This report outlines best practice in identifying and scaling new business opportunities, in terms of how to organise, the necessary culture, where to start, who to involve, and how to exit.
Customer-led innovation at Telia and Elisa
In order to secure competitive advantage and long-term growth, telcos need to identify and meet new customer needs. The importance of this is confirmed by the STL Partner’s Telco investment priorities survey published in January 2021. Understanding customer needs and innovation, both essential for addressing new needs and driving growth, featured in the top ten priorities.
Telco top investment priorities
Source: STL Partners, Telecoms priorities: Ready for the crunch?
This report seeks to identify best practice for telcos. Through in-depth interviews with senior managers in Elisa and Telia, and an expert in disruptive innovation, we identify the critical success factors and lessons learned in these organisations.
Telia created Division X in 2017, a separate business unit focused on commercialising and growing revenue from emerging businesses and technologies such as IoT (including 5G), data insights, and digital B2C services. Its focus is on customer needs and speed of execution, to spearhead and accelerate innovation, which it deems necessary in Telia’s drive to “reinvent better connected living”.
International Digital Services is Elisa’s third main business division, alongside Consumer and Corporate, which serve the domestic market. As International Digital Services has matured, it has focussed specifically on addressing new needs and developing new services, in both industrial and corporate domains.
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The report is based on interviews with:
- Liisa Puurunen, Vice President, Brand, CX and start-ups, International Digital Services, Elisa — Liisa has a background in leading new businesses and start-ups in Elisa in the Consumer division and International Digital Services. Liisa’s role is to understand where there are new needs to be met, and to get best practise in place across the whole customer journey, within both industrial and corporate domains.
- Annukka Matilainen, Development Director for Omnichannel and Smart Automation, Elisa —Annukka led the Consumer team’s response to COVID-19
- Stephanie Huf, Head of Marketing, Division X, Telia — Stephanie’s role is to support the business lines in Division X to in engaging with customers to identify their needs. For example, her team identifies what customers want, defines the value propositions and works with product and business teams to test these in line with customer insight. (Since participating in this research Stephanie Huf has moved to a new role.)
- Anette Bohman, Strategy Director, Division X, Telia — Anette supports and guides Division X in defining Telia’s future.
- John McDonald, FIRSTEP — John is a strategist in disruptive innovation in the health industry in Canada. He helps leaders create alignment around how the forces of disruption are unfolding and where to place the bets. FIRSTEP works with health organisations searching for fresh insights that spark new opportunities for growth.
Create a separate team to maximise new business opportunities
A separate team has many benefits
New business requires a separate, dedicated team. Its needs are different from day-to-day business and it needs its own focus.
One of the biggest learnings for Elisa in addressing new opportunities, is that there needs to be a ‘sandbox team’ with its own resources and budgets, rules, methods and mindset. It must have access to senior managers for decision making and funding, and strong leadership.
The sandbox team needs to be remote from the demands of day-to-day operations and implementation. If finding new needs is only part of someone’s job it is difficult to manage, as short-term demands will inevitably take precedence. Delivery and experimentation are different functions and they should be separate.
Liisa Puurunen’s team is a start-up in its own right. It is leaner than the usual Elisa approach and people are only brought into the team when there is a test to be done, keeping it flexible.
Rationale for a separate team
- Executive Summary
- Create a dedicated and separate team
- Take a customer centric approach at all stages of innovation
- Types of innovation will meet different new needs
- Create a separate team to maximise new business opportunities
- A separate team has many benefits
- Telia Smart Family: The case for a separate innovations team
- Evaluate success in relevant ways that may be non-traditional
- Take a customer centric approach to all stages of innovation
- Ensure a customer centric culture
- Start with a customer problem
- Meeting needs and scaling bets
- Co-create with customers, but choose them carefully
- Elisa’s empowered teams enable a successful response to COVID-19
- Types of innovation to meet different new needs
- New needs in the core versus new businesses
- Dedicate some resource to extreme innovation
- Telia Data Insights: New Business innovation in response to COVID-19
- The case for disruptive innovation
- Plan exit strategies
- Perseverance and pivoting can bring success
- Be prepared to kill your darlings
- Culture, leadership and purpose in telcos: Four key actions
- Elisa: Telco leadership excellence — and how to do it