Growth and changing markets boost innovation at Wärtsilä
Wärtsilä article October 2012
The article was first published in Scanorama's Nordic Business 2012 supplement in October 2012
Three years ago, Wärtsilä revamped its innovation strategy to generate new business, improve operations and accelerate innovation. Ilari Kallio, New Technologies and Innovation General Manager, explains how Wärtsilä is building a culture of innovation by bringing together the creativity and capabilities of its employees globally.
As a global leader in providing power solutions for the marine and energy industries, Wärtsilä is actually positioned very close to energy consumers. In a world where CO2 emissions, energy demand and environmental issues are in the spotlight, every one of us is touched by power generation – it heats our homes, switches on the lights and cooks our food.
Wärtsilä has a history of innovation, being first in the market with dual-fuel engines, for example. Over the past decade the company has experienced of significant growth. Mr. Kallio explains “Rapid growth brings challenges, but it also brings several opportunities. When you are growing quickly in a short time frame, it can be difficult to manage innovation potential across 170 locations and 70 countries.” A new strategy was developed, but innovation culture does not come easily, consistent work and actions with longer term focus need to be taken to improve it “R&D is about knowledge and that knowledge is in our people,” he states unequivocally. “For some time, we had been looking for a way to harvest the creativity and ideas of our employees worldwide.” The solution, an internal system called MyDea, emerged from the new strategy. To date, this unique intranet service has received some 1500 submissions. 100 new initiatives continue to pour in every month. Whether big or small, each submission is evaluated by a subject matter expert. ”Naturally, we don’t intend to implement them all. Innovation is about taking a good idea and putting this to use to generate value – after all an idea which does not bring any value is not an innovation, it is just an idea. There may also be really good ideas, but which are not aligned with our strategy.” This is where connecting with start-up companies, universities, institutes, public agencies, and other industry players can help.
Wärtsilä is involved in various programs in Finland and other Nordic countries - through which ideas and innovations, which are not in line with Wärtsilä’s strategy, can be developed further extramural – outside corporate walls. Two examples of such activities are a Finnish initiative called Innovation Mill and a business incubation program coordinated by Encubator AB in Sweden. “Working through these external networks, we are able to spin out ideas and allow someone else to take them further to generate new business and ventures.
”Furthermore, Wärtsilä is participating in various research & development co-operation programmes on national, EU level and globally. One example is a so called HERCULES project, which is a EC-funded research programme, a co-operation between engine manufacturers, companies and universities. The aim of this long-term programme is higher efficiency, reduced emissions, and increased reliability for marine power solutions.
One of the ongoing mega trends globally is that the demand for energy is increasing while environmental issues are driving policy-making. The ongoing drive towards low carbon energy systems is creating strong growth in the utilization of renewable energy sources. However, high shares of variable wind and solar generating capacity create major balancing challenges for power systems. These realities are pushing the boundaries of technology and bringing competitive advantages. “If energy production and consumption are not in balance, the power grid will go down and the lights will go out.” However, Mr. Kallio points out, “we can offer a highly efficient and dynamic technical solution, Smart Power Generation, which follows power production needs rapidly and reliably, using a large variety of liquid and gaseous fuels and being able to switch these seamlessly, ‘on the fly’ This type of innovation is a direct result of shifting trends - helping to cut emissions, supporting the development and the use of renewable energy sources, and meeting increasing energy demand.”