ExecInsights Podcast

QUT ExecInsights – QUT Chair in Digital Economy on Rethinking your Business for the Digital Age


Professor Marek Kowalkiewicz, QUT Chair in Digital Economy and Michael Rosemann, QUT Professor for Innovation Systems speak with Kate about using the processes of structured ideation to create the preferred digital future for your organisation.

Professor Marek Kowalkiewicz, alongside Peter Townson and Professor Melinda Edwards, will facilitate a 2-day short course on “Disruptive Innovation Leadership”. Find out more here.

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Transcript

00:00:08 Kate Joyner

Welcome to QUT ExecInsights, conversations about business and the changing world brought to you by QUTeX professional and executive education for the real world. I’m your host, Kate Joyner. Today is a first for our series. I’m in conversation with not one but two amazing QUT colleagues.

00:00:25 Kate Joyner

I welcome back to the podcast Professor Marek Kowalkiewicz, Chair in Digital Economy, and with him is Michael Rosemann, Professor for Innovation Systems in the School of Management, QUT. What my colleagues have in common is a strong interest in working with organisations to create their preferred future in the digital economy. We’ll be exploring ways to cultivate future thinking with the leadership of your organisations. So welcome Marek and Michael.

00:00:51 Kate Joyner

Welcome back Marek. So you’re our first repeat podcast guest, so I guess that’s an honour.

00:00:58 Marek Kowalkiewicz

I’m so honoured to hear that. Thank you for having me again.

00:01:01 Kate Joyner

You were quite an early guest. I think I was still practicing then.

00:01:06 Kate Joyner

So, you’re both involved in the Chair in Digital Economy. In fact, Michael, you had a role in setting up the Chair in Digital Economy. So, what were we trying to achieve by setting up this particular enterprise?

00:01:17 Michael Rosemann

So, QUT is of course dedicated to being a University for the real world. Working with the real world is essential and the Chair in Digital Economy is no exception. What we try to do are two things. For the outside we try to reduce what we call innovation latency. We try to work with external partners and give them faster, more cost, effective access to what’s possible and to accelerate the innovation. But also, on the inside QUT benefits. By reducing our research latency, it’s only by working with external partners that we see research problems and that creates a first mover advantage on the inside. So, we try to conduct research early on, so you can see that the Chair in Digital Economy alliance strategically well with what QUT tries to achieve, and it’s a true win-win for the outside and for the inside.

00:02:02 Speaker 3

Right?

00:02:03 Kate Joyner

So, has that been the case for you Marek? Has it been a great ride for you?

00:02:07 Marek Kowalkiewicz

Absolutely, absolutely it’s been… It’s been a fantastic ride so far and then hopefully for much longer. We’ve been, for the past four years or so we’ve been working with industry and government forming what I call a pyramid of collaboration. Here, a triangle of collaboration so academia, industry and government get together to not just understand what digital economy is and what it means for them, but also jointly work on solutions, jointly work on approaches that focus on the opportunities that the digital economy brings. For the past few years, we have tested a number of approaches to academically rigorous research that at the same time is very relevant for the industry. It’s not an easy thing to do to make sure that that it’s both rigorous and relevant, but I think we’re doing quite well in this space.

00:03:11 Kate Joyner

I think we are too. So, you’re working with organisations and obviously their leaders to think about their organisations in the digital space. But leaders have the role to engage their organisations in the challenges of the digital space. So how should leaders be thinking a little bit differently about their organisations and bringing people along as we think about the challenges of digital?

00:03:35 Michael Rosemann

So, the current environment is opportunity rich. Digital technologies allow us to enter new pathways and that must mean that leaders can spot very quickly and early on what’s possible. Second, that also means instead of having a narrative that is driven by a sense of urgency, that’s problem centred. We need leaders who can envisage what’s possible. Who can create stories, who can excite, who facilitate cultural change that is driven by collective excitement about the destination, about a new sense of ambition and in our work we realised it’s new territory for many leaders. The ability to spot what’s possible and to craft a narrative that is engaging and exciting. So, independent of which technology we study, that’s the sort of leader we try to produce. The leader that envisages the future and takes his team with him or with her on that journey.

00:04:28 Kate Joyner

Well done, yeah, we think so too. It’s always fun when we get whole groups, I think, in the centre to explore some of these problems.

00:04:35 Kate Joyner

So we actually, while the future can sometimes seem a little bit like an abstract concept, sometimes it’s good to have structured way to think about exploiting some of the opportunities, so I know that you both developed the Disruptive Innovation Leadership Course in fact, do you want to tell us a little bit more generally about the opportunity there.

00:04:55 Marek Kowalkiewicz

Absolutely. And maybe just drawing a bit of background story behind it. When I was joining QUT a few years ago, there was one of the important factors for me to consider. Someone who’s coming from the industry to join a university that has a very specific approach to innovation, to digital transformation. QUT has had a long history of success in a space that is called Business Process Management and so the school of thought that QUT around innovation informed or inspired, and that’s my understanding of the past, informed or inspired by this has led to this development of an approach to innovation that in some ways is mimicking the process management approach. So, you know, how could you innovate by following step by step processes. And I found it very attractive and to be very frank, that was probably one of the biggest attractors to QUT for me and so that’s the background. So really, you know what my colleague Michael together with his other academic colleagues worked on in the past form that baseline for the course that we developed later on, the Disruptive Innovation Leadership Course, in which we share so called ideation lenses with the participants of the course.

Those lenses are really a bit like PowerPoint templates for innovation. You know sometimes when you create a presentation you don’t want to be concerned about, you know, the choice of colours or the choice of fonts. You just want something to start with and then you want to work with it to refine it. This is really what was the approach that we popularise is about. We would like to say that you know you don’t have to be creative to be innovative. And what we mean by that it’s, you know I’m not sure if it’s really true, there is always a bit of creativity in the process, but we’re basically trying to say that you don’t have to be this archetypical creative type. You know, an artist.

00:07:12 Kate Joyner

OK, so I understand that that the Disruptive Innovation Leadership Course is a little bit different, perhaps from other professional development and leadership programs that people might have engaged with. Do you want to just tell us an idea about how we approach this very challenging leadership subject?

00:07:27 Michael Rosemann

I think it’s two days of intensive co-thinking, so that means the audience is continuously involved. We expose them to a new way of thinking. That means looking at the world, seeing what’s possible, and then immediately, apply these sort of new thinking patterns to general examples. Could be the Empire State building, could be a cinema, but then also the context of their very own organisation and it’s just very active participation where you really rewire your brains.

00:07:54 Kate Joyner

So we really have to challenge our assumptions about what an organisation is and how does it produce value. And yeah.

00:07:59 Marek Kowalkiewicz

Exactly. We very much like taking our participants out of their comfort zone. Basically, from the very beginning of the course. We spent quite a bit of time showing how biased we are when it comes to digital transformation, when it comes to innovation, but we also, you know it’s in some ways it’s a relatively stressful training in some of the editions of the course we go to a pub. Just going to a pub doesn’t sound challenging for most of us, but what we do there is what we call stand up ideation. We take people on stage or give them a soapbox and microphone and, you know, in a similar way to having comedians in a pub, that’s right, we throw challenges at them. It is a very, very unusual environment. Not every edition has a pub tour included. So just you know, just to cover this but it’s definitely all about taking people outside of their comfort zone.

00:09:07 Kate Joyner

Excellent, so my understanding over the two days, and this is something I’d really like to engage with myself, there’s six kinds of ways of disrupting our thinking, I suppose, and this is what each of the lenses encourages us to do. So, I understand the first one is proactive organisation. This is the way about thinking about getting closer to the customer and thinking about how we can… I’ll let the experts talk rather than me pre-empting.

00:09:33 Marek Kowalkiewicz

The background tastes it’s all about re-imagining how you deliver value to your customers. We do start with preparing our participants to think about the needs of their customers or the organisations that they work with, or individuals that they work with, to think about those differently, and then we apply those, as we call them, ideation lenses and proactive organisation is one of them. In the proactive organisation lens we basically ask how could you be faster than your customers? How could you predict your customers’ needs? How could you pre predict your customers’ life events and then offer services that your customers might need. There always a question about how to do it in a non-creepy way so that whenever this happens your customers are actually thankful and not concerned about the offer of a service, but imagine, you know, let’s say you’re going for a business trip, right? Michael, let’s say you’re going for a business trip, right? What type of proactive services you could imagine?

00:10:34 Michael Rosemann

So I’m in the perfect world. The organisation knows before I know that I’m going on a business trip. The organisation, before I know, would spot attractive fares for me, would promote fares, would put potentially… even organise and book a trip for me knowing what my preferred supplier is. So what Marek described was this notion of, I feel so much trust I delegate decision rights to the organisation that is proactive and at least to a fast and incredibly convenient solution, if the trust is in existence.

00:11:08 Marek Kowalkiewicz

Absolutely, and we apply it to the organisations that are in the room. So, whether it’s a public sector agency, for instance, which is something how to offer public services to citizens, or maybe a retailer thinking you know how do I offer refills for a product that a customer already has and so on. That’s the next step, but it’s really first introducing that mindset.

00:11:29 Kate Joyner

So, this is the whole thing about taking all kinds of friction away from the way that we engage with organisations.

00:11:36 Marek Kowalkiewicz

Yeah, especially when this particular interaction with the business is more of a burden. If this is something experiential, sometimes you don’t want to remove that process, right? Just like we like sometimes to go shopping just for the experience of shopping. But in cases where we want to remove that burden, that’s a very interesting lens to consider.

00:11:58 Kate Joyner

And one thing we can also think about is the way that we can enhance, so enhance is your second ideation lens. So there about thinking about for example, the way that we, the process by which we transact with. The client could be mixed up with that, have I got that right?

00:12:15 Michael Rosemann

Yes, that’s right. So, these two lenses, “proactive” and “enhancing” are both process related. Proactive is very much about starting the process much sooner than previously. Enhancing is about as you highlighted, Kate, changing the way the process looks. We don’t have a predefined opinion on what works best, but what we teach is alternative scenarios. For example, you might say it’s an opportunity to triage a process. So instead of saying we have a sequence of activities, we triage and try to work out is there, let’s say something like a premium model? The customers probably pay more for better service. It’s a simple question. A second one could be resequencing. Resequencing means you still do the same things just in different sequence. The popular example what we see is usage-based pricing models. When payment that happens at the beginning is moved to the end facilitating entire new business models. And the third one might be something like when I create optional activities. What we do here is we present so called enhanced patterns and then let the audience play with these patterns. So, on the one side they have to be able to design the process, see that payment could be moved to the end and the second step is sensemaking. And if this will be in existence, what is in it for us or our client? So it’s just those 2 steps. And again, it’s highly interactive. Again, we take a simple scenario to understand the concept and then, and that’s exciting for Mark and myself – we never know what will happen when we take these concepts to the specific industry or the organisation and its often eye-opening and also for us an amazing learning experience, how creative individuals are in using these patterns.

00:13:57 Kate Joyner

And how we can create a, you know a client service that it’s better than people expect, so exceeds their expectations. So, we can also, something that I find quite intriguing, I suppose is your “derived” lens. So, which is how might another organisation run your business? So, we often think in universities if Netflix was running our business, how would it look? I think it’s a fun and intriguing question because it really mixes it up, doesn’t it? Is that what’s intended, you know, by the derived lens?

00:14:27 Marek Kowalkiewicz

That’s right, that’s right. You got it. So if Netflix were running QUT we would at this stage be creating so much content that you would not even consider going into any other university because there’s just so much available in this particular at this…

00:14:45 Kate Joyner

So we will stream our services?

00:14:46 Marek Kowalkiewicz

Oh, it might be this as well, but you know those lenses are probably more about the mindset rather than about you know particular technologies, so we would look at, you know, if you’re using the example of this particular organisation we would probably look at the shift of the types of services offered. You know from rental services through streaming to media production, right? And in a similar way we would think about ourselves. And like I’m saying the University at this stage would be probably creating a lot of content.

Ultimately, “Derive” the lens is all about recognising that there might be other industries that you know on the surface are very different. But when you look a bit more closely at them you will see a lot of similarities and recognise that they have already solved the problem that you’re having.

I love how Michael uses the example of movie productions where this is a business which has to hire a lot of people for a very short period of time and then let them go at the end of the production. And Michael draws that analogy to higher education sector where we have to do a very similar thing every semester with our teaching stuff.

00:16:08 Marek Kowalkiewicz

But also, the same thing happens with students, right? Onboarding students, onboarding new employees. There’s a lot that the media industry or filmmaking industry could learn from universities, perhaps even outsource some of the operations to other universities. We love asking those questions we love to ask, how would Australia Post operate if they were run by Hilton, the hotel chain? How would they?

00:16:35 Michael Rosemann

I mean, it’s a good question. It’s important for..

00:16:36 Kate Joyner

Concierge services?

00:16:39 Michael Rosemann

It’s important to understand when we give you an industry, whether it’s Disney, Hilton or on Netflix, what are the concepts that these industries do really well? So, it’s often easy for the audience to look at IT industry, but it’s challenging to understand. What can I learn? So, the hotel you might argue they do loyalty programmes or random acts of kindness upgrading extremely well. And that shows also the tradition of… so the course is less about here’s a problem and where it has solved this in another industry, it’s sometimes just searching for inspirations.

00:17:11 Kate Joyner

Searching for inspiration. So, your 4th ideation lense is “Social Capital” so that it’s looking at, I’ll let you explain it, but I know a lot of businesses, typically service businesses are trying to build community. That seems to be the big theme at the moment. So, it is about how does your business attract social capital, have I got that right?

00:17:33 Michael Rosemann

Correct, so in a simple way we say how do I create a company that gets better the bigger it is? And in theoretical terms, to talk about network effects. And it often means a peer-to-peer, a customer-to-customer conversation. This is when products become platforms. Take a bank. Behind every mortgage is a homeowner. Now I could either compete on selling mortgages or creating a community of homeowners. In a car insurance environment, behind every car insurance is a car owner.

So, what we try to encourage is a community that creates a new lock in effect. So, when you see typical Internet success stories they have a very high market share, and it comes on that sort of social capital. And so, what we do in our conversations, we ask the audience, tap into your customer cohort and then try to work out if this is not a single service, provides a single customer, but you actually would witness customer-to-customer conversations, curation or shared content production. What would emerge?

00:18:31 Kate Joyner

What would emerge? Yeah, so a fascinating thought experiment as they all are. That’s what the ideation lenses are. They help us think in different ways. Experiment in different ways and in a safe environment.

00:18:42 Marek Kowalkiewicz

Absolutely, and it is fascinating when we look at organisations that are in the room during the disruptive innovation leadership course and we introduce a lens like this one. That moment when they realised the social capital that they have, it’s almost a revelation to you know to some of them. And then we realised that sometimes you can almost you know, flip the equation from just customers you could turn those groups into value providers. The way, you know Michael described it as locking effects, that’s one approach, but in some cases, you can even look at your customers are practically employees, right?

We had a beautiful example with Queensland State Archives where they realised that they are the largest employer in Queensland, not when you look at the contracts that they issued, a relatively small group, but because they are in the business of creating and maintaining public records. It happens that practically every public sector employee and more have to work for them, by appraising documents, by working with the records. So now the question is now that you have this workforce that’s possibly into millions of people, what can you do with them?

00:20:05 Kate Joyner

Yeah, so they’re all co-producing the product, right? The value, absolutely. So sometimes we can think about that’s an asset. Social Capital is an asset, but we have other assets in our organisations that we may not use to full effect. So, this is the utilise lens. So what’s going on? What kind of assets do we have lying around that we could create more value from?

00:20:27 Marek Kowalkiewicz

We like to say that we talk about hardware, software and wetware. And what we mean by that is hardware are those assets that are such as buildings or facilities that organisations might have. Software could be the digital assets. Wetwear is the humans.

00:20:45 Kate Joyner

Oh, I love that term. It’s a little bit dystopian though, Marek.

00:20:49 Marek Kowalkiewicz

Like I said, we like to take people outside of their comfort zone. There’s more. Obviously there’s more you know. There are assets such as the brand, the perception, the trust in the organisation, right? But it’s all about having almost a survey of assets available for an organisation.

And then it’s a very simple question and again this is common with all the lenses that were talking about. They’re meant to give individuals a confidence when it comes to ideation. It’s not like brainstorming where we don’t know where to go with our ideas.

00:21:23 Kate Joyner

So, you’ve got a few guardrails around it. Scaffolding.

00:21:25 Marek Kowalkiewicz

Correct, so with those assets we’re asking a very simple question. Now that you have listed those answers, are there any new ways you could utilise them? And of course you know we start with very simple examples, and the simple examples are, you know there’s underutilised space, what could we be doing with this space? But at some stage we go into a level of conversation where we took, well we have, let’s say we are a child care services provider, we can look into one of our assets which is connections between the parents of the children that we take care of.

Have we ever done anything about this network? The social network of parents? Is there any potential there, right? Actually you can see that I’m also sort of linking to the one of the lenses that we discussed before, that happens quite often, but it’s all about those completely new underutilised areas.

00:22:21 Kate Joyner

So, it brings us to our last, and I can see how they’re all related in a way, the oppositional thinking. So, that thinking about the process, business model or strategy as if the opposite was reality. So instead of charging your customers that you pay them, for example. So, I know that the example that you use is their business, where you take your car to the airport and pay for housing the car. Or they could pay you for using your car. So as an example of opposite oppositional thinking, have I’ve got that right?

00:22:54 Michael Rosemann

That’s right, Kate. So, opposition is maybe the closest to business model innovation. So, what we do is we say, well, take the key assumptions that are currently in place in your organisation or industry and put them upside down. We don’t say it always works, but again it’s searching for inspirations trying to work out what could happen. So, what you describe is the typical, so what’s the opposite when it comes to payment? So instead of you as a customer paying me, we pay you and then we try to work out how we get there. It could be simple services, so you might be a healthcare provider. Instead of saying I look after sick people, I try to make sure that you remain healthy.

And as long as you’re healthy, you would pay me and in the moment you get sick, I take over. It could be directional. So instead of the customer coming to supermarket, the supermarket might say, come to you. And that gave birth to pop up stores. So, it’s not just only about who pays, it could be where the service is delivered, how it’s delivered, and what we use is sort of strategy canvas that we know from Blue Ocean strategy. So, what used to be low, is high. What is high is low, and again like what Marek highlighted, all we do is we give you prompts. In search of the answer what else is possible?

00:24:07 Marek Kowalkiewicz

So, the oppositional lens that you could use to, or the approach here that you can use to arrive at this would be rather than focusing on the positive outputs at the end of the pipeline when you’re a health institution, you actually want to reduce the beginning of your pipeline, right? So, narrow down your pipeline. And that’s taking to extreme what Michael just said with the strategy canvas, right? You just, you know, just look at one of those areas and say you know, let’s move it from high to low, and then the other one from low to high.

00:24:37 Michael Rosemann

But I think it’s also a nice example that shows how lenses come together. So while we might present them in a sequential fashion, the example you just used on the one side would say it’s oppositional. I look after you and want to make sure you’re healthy as opposed to looking after you once you’re sick. But second, it’s an example for being proactive, so don’t react once you’re sick, I try to be part of your life as soon as I can, so sometimes we come up with the same solution from different lenses and at the very end, and then also practise composing more than just one lens.

00:25:08 Kate Joyner

So, this sounds like a fabulous program. So, if individuals or organisations were keen to explore the possibilities here, where would they go?

00:25:16 Marek Kowalkiewicz

This is a wonderful partnership of our small team at QUT with QUTeX and QUTeX being the face of QUT and the arm of QUT and whatever other body parts of QUT are relevant here when it comes to delivering executive education. So anyone who’s interested in attending the program, whether an individual or an organisation, so we have open courses, we also have courses that are specific for organisations. Just go straight to the QUTeX website or visit QUTeX on site to have a conversation with the lovely people here.

00:25:54 Kate Joyner

Well, I look forward to taking that program in the near future, I hope and at this point I’ll say thank you, Marek, thank you Michael.

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Dr Kate Joyner is a Corporate Educator in the Graduate School of Business and delivers executive education in the areas of leadership and strategy for QUTeX. Kate’s speciality is developing leaders and leadership groups for the challenges of the 21st century. She also has particular expertise and academic interest in smart collaboration between organisations and institutions. Kate writes about cooperative ideas, models and practice for an abundant and fair future. As a skilled facilitator, she works with organisations and their partners to deliver productive collaborations.

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