Is there a one-size-fits-all approach for successful digital transformation? Hardly. But there are some key ingredients that we keep hearing in interviews with C-level executives and managers. Among them: high risk acceptance, a high degree of autonomy, and empowered decision-making.
At Netguru, we’re talking to top executives from various industries to see how they are trying to solve the digital transformation dilemma.
In this Q&A, we talk with Mats Lundquist, CEO at Telenor Connexion; a specialized Internet of Things (IoT) company within the Telenor Group, one of the world’s major operators. They have succeeded where others failed – building a solid B2B unit within a holding focused on consumer business.
Mats Lundquist was also one of the guest speakers at Netguru's panel on digital transformation during Web Summit 2019.
Mats, could you describe your company’s offering briefly?
Telenor Connexion provides enterprises with the means to easily manage IoT connectivity in multiple countries. With a long history working with the Internet of Things, we offer a complete package of global managed connectivity, a cloud-based IoT platform, and managed services.
There is one particular thing that strikes me about Telenor Connexion. How did you succeed in building a unit with a business model so far from the core business?
I believe one of the key factors of our success was that we were allowed to operate outside of the core organization. When we started the company back in 2008, the IoT side of Telenor’s whole group was minuscule. Given the different nature of both businesses, I can hardly imagine how it would have been possible to build this company internally.
You were setting up a different type of business, but I assume that wasn’t the only difference?
We were aiming for markets where Telenor’s presence wasn’t strong, such as the US or Japan. Therefore, we needed more autonomy to recruit different types of talent and to incentivize them to help build and grow the company.
I don’t think I’m saying anything new by stating that when you have an established business, a new venture faces the risk of being down-prioritized and scaled back the first time targets miss the plan. We were lucky to avoid that drawback.
There are a lot of companies embarking on digital transformation, yet many of them seem to get lost in the process. What is your tip for driving actual innovation, instead of innovation theater?
Do your homework first. Whenever a company is stuck in the great factory of proof-of-concepts, the reason is that someone has not done their homework, hasn’t started with the strategy, hasn’t picked key areas, and finally, has failed to secure enough resources to back up key initiatives.
Could you describe the way Telenor Connexion helps others with digital transformation, but in one sentence only?
I’d say that we provide a communication infrastructure for innovators, allowing them to scale their operations.
Communication infrastructure means different things for different companies. What does it mean for Telenor Connexion?
We design, implement, and operate solutions for businesses that are embarking on digital transformation. Our field of expertise is the Internet of Things. We have access to over 400 mobile networks, through which we allow our clients to connect things, machines, and people. We can connect basically anything: from cars, trucks, and smart homes to garbage bins and ice cream machines.
Could you name a few examples of successful transformational projects?
Volvo Cars, which is one of our strategic partners: The journey to get there lasted a few years, but now connectivity and connected cars are at the core of Volvo Cars’ strategic agenda. We see that connected, electrified, and automated cars will have a great impact on both the company and the industry, but also on society at large.
Other traditional manufacturers have opened up to innovative technologies and adopted subscription-based payments combined with IoT. For instance, Husqvarna allows customers to rent tools from a special container instead of buying them to access new customer segments and innovate their offering.
Does IoT help mid-size and small companies as well?
We are partnering with Binando, a German company focused on the digitization of waste management. Binando provides sensors that go inside waste bins, plus software that combines data on which bins are full, with real-time road traffic data to optimize routes for collection trucks.
Telenor Connexion has provided Binando with special SIM cards, helping the company to offer reliable mobile connectivity for users in any market.
What would be your advice to companies that are thinking of digital transformation with IoT solutions?
The time is now. There is a lot of hidden data in IoT, and today the cost of the infrastructure is at a level where IoT newcomers may leapfrog the early complexities of digitalization faced by first movers.
Also, I believe that connectivity technologies will be one of the main forces driving many industries forward. So connectivity should definitely be taken into account from the beginning of the product development process.
What makes you feel so confident about the growth of IoT?
There are three major trends that, in my belief, will translate into the growth of IoT infrastructure for years to come.
First, we have an aging population, which accelerates the need for digital health solutions and the digitalization of the entire health industry.
Secondly, we see megacities (large city metropolitan areas, typically with a population of more than 10 million people) growing in number. Each megacity struggles with the side-effects of mass urbanization, e.g. traffic congestion and ineffective waste management. It is obvious that large cities cannot continue the way they operate today.
And the third factor fuelling the massive growth of IoT is low-cost sensors, lower costs for data, and new technologies such as 5G.
In your opinion, how can company leaders foster a transformation mindset?
Set bold aspirations for transformation and make sure you understand why you need to transform. Create alignment on the initiatives that will move the needle and fund them properly.
And what should they avoid?
Avoid punishing failure since it is very easy to become risk-averse in an organization when making transformational change.
About Telenor Connexion:
Building on almost 20 years of experience, Telenor Connexion provides global IoT connectivity and cloud services to enterprises with large fleets of connected devices, as well as third-party service providers.
Telenor Connexion manages more than 13 million connected things in more than 180 countries for global customers including Volvo, Scania, Hitachi, Verisure Securitas Direct, and Husqvarna.
With its headquarters and tech center located in Sweden, the company has regional sales representation in the UK, US, Germany, Italy, South Africa, Singapore, South Korea, China, Malaysia, and Japan.