Why Innovation Matters: A CEO Perspective

Niels B. Christiansen is the CEO of Danfoss, a world-leading company within refrigeration, heating and energy solutions with more than 23,000 employees. He had two interesting reflections in Jyllands-Posten, a Danish newspaper, today:

“Earlier, there was a tendency to continue doing more of what you are were doing right. Today, the challenge is to dare to challenge what works – before the problems occur.”

“The thing is that the world is changing and this change happens faster than ever. Earlier, the overall state of the markets was kind of predictable. Typically, we had 2-3 years with a slump and 4-5 years with a boom. If the U.S. market was slow, then it was probably better in Europe. Today, the development changes each quarter and it goes up and down in the most of the world at the same time and at the same speed. This brings some very different demands to companies.”

I believe that you cannot solve these challenges or succeed in such an environment without innovation. Furthermore, you cannot succeed with this if you do not innovate on how you innovate.

Having some prior knowledge of Niels B. Christiansen and Danfoss, I think he is one in a new generation of top executives that understand what innovation is in a modern context. It has to be taken seriously all the way to the top level, it has to go beyond just products and technologies (business model innovation) and it has to be open. It will take another few years before we really start to see the impact of this new generation of executives, but we are heading in the right direction.

There are indeed interesting – and challenging – times ahead of us.