This article describes the business development activities carried out in The Lahti Region Outlook – Improving SME’s Skills in the Future Business Development project (NÄKY project) at Lahti University of Applied Sciences in 2016-2017. For rapid and unpredictable changes in everyday operating environment, SMEs have to navigate and renew their own businesses. The aim of the NÄKY project is to enhance SMEs skills to anticipate week signals and support SMEs to exploit signals in business development. During the project SMEs have been trained to recognise the main outlooks and exploit them in businesses development. The main partners of the project are the local Chamber, Universities and vocational institutes.
Authors: Jari Hautamäki & Jussi Eerikäinen
Background
McGuire (2002) underlines framing and mobilisation as the main development measures. According to Gibney et al. (2009, 19), framing means strategic rethinking and co-creation of things getting new shapes and crossing layers and borders. Framing filters knowledge and data flows relating to core development. To paraphrase Sotarauta et al. (2007), framing and filtering influence partners’ minds and support in finding a shared direction for focusing resources and know-how.
According to Solomon et al. (2007), customers and consumers are not only passive buyers, but are more active participants having the desire to be involved in companies’ product and service development. Arnkill et al. (2010) present that companies should undertake major transformations in their innovation processes and business models in order to deliver more valuable products and services to the market. New innovation strategies of companies often involve increasingly open business models, a greater focus on understanding latent consumer needs, and more direct involvement of users in various stages of the innovation process (Arnkil et al. 2010, 15).
The Regional Development Programme of Lahti University of Applied Sciences (Lahti University of Applied Sciences 2015) highlights the university’s mission to prepare regional, national and international business-based future knowledge. One of the main aims of the programme is to create prerequisites for exploiting future knowledge in local business development. Moreover, the Lahti Region Business Build-up Alignments 2016-2020 (Päijät-Hämeen liitto 2016a) notes that changes in business are permanent. Therefore, the role of anticipation and utilisation of changes have a great role in renewing businesses. Renewing means implementation of changes in business based on an understanding of the influences of future phenomena. Furthermore, abandon from out-of-date business practices is needed.
The Lahti Region Development Programme 2018–2021 (Päijät-Hämeen liitto 2017) shows that digitalisation and internationalisation as well the new growth sectors like circular economy, design, event management and travelling will change the business environment and competition. That creates new kinds of opportunities to generate new business ideas and renew business development processes from the point of view of future knowledge and anticipation. In addition, the programme states that the Lahti Region should utilize more universities’, vocational institutes’ and international companies’ resources and competences in renewing businesses and creating new start-ups.
Lahti Region’s Plan in Preparation for Structural Change (Päijät-Hämeen liitto 2016b) highlights specialisation and test-peds based on regional strengths and opportunities. Development processes are seen as a broad network-based collaboration, which produces new kinds of perspectives and challenges relating to regional development. Furthermore, according to Lahti Region’s educational alignments, working-life and training processes should be more overlapped for involving students in the development of companies.
Business Development Challenges
Rapid and unpredictable changes in operational environment increase challenges in SMEs’ businesses. Preparing for positive or negative changes requires companies to navigate and renew their businesses. Enhancing competitiveness will be possible in companies that underline customer-oriented development and co-learning as well as long-term anticipation. To stay at the top of development is increasingly more important and relevant. (Hautamäki et al. 2013.)
According to Lahden ammattikorkeakoulu (2016) vital SMEs themselves actively participate in the creation of future and ongoing changes. For clarification, SME’s strategies require recognition of future drivers and opportunities. Learning about the future could be promoted by anticipating in collaborative networks and by efficiently utilising the public sector’s stakeholder resources and prerequisites.
Future business will be generated as results of decisions in companies every day. Managers and staff of SMEs have to learn to recognise outlooks and new opportunities. Future knowledge enables the creation of future-oriented outlooks. Linking outlooks to companies’ business strategies enables mobilisation of development processes and innovative product and service development. (Lahden ammattikorkeakoulu 2016.)
Current SMEs’ know-how in anticipation needs to be enhanced. However, SMEs’ resources for innovative development are normally not sufficient. There are usually problems with meeting future knowledge and business development. Nevertheless, almost every SME should have innovative business inceptions and initials as well as a the capacity to recognise upcoming technology signals and market shifts over industry sectors (Lahden ammattikorkeakoulu 2017).
Anticipation could be applied and mobilised in collaboration between the public sector and private companies in an agile and practice-based way. From the point of view of collaboration, local universities and business development stakeholders should take responsibility for creating a local future business platform. By combining separated resources to the platform, the effectiveness could be increased. (Lahden ammattikorkeakoulu 2016.)
Network for mobilising development measures
The NÄKY Project (Lahden ammattikorkeakoulu 2017) and anticipation network were established. The Häme Chamber decided to work as a mediating organisation between universities, vocational institutes and chamber-member companies. The shared aim was to establish a network over the Kanta-Häme and Lahti Regions for continuing local collaboration between education and companies, together with developing new practices. One aim was to test social media applications in disseminating results and develop multi-channelling communication practices in network (Eerikäinen & Hautamäki 2017).
Figure 1. The Anticipation Network of the NÄKY Project (Lahden ammattikorkeakoulu 2017)
The aim of the project has been to create new SME-based agile development practices for recognising and visualising future trends and signals, as well as for exploiting them in SMEs’ business development. The duties of the universities have been to manage projects and create a development platform with different sorts of test-peds. The platform has been needed for testing cross-fertilization methods intended for colliding managers, experts and students of SMEs and development organisations (Eerikäinen & Hautamäki 2017).
The main aim of the project has been to create a regional operating model for enhancing SMEs’ anticipation skills and increasing companies’ capabilities and inspiration to develop and nimbly utilise the strategies of their own. For disseminating the project’s results, an externally funded national development programme and project will be prepared.
Preliminary Results of the Project
The NÄKY Future Map (figure 2) has been prepared on Trello community by experts and students working for the project. The map presents 100 main future trends and signals, which are significant from the point of business development today. The map is interactive and enables involvement in conversations relating to complementing and enriching the information included to single trends and signals. The NÄKY Future Map supports updating linked to https://trello.com/b/YUuunEwd. (Lahden ammattikorkeakoulu 2017.)
Figure 2. The NÄKY Future Map (Lahden ammattikorkeakoulu 2017)
The regional operating model for enhancing SMEs’ skills in anticipation has been tentatively modified from the Quadruple Helix model (Figure 3). The final model will contain major stakeholders, relations, encounters, test-peds, platforms and practices fostering SMEs’ roles in the business development learning process.
Figure 3. Tentatively Operating Model based on the Quadruple Helix -Model (cf. Chesbrough & Bogers 2014).
The roles of the stakeholders of the operating model have been settled. Häme Chamber’s member companies’ role have been to learn, how to recognise future trends and signals as well as how to exploit the Business Model Canvas and Lean Service Creation in combining future signals and agile everyday business development together.
Through the experiments, the local Chamber’s, universities’ and vocational institutes’ assignments have been to find new collaborative ways to anticipate, enhance anticipation skills and foster SMEs’ business development processes. The Regional Council’s assignment has been to finance development measures of the NÄKY projects, with the aim of implementing regional strategies and programs, which direct regional development resources. The aim of the students has been to network with SMEs, creating new ideas and learning development processes typical for working life.
To combine the previously mentioned stakeholders and interested parties has been based on the involvement of a development context arranged by the projects. Every party has the same development platform, even though they each have different aspirations. The Context Management contains listed events, meet-ups and workshops, such as the following:
- NÄKY Kick-off Events, 24th and 27th of January 2017
- Häme Chamber Afternoon Event for Influential Persons, 16th of February 2017
- Workshop: Building-up and Internationalisation 30th of March 2017
- Workshop: Running-up Business by Utilising Business Model Canvas, 25th of April 2017
- Workshop: How to Exploit Trends and Future Signals in Business Development, 27th of April 2017
- Workshop: Drivers of Change and alternative Outlooks, 7th of June 2017
- Workshop: How to Combine Ideas by using Agile Methods, 8th of June 2017
- Workshop: Deploying Customer Experiences in Service Development, 27th of September 2017
- Workshop: Social Media Applications in Marketing and Selling, 28th of September 2017
- Future Business Summit, 9th of November 2017
One of the most important outcomes of the NÄKY Project will be the local, future-based business development plan. Planning is still in progress without the final report. The aim is to create a new business development project, which is meant to disseminate good practices to other Chambers and inspire to create the same kind of development activities as the NÄKY Project. Moreover, the effectiveness of the NÄKY Project activities should systematically explore and implement measures by applying universities’ RD-opportunities (Eerikäinen & Hautamäki 2017).
For marketing workshops’ contents and results through multiple channels, some social media applications have been tested. The NÄKY Map of the Future has been created by applying the Trello application. Many newsletters have been sent and released by Facebook and traditional websites. The Häme Chamber’s online newspaper has been a workable channel for disseminating good practices and case stories (Hämeen kauppakamari 2017).
Summary
The main task of the NÄKY projects is to enhance SMEs’ skills to anticipate business transformation and utilise agile methods in business development. There are many reasons for that. According to Hautamäki et al. (2012), consumption has been a target for strong fragmentation in the last years. The same customer is able to belong to many different consuming communities and behave in many different ways. Consumption behaviour will increasingly change in the future because of the fast transformation of operating environments. That’s why marketing and selling have to be based increasingly more on consumers’ lifestyles, significances, images, myths, symbols, shared values, conversations and stories as well as acquisition practices.
Future knowledge is needed for developing businesses in companies and communities. Main challenge is to filter and make visible knowledge and information, which relates to development targets. The duty of Universities of Applied Sciences is to produce knowledge, which is exploitable from the point of view of the business development of working life organisations and networks. For this reason, Lahti University of Applied Sciences and Häme University of Applied Sciences have launched the NÄKY projects with close collaboration to the Häme Chamber.
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About the authors
Hautamäki, Jari, Ph.D., works as a director of regional development in Lahti University of Applied Sciences. His duties include developing collaboration between university and working-life and developing services for business organization.
Eerikäinen, Jussi, M.Sc. (Tech.), is a CEO of Häme Chamber of Commerce. Previously he has worked for Lahden Messut Oy and Yleiselektroniikka Oyj as a managing director. A wide experience in foresight activities and business strategies belong to his competences.
Article picture by Jari Hautamäki.
Published 7.12.2017
Reference to this publication
Hautamäki, J. & Eerikäinen, J. 2017. How to Recognise and Exploit Outlooks in SME Level. LAMK RDI Journal. [Electronic journal]. [Cited and date of citation]. Available at:
http://www.lamkpub.fi/2017/12/07/how-to-recognise-and-exploit-outlooks-in-sme-level/
