Right from the company’s earliest analogue days in the 1800s, to the present day where almost 90% of its revenues comes from digital products and services, Wolters Kluwer has remained on the winning side of innovation. This has not happened by chance. A lazer sharp focus on the customer has long driven innovation at Wolters Kluwer, allowing the company to remain relevant in the face of great change for almost two centuries. Today, the company’s innovation initiatives span internal programs such as the Wolters Kluwer Global Innovation Awards and Code Games to external programs such as its Legal Innovator Awards. The company has gained numerous external accolades for innovation across its full portfolio in 2017 alone, and its leaders are active within the global innovation community from New York to Nieuwegein, the Netherlands, and beyond. In one such example, Nancy McKinstry, Wolters Kluwer CEO, recently participated in the 11th annual Accenture Innovation Awards—a year long innovation program culminating in the Innovation Summit, this year held in Amsterdam. You can see the 2017 Innovation Award winners here. McKinstry (a member of Accenture’s Board of Directors) participated in the panel discussion of the opening ceremony and was later interviewed by Accenture Chief Strategy Officer Omar Abbosh to explore how Wolters Kluwer manages to stay on the winning side of innovation. Below are insights drawn from that opening panel, followed by a transcript of the interview with McKinstry and Abbosh.
The Corporate and the Startup
One of many deep dive ‘innovation bubbles’ at the 2017 Accenture Innovation Summit, the Netherlands
One of the key themes of the opening panel discussion was an exploration of whether the lines between startups and corporates are blurring when it comes to innovation.
The panel discussion (starting here at 48:00) was moderated by Sander van 't Noordende, with Nancy McKinstry and Dimitri de Vreeze, DSM Board member, representing the corporate point of view. Startups were represented by Chris Hall, CEO of Bynder, and Maayke Damen, co-founder of Excess Materials Exchange.
Invited to open the discussion, McKinstry (pictured left) shared that customer centricity has been key to the successful transformation of Wolters Kluwer over the decades. This includes a strong focus on customers’ pain points, and applying deep company knowledge of customer markets and advanced technology to best solve the customer’s job to be done.
An agile and iterative approach to product development and—most importantly—a consistent reinvestment of 8-10% of the company’s revenues into innovation in products and services every year since 2003, has effectively allowed Wolters Kluwer to become its own disruptor, she noted. McKinstry commented that, in essence, this approach is how the company has survived and thrived for more than 180 years.
Unlike startups, she also said, large corporations such as Wolters Kluwer have a strong—often decades long—legacy that requires great and consistent care and attention to manage well.
Innovation and the blank slate
For his part, Chris Hall (pictured left), CEO of startup Bynder—a digital file management platform—considered the lack of legacy for startups was both a ‘blessing and a curse’. Investing in technology alone would not be enough for Bynder to survive or thrive. Instead, one of the biggest challenges for startups is having a completely blank slate of possibilities
On the other hand, he said, this afforded Bynder the opportunity to completely rethink elements of organizational design that have been standard for many years, such as holidays, job titles, job descriptions and yearly reviews—none of which the company uses.
Hall commented that technology partnerships with corporates has been key to manage strategic risk and maintain forward momentum. On reflection, he commented that perhaps speed is the most important element in innovation overall—especially when it comes to delivering value to customers. And it will always be the ‘quicker fish that eats the slower fish’.
Innovation and Future-proofing
Speed of change is also of the essence for DSM, noted DSM board member Dimitri De Vreeze (pictured left). In the Netherlands, the transformation story of DSM is well known. Over the course of more than a century, the company has pivoted much like a lean startup transforming first from a coal mining company to a fertiliser company—and then in the last two decades to the life sciences & materials sciences company it is today, with a strong focus on biotechnology.
In conversation, De Vreeze stressed that in addition to innovation that sustains current business, 25% of its innovation funding goes to ‘radical innovation’ that is specifically designed to ‘future-proof the DSM of the future’! Continuous reinvention is the company’s goal. Today, the company is also on the verge on becoming consumer facing. “Does it feel awkward? Absolutely. Do we fail fast? No. Where is my concern? There!”, said de Vreeze.
Building upon McKinstry’s earlier point that corporates have a legacy to maintain, he noted that areas in which DSM is ‘allowed to fail fast’ are clearly defined, so leaving the company’s core business strong and intact.
Creating value from waste
Co-founded by Maayke Damen (pictured left), Excess Materials Exchange is a brand new digital marketplace for waste management, built upon blockchain and employing artificial intelligence. The marketplace, Damen explained, operates a little like a dating site; matching companies who have waste to sell, and those companies who can benefit from that waste, so creating create new value.
Citing just one example, Damen told the panel that in order to export tulip bulbs from the Netherlands, tulips must first flower once. Then, the heads of the tulips are cut off and left to wither, or a waste processing company is paid to take them away.
However, thanks to the Exchange, these tulip heads are now used by a Dutch company to create pigments for paint. By matching this company with the right ‘waste’, Damen’s company helps creates value—effectively out of nothing. And as she noted, these tulip heads have an annual market value of Euro 1.5 trillion.
Overall, Damen notes that whereas startups are often quicker at building a proof of concept, corporates are better at generating scale. And to build a successful marketplace, her company will need both.
So are the lines blurring between startups and corporates?
One thing corporates and startups clearly have in common is a strong focus on delivering customer value—ultimately this is what counts for startups and corporates alike.
Speed of innovation is critical for both, too. However, failing fast like a startup is one thing, but failing in a governable way, like a corporate, is another.
As for managing a legacy versus working from a clean slate… time will tell. As a company grows, it encounters new challenges on how to innovate, and inherent challenges of organizational design and achieving scale.
Over the course of the discussion, one thing did emerge around which everyone seemed to agree: no one company can do everything themselves.
From the corporate point of view, McKinstry noted, it is the combination of staying close to customers, and identifying and working with startups that allows a company to thrive. And from the startup point of view, Hall noted, building partnerships with corporates to innovate in areas which are not their area of expertise is a way to scale and manage risk.
To conclude, while we are used to hearing in the popular business press of the corporates that are disrupted by innovative startups, the Accenture Innovation Summit signified a refreshing—and important—shift in perception. By showcasing companies such as Wolters Kluwer and DSM that have managed to thrive and reinvent for over 100 years, we gain a deeper insight that corporates and startups are both part of the same innovation ecosystem.
The Winning Side of Innovation
Some time after the opening panel, in conversation with Accenture Chief Strategy Officer Omar Abbosh (pictured left)—who was also keynote speaker at the Innovation Summit—Nancy McKinstry shared how Wolters Kluwer has managed to stay on the winning side of innovation over time. Below are (lightly edited) highlights.
Omar Abbosh: Earlier, I shared some perspectives on the innovation landscape, of how the things that we saw in sci-fi movies like Gattaca, Star Wars and Knight Rider are becoming real now, and how it is moving much faster than we ever anticipated. What do you think, Nancy?
Nancy McKinstry: I absolutely agree. I think the pace of innovation is accelerating dramatically. I also think that the things our customers at Wolters Kluwer are confronted with are also very dynamic. They are dealing with an explosion of information—and if you talk to a doctor, a nurse, a lawyer, first thing they're gonna tell you is, "I'm being asked to do more with fewer resources." These pain points are significant, and innovation and technology can really help. So I'm very excited about the future of certainly our business, because technology is more prevalent than ever, and available at a much lower cost. You can innovate faster, fail faster—you can do a lot of things today that you couldn't 10 years ago.
Omar Abbosh: I find your thinking about very specific industry pain points interesting, because you actually speak a little like a disruptor startup … because all the startups that I've ever spoken to are thinking about the job to be done; the real end-consumer's problem, and solving that pain point, and using innovation to do it—and big companies sometimes get disrupted because they're not watching, looking around the corners of how those industry pain points could be resolved for end-customers.
Nancy McKinstry: Our approach [to staying on the winning side of innovation] is twofold: First; we stay very close to the customers and their workflow. A lot of our innovation comes from actually watching our customers work, and then leveraging technology—through automation, artificial intelligence, or other means—to get the work done in a more effective way. Staying close to customers is absolutely essential to figuring out where could disruption happen.
Second; staying really close to the market, because it's not as if you can imagine that you can think of every possible solution out there. So, watching what entrepreneurs are doing and then hopefully connecting with them to build an ecosystem around the various customers that you serve. And some of it you do yourself, and some of it you might do with partners.
Omar Abbosh: I think this business of how to watch your end-customer market and the innovation market is super interesting, and there's a concept that I love that sometimes is called "trap value," which is that every company, inside it, there's value that has been trapped because of the way we run and operate today, that could be unlocked, or ‘un-trapped’ with some new innovation. And so, of course, companies are always continually innovating and improving how they operate, for example. But then there's value that's locked inside the wider supply chain between a company and its component manufacturers, the elements of its supply chain. The Airbnb's and the Ubers showed us that there's value to be unlocked in the wider market, putting cars that could be driven for others to work or homes with spaces to be used, and then even the societal value.
Omar Abbosh: When I think about someone like a Disney, who, when they introduced their MagicBand and they said, "People come to the theme park 'cause they love it, the kids love it, but they don't love our long queues, and they don't love screaming kids standing in line to get their burger." And so, "How about if we give people a MagicBand, sensorize the park, and allow people to input what they want in an app, so that when the parents show up at their little restaurant, the server brings their food there and then instead of having a queue." And that shifting experiences is unlocking amazing value for customers, making the company much more relevant and personal.
Nancy McKinstry: But it started with understanding that pain point, that queueing was a pain point, that screaming children were a pain point, and then how do we solve that? I do think, for any corporation, you have to stay very close to understanding exactly what your customers deal with. And now, a quick example in our market that I'm fascinated by is that if you look at a tax professional, they actually spend about 35% of their time pulling data out of different systems, putting it into Excel, and then crunching it for various reasons. We now are developing bots that can now go out and actually gather that data from all these very different systems and put it together in a structured way so that we can improve the productivity.
Imagine if you're a professional and somebody hands you something and says to you, "You're gonna get 35% more of your time back to do other things." In our world, those are the kinds of things that have a dramatic impact not only on the quality of the work they deliver to their end client, but for the professional themselves. And I think that's, again, pretty exciting.
Omar Abbosh: I totally and utterly agree with you. And a lot of people look at these automation and bot-type technologies and they're fearful. But actually, in reality, and what we've found in Accenture, having applied it to ourselves at a very big scale, is that you completely can augment the worker and the worker's experience, and take away the mundane and the boring, free them up to do the more value-added, the more personal, the more human activities, the more complex decision-making type activities. And frankly, it'd be more valuable to their customer, which is ...
Nancy McKinstry: … the End Game
Omar Abbosh: Yes!
For more information on Innovation at Wolters Kluwer and Accenture
• Listen to the conversation with Omar Abbosh and Nancy McKinstry in full
• Listen to the Innovation Summit panel discussion
• Listen to the Executive Insights Podcast on Innovation with Nancy McKinstry
• Read An Introduction to Artificial Intelligence: AI, UX & The Human Expert