2012/11/15 09:30 Elke von Ouden, “Creating Ecosystems for Meaningful Innovation”, Arctic Workshop

Doctoral consortium in industrial engineering and management at Aalto University (Arctic Workshop), Nov. 15-16, 2012, Espoo, Finland

This digest was created in real-time during the meeting, based on the speaker’s presentation(s) and comments from the audience. The content should not be viewed as an official transcript of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. The digest has been made available for purposes of scholarship, posted on the by David Ing.

Introduction by Eero Eloranta


[Elke den Ouden]

Looking for new ways of creating value

  • Beyond the industrial age

Contents:

  • What’s changed in the world
  • The age of transformation
  • Designing ecosystems
  • Understanding value
  • Meaningful innovation
  • Consequences for innovation and sources, linked to that

The world is changing

  • In crisis, take your pick:  economics, health, food

Lots of technology, not a bottleneck

  • What do we do with it?

Example:  Philips Healthcare

  • With products, could increase performance
  • However, after cardiac arrest, you need help in 5 minutes, but the ambulance takes 9 minutes

Healthcare, by 2050, if we do nothing, half of us will be working in healthcare

Also looking into materials in production

  • Emissions from products in use are 70 times those in the production process

Need system transformations, e.g. smart grids, e-mobility, waste management

People are changing

  • Entrepreneurs doing something for the world, as well as themselves
  • Social enterprise

Have been paradigm shifts

  • Agricultural economy:  tough period when machines came in
  • Industrial economy: investments in technology, transportation, went through bad period as people had to move through cities, global competition
  • Experience economy: focus on local value, e.g. can buy coffee from China, but have to drink it locally, providing intangible value by being directly involved; now going through a difficult time to continue to appeal to customers again and again
  • Knowledge economy: combine knowledge and information to provide value in new ways, now a problem where companies struggle to stay attractive to highly trained people; move by people to be more independent

Age of transformation [Philips Design: Rethinking value in a changing landscape 2011]

  • Mindset from product ownership to experience to self-actualization, now to meaningful living
  • Impacts on businesses
  • How can we have inclusive value networks?
  • Ethical value exchange?

Life used to be easier, selling a product to a customer

Now, need a collaborative network:  large corporations, small corporations, entrepreneurs, government, citizens

  • Need all of them to get going

Not just about designing the product or service, also need the ecosystem

  • Nobody has all of the knowledge, no one can get transformation going on its own

Example: dementia, as aging population grows rapidly

  • Aim to keep the people at home longer, but 98% of caregivers suffer from physical and emotional fatigue
  • Initial value proposition to redesign lighting solutions for institutional care in home situations
  • Reducing unrest and daytime sleepiness by light therapy
  • Reducing cognitive performance loss by 5%
  • Did an understanding of stakeholder analysis (Alblas and Den Ouden (2011) Creating Value for Multiple Stakeholders with Intelligent (Lighting) Solutions, Proceedings 2011, Cambridge, DOI:10.1007/978-1-4471-2268-5_5
  • Direct customers or user: nursing home, serviced apartment, housing cooperation, ambulant care
  • Indirect beneficiaries, e.g. reducing health care costs: health insurance, home care
  • Potential payers: e.g. patient, family, AWBZ
  • Disadvantaged parties: pharmacy, drug store
  • Tested against innovation
  • Scenarios where could create value:  between stakeholders, flows of (i) goods and services, (ii) money, (iii) information, (iv) intangible value

Last phase to plan for implementation, selecting roles

  • e.g. Philips traditionally a product manufacturer, but system is more complicated, so may want to become a front-end service provider

Transformational innovations

  • Want to create value for users
  • Also create value for organizations involved in developing and delivering them
  • Create sustainable value for society at large
  • But what do we mean by value?

Levels can be looked at from perspectives of …

  • User
  • Organization
  • Ecosystem
  • Society
  • (all of above are nested)

Value for the user, want to offer them a pleasurable experience, seducing them into changing their behaviour

  • e.g. Wii is valuable for kids when it’s new, but then there’s a longer timeframe

Value for the organization

Value for the ecosystem, as something that is lasting, can adapt to changes and dynamics over a longer period of time

Value for society: creating value over a period of time

Combined perspectives into a value framework

Philosophical view:  is value objective or subjective, are things valuable because we cherish them, or do we cherish them because they’re valuable

Economic value of coffee, where harvest bean is $.01 per cup

  • Roasted, grinded, packed, $.05 to $.25
  • Heightened ambiance, $5
  • Up to $15?

Psychological views

  • Positive psychology (Seligman): a pleasant life, a good life, a meaningful life
  • Motivational values (Sagiv and Schwartz, Value Priorities and Subjective Wellbeing 2000) Openness to change, self-enhancement, conservation, self-transcendence

For users, create happiness

  • For organizations, core values
  • For ecosystems, shared drivers
  • For society, well being

Sociological view, relations between people, and between people and things

  • Medals as symbolic value, value of honour
  • Crown jewels of UK, absolute, transcendental value, not for sale, yet there’s a huge fear of loss
  • Rubber bands for Ibiza 2000, sentimental value, e.g. celebrities wearing white iPod earphones leading to prestige

Sociological view leads for users to belonging

  • For organizations, social responsibility
  • For ecosystems, reciprocity (because it’s relational)
  • For society, a meaningful life

Ecological view:  lots of discussions on value, quite wide, a lot about the planet and looking beyond

  • Value of biodiversity
  • Ecosystem notion comes from nature
  • Human development, including human skills, art of living well with a smaller footprint
  • Value of nature itself for human health and wellbeing
  • Spirituality

Ecological value perspectives (in a narrow view, to not overlap with other perspectives)

  • Eco footprint
  • Eco effectiveness
  • Sustainability
  • Livability of the environment

Then want to create a value proposition across all levels:  experience, doing well, doing good, transformation

Applied to ambient experience

  • When in a medical scanner, how to keep children more relaxed?
  • Cartoons above

Meaningful innovations not only with a economic/functional view, but also value/holistic view that doesn’t fit in a spreadsheet

  • Intuitively know

What do value networks or ecosystems mean for companies?

  • No longer company-driven, have to look to solution driven networks
  • Accept that companies have limited knowlege, and only subjective views
  • Need to understand each other, and other’s needs
  • No complete description, boundaries aren’t clear
  • The network is not owned by the company

In a network, identity is defined by others, and not by self

Natural ecosystems have independency and reciprocity

More information in book:  Innovation Design, 2012

[Questions]

Value has to be discovered.

  • Used patient journey to look at stakeholders

Relationship view?

  • In the future, will believe that networks will change more rapidly than value chains
  • Will be able to create roadmaps for upcoming products, need to start from societal needs and then networks will be more fluid
  • More project-based than strategic alliance based
  • Could be regional

How to recognize changes?

  • Start with customer, follow the processes from their perspective
  • Make map of how things happen

Value?

  • Studies were more B2B than B2C