1 of 7 in the DON’T LISTEN TO YOUR CUSTOMERS Series

Home » Blog » 1 of 7 in the DON’T LISTEN TO YOUR CUSTOMERS Series

Exercises in Innovation #1: Collaborate with your enemies

Who are your top competitors? What would it take for you to sit down with them at a table and talk about the future of your industry? This thought experiment is about seeing what you have in common your enemies.

Ericsson was able to turn things around, even though they were in very deep trouble for a long time. Do you know how they did it?  With antennas.

Only now the antennas the build are very, very small. Millimeter Wave phased array antennas, sometimes twenty or more inside each phone, will function as the backbone of 5G communication standards. In 2017, Ericsson’s new CEO Börje Ekholm begged his stakeholders for patience as he sold off the media business and redefined the company as a leader in 5G hardware. It was a huge bet on the future and it has paid off handsomely.

Luck and timing did have a part to play in this. Ericsson benefited greatly from the market’s reaction to Huawei’s PR disaster in 2018. Earlier in the year, Huawei beat Apple to become the second largest smartphone manufacturer in the world. By the end of 2018, Huawei was forced to pull out of US markets completely. Criticism of Huawei surged as it appeared that the hardware manufacturer built backdoors into their communications infrastructure for Chinese Intelligence agencies.

While Huawei’s loss became Ericsson’s gain, the real story here is that Ericsson was positioned to take advantage of market changes because they had already realigned their culture around implementing the Third Innovation Horizon concept of 5G.

What people call luck is often the intersection between preparation and exposure. If you expose yourself to new things without being prepared, you will not get lucky. The same is true if you are prepared but never expose yourself to new possibilities.

As the American journalist Tom Brokaw once observed:

“You make your own luck. It is always a mistake not to go. So I jump on the airplane, try new things—sometimes I get in way over my head, but then I think, I’ll work my way out of this somehow. A big part of making your own luck is just charging out of the gate every morning.”

Ericsson kept charging out of the gates and looked at the big picture.

Work on 5G began as far back as 2008, before 4G even rolled out, when the first iPhones hit the market. The introduction of the first app store made it clear that phones would soon need to run much faster and have the capacity for massive data transfers. 5G will also turn each phone into a cell tower repeater. The new mesh fabric approach to cellular coverage will bring low latency to rural areas and overloaded city towers.

In the Third Innovations Horizon, the goal is to collaborate on standards, agree on tools for interoperability, and work with competitors to create a new industry. That’s where 5G is now for most carriers. In the Second Horizon, you begin making tests and prototypes to see what works and figure out the specs of the innovation path you are going to go down. This is where Ericsson is today with 5G and their Millimeter Wave antennas.

Ericsson’s fixation on antennas led them to make a good call, but the source of their next S-Curve came from cooperation among enemies and paying attention to outliers.

 

Download the complete paper here

Share with:

FacebookTwitterLinkedIn

Posted on