Digitalisation and disruption seems to be on everyone’s mind these days. Walki sought inspiration to tackle its digitalisation challenges from serial entrepreneur Jonas Kjellberg.
Every entrepreneur is thinking feverishly on how to disrupt their industry, and big companies that have been around for several hundred years are also hopping on the digitalisation train.
According to Jonas Kjellberg there are two ways to make use of the advantages that come with digitalisation. You can either improve existing systems by making them digital, or you can introduce a completely new way of doing things with the help of digitalisation.
Kjellberg has experience from doing things in a whole new way. As one of the co-founders of Skype he is used to turning established markets upside down by introducing new business models. These days he consults companies on how to reap the benefits of digitalisation. During the last years, the world has seen a lot of successful companies that have managed to disrupt markets. It has become the buzzword. However, says Kjellberg, disruption is not just about technical development and automation. You need paying customers too.
"Disruption only takes place when you have created a new market for new customers in a new way."
The starting point should always be the clients.
"You have to ask yourself what your customers want and need instead of thinking what you want to offer. In every step of the value change you have to start from the customers' needs."
Looking beyond the value chain is also important.
"What kind of needs do our customers' customers have and what are the preferences of the buyer's buyer?
One big challenge for companies today is speed.
"The only thing that is certain is that the technical development is just gaining more speed all the time. The big challenge is that what is maybe a fantastic solution today can become obsolete tomorrow. "
This means that the total cost of development keeps growing, and this is a problem in many organisations. How much effort and financial resources should be devoted to a certain project or manufacturing process when you know that it may be all in vain in a couple of months? So in this world of ours where new innovations and business models can overturn even large corporations in matter of months, how should bigger companies act in this megatrend of digitalisation? A start-up can change its strategy on a whim, but turning a large ship is a completely different matter.
According to Kjellberg, one solution for big companies it to let a small part of your company play around with different digitalisation strategies, while you make sure that other operations lay on solid ground.
"Think of a big tanker vessel navigating in unknown waters. You cannot do any fast turns because then you might run into trouble. But in front your tanker you can have several smaller speedboats racing at an incredible speed. If one or two crashes, it will have no impact on your big vessel."
Despite the challenges, innovation has never been easier to implement thanks to digitalisation.
"There's code available thanks to open source, and inexpensive hardware for implementing Internet of Things", he says.
What is more difficult to change is the attitude and way of working. Bigger companies usually do their research and development activities behind locked doors, and no one is given a sneak preview before the product is ready to be launched. Kjellberg encourages a new approach.
"There are lots of great start-up companies, collaborate with them instead of trying to invent the wheel all over again by yourself. In today's world success starts with sharing."
Digitalisation is today present in all areas of the supply chain. Making sure that Walki's supply chain makes the best use of digitalisation lies on Jani Peltoniemi's shoulders.
Digitalisation will have a revolutionary role when it comes to re-planning of information flows. The target is to streamline the information process starting from demand recognition all the way to the payment of the goods. By planning information flows together with our customers we can achieve faster, more reliable and lower total costs of supply.
It will be constantly changing. Five-year development plans cannot be done due to the speed at with digitalisation is developing. But for sure Walki's supply chain will be more agile, adaptive and better supported by information management tools compared to today. Our ideology is to take multiple small steps instead of putting all of our efforts into single large projects.
One need to bear in mind that digitalisation itself does not solve any problems. It is very easy to succumb to “installing a new software" and hope that it does the trick automatically. You still have to be in the driver's seat and do the actual problem solving. One challenge is the difficulty to choose the right partners. Getting everyone committed when there is no clear picture of the end result or pay back is another challenge. It's all very complex. A good dose of courage and collaboration is needed to make it work.
Jonas Kjellberg holds an MBA from Uppsala University and an engineering degree from the Royal Institute of Technology in Stockholm. Before co-founding Skype he worked for Swedish investment company Kinnevik and UK-based Wyatt among others. He's also been the chairman of iCloud, later sold to Apple. He has published a book together with professors from Harvard and Standford, 'Gear up'. He's a popular speaker and holds lectures at Stanford University.
Disrupt according the Oxford dictionnary
1. Interrupt (an event, activity, or process) by causing a disturbance or problem
2. Drastically alter or destroy the structure of something
The word originates from Latin's disrumpere which means broken apart.