of entrepreneurship that is captured in the effectuation model.”
The effectuation model describes a logic of entrepreneurial expertise, starting not with a specific goal in mind but from the persons’ individual means, from which goals gradually emerge.
“For a company striving for intrapreneurship – entrepreneurial activity of employees within a company – the process requires courage because it carries some chaotic elements,” adds Michael Faschingbauer, effectuation expert and author of a practice-oriented book on the topic.
Even if at some point a team is built, it always comes out of a single individual who acts on their idea, not because someone told them to do it.
René Mauer
In the past decade there has been growing interest from large companies wanting to explore what they can learn from entrepreneurs, with innovation labs and accelerators emerging everywhere. In the case of Siemens, Nico von Delius reached out to René Mauer and his team to run a 4-month programme. Its objective was to get a good number of the 400 members of the finance department to become innovation drivers. The programme began with an open invitation, recounts Nico von Delius. “Team members only needed to bring a basic interest in experimenting with new tools and technologies to innovate in the finance department and three hours of their time. No other restrictions or requirements.”
In preparing the first steps, Nico von Delius and René Mauer found some early partners among a group of younger finance professionals already enthusiastic about innovation and change, called “Finding Nemo”, the name being both an internal Siemens acronym and a fun reference to the Pixar cartoon. For Nico von Delius, one aspect was key to start the activity: what did he risk if it didn’t work? “This was an acceptable investment for us. How much did we risk to lose? Not more than a few hours of our time.”
From the “Market of Makers” to the “Speedboat Regatta”
So how exactly did the project take place? An invitation to join the initiative was issued, two information sessions were held, and 65 people eventually self-selected for the event.
On a Monday morning, the group joined online and was brought into a “Market of Makers”. At its core, participants were developing rough ideas growing out of their own interests and then going through a series of one-on-one 5-minute speed dates to find others who would want to commit to an initiative around their idea. Altogether 27 initiatives with sufficient traction were identified, dubbed “speedboats”.
We had a rough idea of where we wanted to go, but we knew we wanted to get moving! So, we created speedboats, not tankers.
Nico von Delius
What followed was a 4-month “Speedboat Regatta”. “The market was on the shore, we brought the speedboats into the water, and then they sailed off. They all explored their own course, saw where it would take them,” says René Mauer. Every now and again, the Finding Nemo team, who stepped in as innovation coaches, checked in with the speedboat captains. Eventually, an astounding 25 out of the 27 projects made it to the end of the programme and presented their journey at the end of October. One example of a speedboat project brought together IT and business people to help a colleague who was struggling with trying to manually extract sales data for reporting. Over the course of the “regatta”, they came up with a prototype to pull data automatically and create reports.
René Mauer believes a large part of the success lies in the informality of the process. “People were having a blast, sharing problems, then immediately being suggested part of a solution. Chance encounters play a strong role, allowing things to happen randomly. It’s very hard to trigger this in a formal process.”
Indeed, in a major corporate structure, the way things usually happen is “you describe the problem, come up with a potential solution, identify risks, then you make a business case going through many steps … basically you have to jump over many, often too many, hurdles to get something going,” in Nico von Delius’s words. “Skip this! We had a rough idea of where we wanted to go, but we knew we wanted to get moving! So, we created speedboats, not tankers.”
If you take one thing away from Siemens’ experience, it’s that corporate and entrepreneurial logics are not mutually exclusive.
“We know from research and practice that an organisation should be ‘ambidextrous’ with room for both exploitation of the existing business and exploration of new ideas,” says René Mauer. “However, theory tells us that the people doing the more predictable daily business should be separated from the ones doing creative exploration. But not necessarily! You look at the finance department and its prediction-oriented people at Siemens and you see that they were successful while having a very good time stepping out and exploring another approach.” Can the parallel processes be sustained at Siemens?
Nico von Delius believes so: “The feedback was great. The Nemos are already planning the next regattas, and we have plenty of people who want to be part of it. I think it has come to stay.”
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