Q&A: Ole Daugbjerg
An internal idea contest called the Man in the Moon is a great way for employees at Denmark-based Danfoss to challenge conventional thinking. EY's Gregory Ericksen, Global Vice Chair for Strategic Growth Markets, discussed this topic with Danfoss Chief Reputation Officer Ole M. Daugbjerg.
This Q&A is part of Igniting innovation: how hot companies grow from within, where you'll find more examples of how companies foster creativity on their home turf.
Q: How important is innovation to Danfoss?
A: It's the key to our long-term survival. Customer satisfaction is a crucial part of our business strategy so we have to innovate — not only to meet today's customer needs but tomorrow's. The idea is that 20 years from now, your current customers won't be able to live without you.
Q: What's the idea behind the Man on the Moon program?
A: We wanted entrepreneurial ideas and thinking to take root. We knew there were good ideas floating around the company, but probably not in line with what might be called the Big Machine. The program is designed to tease out those ideas.
When we launched the program in 2004, we thought about having fun while learning entrepreneurial skills. But soon we found that some submitted ideas were of high enough quality to become real products.
Q: How do you harmonize entrepreneurial thinking and behavior with big company processes?
A: A typical entrepreneur may have a brilliant idea and see its commercial potential in a way that no one else does. Often, however, entrepreneurs don't know a great deal about finance, or how to deal with banks, or establishing sales channels or production lines.
Entrepreneurs have drive and initiative. Corporate entrepreneurship aims to take that passion and combine it with the resources of the corporation.
Q: How does the program work?
A: It's a business plan competition: develop an idea, see its possibilities, and figure out how to sell it to our group committee, which consists of the top ten people in our company. The committee will ask the same questions a bank would, but also include experts on supply chain and other issues. This forces whoever competes to cover all their bases and assemble an effective team. That makes it more likely that the idea will come to fruition.
Q: Is talent management part of the program?
A: Yes, part of the idea is to give intrapreneurs a career path. They can stay with the venture, but they don't have to. At Danfoss, you can be a specialist or an intrapreneur and still rise quite high, even if you're not on track for the CEO position.
Q: Recently, Danfoss changed the way it will run the program. Tell us about that change.
A: We're refocusing innovation around our core businesses. That's where we have the greatest knowledge of customers and markets, and the skills to convert ideas into real businesses. For these reasons, innovation will have the most impact in our core business.
With traditional corporate entrepreneurship, you tend to take available resources and spread them across many ventures. Maybe 1 in 10 will make money, so you need 50 ventures to see long-term profit. Our new thinking says that if we stick to our core business, we're more likely to succeed.