Perspectives on innovation-driving leadership from the project Innovation in the Forest Industry

Tuesday 28 June 2016

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The forest industry is crucial to Sweden’s economy. It also has the potential to generate jobs and contribute to the transition to a sustainable society. But the industry is facing some big challenges in the wake of globalisation and digitalisation. “Given the considerable capital tied to the sector and the fact that trees grow for 70 years, the transition will be slower,” says Gunilla Saltin, CEO of Södra Cell.

But the forest industry is not the first one that needs to find new ways of keeping up with development in society. For inspiration on how companies can incorporate innovation-driving leadership, the IVA project Innovation in the Forest Industry invited Olof Persson, Chairman of the Steering Committee for the project, Sara Mazur, Head of Ericsson Research, Jan-Olof Jacke, CEO of AstraZeneca and Gunilla Saltin, CEO of Södra Cell, to share their experience and knowledge about the topic.

“Innovation is not the same as invention. Innovation is introducing something new,” explained Olof Persson, and all the participants agreed. “It’s not enough to have a lot of suggestions in the suggestion box – we also need to do something with them. Innovation doesn’t have to be related to technology either; it could just as well be a way of making a company competitive or a new working method,” added Olof Persson.

Sara Mazur said that innovation cannot be regarded as a separate activity taking place in a development department but must be incorporated throughout a company. It is important to take advantage of all the knowledge within a company. Sara Mazur added that different types of innovation must be handled in different ways. Since it is almost always more profitable to improve existing products for existing customers from a short-term perspective, the longer-term projects need to be managed separately. One method used by Ericsson is Ericsson Garage. Employees can be released from their normal work assignments to spend three to nine months developing a first prototype of an idea in the Garage.

“Innovation is risky.” Jan-Olof Jacke was clear about the fact that most of their research projects will come to nothing, but that innovation requires the courage to try and fail. An innovation-friendly climate welcomes failure as well – it is essential to be bold enough to try.

“If our research isn’t successful, we have no future,” said Jan-Olof Jacke.

He also pointed to a change in how we look at knowledge, and he thinks that more knowledge is shared today. He thinks the days are gone when we would all hide our ideas behind patents. One initiative from AstraZeneca aimed at strengthening the eco system is the company’s BioVentureHub located in the heart of the Mölndal plant. External research companies operate here, which increases the exchange of ideas and expands networks. AstraZeneca’s investment in research is visible and this affects the company’s image and also impacts who applies to work there. In a globalised world it is important to attract the best in the world, and everyone wants to work for companies that keep up with the times. Jan-Olof Jacke also said that diversity in the workforce promotes innovation.

Gunilla Saltin agreed with Jan-Olof Jacke about the importance of diversity. She also said that the forest industry finds it harder to recruit people from outside Sweden due to the industry’s niche and the geographical location of the plants.

An innovation-friendly climate is a culture that permeates an entire company, but the transformation phase required to achieve this needs to be initiated from the top. Jacke, Mazur and Persson agree on this. Management needs to be clear about the importance of innovation and ensure that is it prioritised. This usually makes the employees receptive to change.

As Sara Mazur puts hit: “We don’t need to make employees innovative – they’re already innovative. What we need to do is create the conditions in which the employees can be innovative.”

Author: Sara Almström