Facing Globalization: Reconceiving Innovation in Denmark

NextD Journal RERETHINKING DESIGN 20

Facing Globalization: Reconceiving Innovation in Denmark

Anders Drejer, Ph.D. Professor of Strategic Management Aarhus School of Business / Strategy-Lab

GK VanPatter Co-Founder, NextDesign Leadership Institute Co-Founder, Humantific Making Sense of Cross-Disciplinary Innovation

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NextD Journal I ReReThinking Design Facing Globalization Conversation 20

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1 GK VanPatter: Welcome, Anders. We see lots going on in Denmark around design and innovation these days. There seems to be renewed interest and energy there. Can you tell us why that might be? Anders Drejer: It is simple really. It seems that Denmark is feeling the effects of globalization these days. A lot of old-fashioned industrial jobs are being outsourced to the far and near east. This has caused the public and politicians to realize that a transformation is underway. Denmark is being transformed from an industrial society to a knowledge society. Of course, this has been going on since the 1980s, but now it is being said out loud! The massive transformation of jobs sparks the question: What should Denmark do for a living in order to sustain its position as one of the richest nations in the world? And the answer – one of them at least – is innovation, business creation and design. This has become a theme in the media and in a recent general election.

2 GK VanPatter: On the homepage of the Danish Ministry of Culture's website I see there is a 66-page PDF document entitled "The Danish Growth Strategy / Denmark in the Culture and Experience Economy - 5 New Steps." Does this document represent the new strategy of Denmark's government regarding growth? Is there widespread agreement within Denmark on that strategy? http://www.kum.dk/sw8166.asp Anders Drejer: Well, yes and no. The government is, I think, in a process of figuring out what to do. The document that you are referring to is, the way I see it, a step towards a more coherent and unified policy. The latest initiative is that the Danish Prime Minister appointed a think tank – a so-called Globalization Council – after the recent general election. This has a lot to do with the fact that there is strong disagreement on past governmental initiatives from some very influential people, including top managers. They have pointed out that focusing on high tech, nano technology and so on is not sufficient to sustain Denmark’s position as a wealthy nation in the future. There needs to be a focus on innovation in experience markets and new areas as a supplement to more old-fashioned means.

3 GK VanPatter: What does “a focus on innovation in experience markets” actually mean in the context of Denmark? Anders Drejer: It means moving away from traditional industrial mass-markets for consumer goods and instead focusing on servicing the emerging markets for experience and self-realization within such as games, entertainment, edutainment, movies, and so on.


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4 GK VanPatter: For the benefit of our international readers I have captured some text from the Ministries site that serves to explain the challenges facing Denmark from the their perspective as follows: (Excuse our imperfect translation to English.) “Denmark in the Global Economy” (excerpts) Danish society and individual citizens should be better equipped to handle the challenges facing us in an ever more globalized world. Commodities, technology, investments and jobs are moving across national borders at an increased pace. A new division of labor between countries increases growth in the global economy, but also involves risks. Countries which are not armed for international competition will fall behind in the development of wealth. And within individual countries, different companies and workers will not be equally armed to meet the new challenges and take advantage of the possibilities. Denmark must place itself among the best in the global economy. The goal is for us to increase our wealth while continuing to be a society without large social and financial differences. This puts demands on both Danish society and the individual Dane. Our wealth is increasingly dependant on our ability to compete with new knowledge and new ideas both to enhance production and add new high added-value jobs. This requires better education and research. A dynamic society needs new knowledge and new ideas in order for good business processes and conditions to commercially create new jobs. And in the employee sector, there is a need for adaptation and new ways of organizing work. Ultimately, we must create good jobs for everyone so that we don’t end up with a two-part Danish society: An elite which manages everything and a “left-over” group which is constantly exposed to the risk of unemployment and social problems. Therefore we need a general lift in education and competencies so that we don’t end up with a two-speed job market. These challenges demand the will for renewal. We must reorder priorities, and adapt and change the outdated structures and systems. As a starting point, the Globalization Council shall be concerned with analysis, proposals and recommendations from experts in Denmark and abroad. It will debate and give advice to the Ministerial Committee about:

• How Denmark and Danes are best equipped to take advantage of the new possibilities and do well in the global economy

• How knowing and understanding the challenges facing Denmark due to the

global economy can be communicated to Danish society in order to gain active participation from individuals and all sectors of society


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• How the goals for Denmark as a leading growth, knowledge and entrepreneurial society can be realized with broad support from Danish society

Committee & Council (excerpts) The government has appointed a Ministerial Committee that will be focused on examining Denmark’s role in the global economy. In a year, the committee should issue a vision and a strategy for how to develop Denmark into a leading growth, knowledge and entrepreneurial society. The government will simultaneously set up a broadly based Globalization Council which will advise the Ministerial Committee on a unified strategy for how to develop Denmark into a leading growth, knowledge and entrepreneurial society. The Council will include representatives from unions and corporate organizations, as well as people from the world of education and research. The Minister of State is Chairman of the Globalization Council and the Minister of Finance and Business is Deputy Chairman. Does this text above accurately reflect the Government’s perspective on the globalization challenges facing Denmark? Does this text reflect your perspective of the challenges? Anders Drejer: This text reflects the government’s perspective on the challenges facing Denmark. It does not reflect my perspective, though. It fails to acknowledge the fact that Denmark is and will remain a niche player in the global economy and as such ought to focus its resources and attention. What the government wants is too broad and unfocused.

5 GK VanPatter: I am trying to understand how the government arrived at its conclusions regarding focusing on innovation, business creation and design. Did the government undertake some sort of research study to arrive at its understanding of what the challenges are facing Denmark? Does any kind of visual map of those challenges exist anywhere? Anders Drejer: The government will claim to have done that by asking a bunch of experts – who all happened to be managers in industrial companies, males, having engineering backgrounds and above 50 years old. To stereotype them. But that is the kind of “research” that has been done. No independent and fresh research has been done as of yet, so what the Danish government did was, in essence, jump on the bandwagon of nanotechnology, biotech and so on, not acknowledging the fact that players such as the U.S. and Japan have a 1,000 times more resources devoted to those technologies. Already today, more than half of what is published internationally on nano-technology is written by the Chinese.


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6 GK VanPatter: Was the state of the design industries in Denmark part of what the government looked at? Was any kind of design industry infrastructure study done as part of the wider effort to repurpose Denmark in the so-called knowledge/innovation economy? Anders Drejer: In short – no! The initial slogan from the government was “new billion dollar industries” emphasizing the word “industry” as in “industrial”. That means a focus on basic technology research with the aim – and hope! – that this would yield new industrial businesses. But the experts and the government did not even acknowledge the fact that even if such a technology push strategy were to work, it is well known that it takes a lot of time and effort and has a high risk of failure. Nor did they do a comparison of the efforts by other nations as to the possible effort of a tiny nation such as Denmark. It is all very nice to spend 3% of GNP on research (which Denmark is far from anyway), but try and look at real numbers. All things being equal, the U.S. can afford to spend fifty times as much on research as Denmark can. Since the initial political “efforts”, a lot of people have questioned the technology push strategy in which design industries have no place. They have called for an alternate approach involving user-driven innovation. The rhetoric seems to work since jargon from the design world (e.g., experience economy) has started to creep into the world of politicians, including vague promises to supplement the doomed technology push strategy.

7 GK VanPatter: Let’s switch tracks here for a moment - I would like to move from the larger context of Denmark in a global economy to more specifically talk about your Strategy-Lab at Aarhus School of Business. Who created your Strategy-Lab and for what purpose? Anders Drejer: Strategy-Lab was formed by a few good men and myself. Strategy-Lab is dedicated to strategy and business development, and is an attempt to revitalize the world of universities to the reality of Denmark today. In order to do that, we do two things radically different than traditional initiatives. We do not distinguish between basic research, applied research, teaching and dissemination. Plus, we try to tackle these disciplines all at the same time. The norm would be to establish a research center and forget about the other things, but in the future there won’t be time for that. Instead, for example, we approach our MBA program (which I am heading as well) as an arena for action learning rather than as simply education. And it works! We teach and learn at the same time. So we have a strong preference for action research, which fits well with the topic of strategy, as well as many other settings. Second, we work with companies and industries that are the future of business in Denmark and who place strong emphasis on innovation and innovative solutions such as the design industries, television, movies, etc. In order to practice what we preach, we have established a network based on a website comprising about 5,000 pages of text and discussions. This website is financed by members. I hope to make it a source of income for the future, not for the money (which will be used for research anyway), but because it shows that we, too, can practice


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network economy. The site is in Danish for now, but can be viewed at www.strategy-lab.asb.dk.

8 GK VanPatter: When you say it was formed by “a few good men”, does that mean there are no women at your Strategy-Lab? Anders Drejer: That was just a figure of speech. Strategy-Lab is a network and in our network there is a clear majority of women! We launched a new initiative last week (June 17, 2005) in which we appointed a number of ambassadors to Strategy-Lab, i.e. business managers who aim to create innovation in Denmark. About half of those appointed were women and that percentage will not dwindle as we appoint more. In fact, in a group we just started which is devoted to creating a new, innovative kind of MBA program, as of now, I am the only male.

9 GK VanPatter: OK. It is a little confusing to keep all of the players straight. What is the relationship between Aarhus School of Business and Strategy-Lab? Anders Drejer: Strategy-Lab is like a department of Aarhus School of Business. However, we define our strategy and market much more broadly than the educational programs and activities here in Aarhus. We see our mission as national.

10 GK VanPatter: Is it from the platform of Strategy-Lab that you are advising the Danish government on innovation-related matters, or do you also operate a consultancy, a practice? Anders Drejer: No . . . and yes! No, in the sense that I do not have a private company besides Strategy-Lab. In my opinion, I think too many academics do that. Sometimes being a consultant and an academic makes it difficult to keep your priorities straight. But yes, in the sense that we in Strategy-Lab feel obligated to advise on strategic issues in whatever way we can. Politics is a dirty job, but someone’s got to do it. . .

11 GK VanPatter: Would it be fair to say that part of your mission at Strategy-Lab is to produce business leaders capable of operating and leading in the future that Denmark seeks to create for itself in the realms of “innovation, business creation and design”? Anders Drejer: That would be absolutely correct. And also, to show that the world of research can play an important and constructive role in creating these leaders. A third objective is to wake up the political world of Denmark. Alas, I partake in the public debate along with several of the people involved in Strategy-Lab.


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12 GK VanPatter: From your perspective, how does research play a role in creating your new innovation leaders at Strategy-Lab? Anders Drejer: As action research. I do not think that we train people. Rather, I see our educational offers as arenas for action research, where the participants (students) learn, we learn and together we create knowledge that is interesting for the general body of knowledge in the field.

13 GK VanPatter: Apart from the language semantics, how specifically does research mastery connect to innovation leadership mastery in your model? Anders Drejer: Excellent research has a role to play in innovation leadership such as, for instance, conceptualizing leadership mastery and making managers reflect on what they do well and not so well. This role is not played by managers themselves or consultants for that matter. It seems that only independent research can play such a role. Of course, in order for the role to be played well, the researcher needs to be in close interaction with managers and respect their role in innovation leadership mastery – and vice versa. I guess that is what action research is all about: recognizing each other’s contribution to innovation leadership mastery and collaborating in improving this mastery in a joint learning process. And might I add, I have never met a manager who mastered innovation leadership that did not recognize the role of research. I have however, met many managers lacking mastery who also did not recognize the role of others. . .

14 GK VanPatter: Denmark has a long distinguished history in traditional forms of design. I am curious to know what role design plays in innovation at your Strategy-Lab? Anders Drejer: Design is many different things. For us, design is mainly a way of thinking – or a work process. Thus, we believe that managers should design strategies and business concepts rather than plan them.

15 GK VanPatter: I am sure our readers would be interested to know if this means that you think of yourselves as educating designers at Strategy-Lab? Will your graduates think of themselves as “designers” when they complete this program? Anders Drejer: In a sense, yes, we are helping create designers of innovative strategies and innovative business concepts. I am pretty sure that the graduates will think of themselves as designers rather than planners. Especially after we publish a book on the subject in the fall of 2005.


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16 GK VanPatter: Do you have any faculty members at Strategy-Lab who were educated in traditional design schools? Anders Drejer: Yes, as well as psychologists, engineers, journalists and so on. Also, we collaborate with several institutions in Denmark that specialize in design as a discipline.

17 GK VanPatter: What is it about the design process as a way of thinking that is of interest to you and your students? Anders Drejer: By using the design process as a metaphor, it is possible to create processes of strategy formulation that incorporate the principle of emergence, learning and creative thinking as a supplement to analytical planning processes. Too often managers and students lack the tools to let go of the analytical, convergent way of thinking and try something else. Design helps us do that.

18 GK VanPatter: Are you referencing design as a tool, or do you have other tools that you engage to facilitate cross-disciplinary innovation? How does design help you do that? Anders Drejer: Design to us is more of a process – a learning process really – that can be supported by a great number of tools such as mindmaps via brainstorming sessions and other creativity tools.

19 GK VanPatter: I am interested in your reference to design as a “supplement to analytical planning processes.” Is this how you see design, as a counterbalance to analytical thinking? Anders Drejer: Basically, yes. We think of the design process as a divergent process that produces many possible solutions, and analysis as a convergent process aimed at reducing the number of solutions. This is obviously a simplification in itself, but it works for communication purposes. In the real world, lines are a bit more blurred. This also means that in actual designing of, say, a product or a piece of art, there needs to be a great deal of analysis to get it right. This also goes for strategy formulation. There needs to be a careful balance between design and analysis since the former is often forgotten.

20 GK VanPatter: Well, it is interesting to see so many business schools discovering design. Everyone seems to have a book in the works so there appears to be no shortage of confidence in these new models and notions about how various pieces fit together. It will be interesting to see how it all works out and what the impact will be on the design community.


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I am guessing that you seek to capture the richness of design innovation and not lose its essence in its transfer to your program. You must know that there are many forms and types of design processes. Most, if not all, will contain the two dimensions that you describe: divergent thinking and convergent thinking. I am seeing that there is a bit of a misconception among some of the business schools that design is about brainstorming and divergent thinking, but not about the more sober work of analysis and convergence. You might note that some designers would be offended by such depictions. Design contains a lot of analysis. You see, it would be a mistake for business school educators to assume that just because you have been teaching your students only convergence (decision-making) all these years, don’t assume that designers only learn the flip side of that coin. :-) In addition, one should not assume that learning divergent thinking makes one a master of design. These are not interchangeable concepts. It is not going to be that easy. There is much more to design today then raw generative thinking. On the other hand, you can learn a lot about divergent thinking from experts who never went to design school. That is part of what makes the subject of innovation leadership so complex today. Many designers have had to step out of design to learn new skills more adaptable to the cross-disciplinary marketplace. Bolted onto design, these are now powerful hybrid innovation toolkits. Whether we are talking about design school, business school or technology school graduates, the real challenges today are around changing deeply engrained anti-innovation behaviors of adults. Many educators are unaware that working in cross-disciplinary ways requires different skills then those that have been historically taught. It is not about a lack of divergent thinking. A lack of thinking orchestration is a huge issue when you are talking about cross-disciplinary innovation. You are absolutely correct in suggesting that managers and students often lack the tools to help them really improve cross-disciplinary innovation dynamics. We find that many educators lack the same tools and knowledge. When that is the case, they tend to repeat how they were taught. Often those ways can no longer compete in the marketplace. While it is relatively easy to teach the analytic tribes some divergent thinking skills, it is considerably more difficult to reconstruct the habitual behavior of leading with judgment and criticism. The greatest strategies on the planet will not go far in organizations that cannot change anti-innovation behavior. Today there are designers in the community who cannot only create strategies, but who can also help organizations change behaviors and construct innovation cultures in creative, engaging ways. The fall of 2005 is just around the corner. Will your new book paint a new picture on the relationships between strategy, innovation and design? Anders Drejer: First, let me briefly comment on what you just said. One of the greatest dangers of our profession is that of pendulum swings its focus. In other words, the focus on research changes based on what is fashionable rather than what is relevant. I have observed that fashionable research often means a reaction to what was fashionable ten years ago. Thus, research becomes sort of an anti-research really. Of course, that is inherited in the critical approach of research, but nonetheless, watch out for the pendulum. Right now we are clearly seeing this in the case of business schools. Some abandon what they do really well (e.g., convergent thinking) in favor of something completely different


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(e.g., divergent thinking). I would hate to see that happen. Here in Aarhus, we teach convergent thinking in business administration at what I believe is a world-class level, especially if you consider the relatively few resources we have at our disposal. So divergent thinking – as in business creation or strategic innovation – should be a supplement to business administration and not a replacement! I quite agree to your points in that respect. Now for the question: Will my new book paint a new picture of the relationships between strategy, innovation and design? That is a tall order! I think it requires a redefinition of strategy, for starters. And then an incorporation of the results from the innovation discipline into the new way of perceiving strategy. Furthermore, design needs to be clarified and incorporated into the rest of the equation, so to speak. And yes, I will try. But only because my current book has achieved the first part of it – the redefinition of strategy. And that took 500 pages. So it is a long journey to a new picture of the relationships between strategy, innovation and design!

21 GK VanPatter: What do you mean by “design needs to be clarified”? Anders Drejer: Ah! I mean that the concept of design needs to be defined and discussed. Also, the discipline of design needs to be outlined according to the definition and understanding of design in the definition. All of this is to make sure that we avoid misunderstandings about design like the ones we talked about in questions 19 and 20.

22 GK VanPatter: I see. I guess you mean in Denmark. You likely know that this is not a new definition of strategy, at least not here in the United States. Veterans of the corporate innovation strategy business like our friends over at Strategos (among many others) have been talking about the need to cannibalize for many years. We have worked with the Strategos team. They have some interesting strategy frameworks and certainly on the content side they know their stuff. We find that strategy frameworks are most often very different than organizational innovation enabling tools. By this I mean that the problem with most of these strategy models is that below the 50,000-foot view call to action there is not much in the way of actual tools. Understanding this, we make a distinction between Mind-Shift, Skill-Shift and Culture-Shift. Some organizational leaders mistakenly believe that calling in an innovation strategy guest speaker, a Mind-Shift experience will result in Culture-Shift. Of course it will not. So the question today, at least here in the United States, is not how to redefine strategy. That is already a widely understood done deal. The question for most organizations is how to actionize innovation strategy in terms of real tools, real behaviors and real skills. How does one connect the various pieces together? Beyond Mind-Shift, how does one get to Skill-Shift and to Culture-Shift? I guess you would not be surprised to learn that this happens to be our business at Humantific / StrategyLab, UnderstandingLab, InnovationLab. Your description of what


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organizations need to do is a mirror image of the continuous innovation model that we have been using in practice for numerous years. All of our work hangs off this model, which involves valuing, mastering and continuously executing what we call pattern optimization and pattern creation. This extended model syncs strategy with process, teams, information, and the work environment. You will be able to see it in our upcoming book Visualizing Innovation, but in the interest of time I will show it to you in overview form here. :-)

Perhaps our team can get together with your team sometime to compare models. In the fall, we will be in Switzerland at the University of Science in Basel as the Director of the Experimental Hyperwerk program has asked us to come and do cross-disciplinary innovation skills workshops for their entire student body. Perhaps we can drop by Copenhagen and connect with you on our way home. We recently had a terrific Ph.D. student from Learning Lab in Denmark spend a week in our office. She also attended the summer NextD WorkshopONE session just held here in New York. She is now back in Copenhagen and would be a good person for you to meet as well. Let’s talk more offline. This has been a very interesting conversation for me and I thank you for taking the time, Anders. I think there is lots of food for thought for our readers here. One final question: Where do you see your graduates in three to five years time? What kinds of positions do you expect them to pursue when they enter the marketplace?


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Anders Drejer: You are quite right. The situation with regards to strategy in Denmark is different from the one in the U.S. The real challenge here is not to change concepts, but to create organizational action. In Denmark, recent surveys show that while many managers agree that innovation is of crucial importance to their organizations, their practices do not reflect that. So there is a huge gap that we need to help fill somehow. I like your model a lot, but I am still more interested in how it is applied and made to work in order to change the mindset of people. You will be most welcome in Denmark. We can compare notes. ;-) As for my graduates, I hope that they are creating organizational action in different settings. That is to say, I think that they can help fill the innovation gap by taking on the role of change managers rather than change agents. The latter is a term of the industrial way of thinking. Instead, a change manager is one that is a constant factor of management teams of the future, but only as a role. The person in question changes with the changes made in the organizational mindset. Thus, I think that my graduates will be roaming the business landscape as highly paid change masters going from one transformation to the next, not unlike successful sports managers or the like.

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Facing Globalization: Reconceiving Innovation in Denmark