This document summarizes an organizational change project at Ericsson Turkey to establish an innovation culture. It analyzed Ericsson's global strategy shift to empower regional innovation. A gap analysis found employees lacked a shared understanding of innovation and clear expectations. Change agents launched an internal campaign with communication, awards, training and an innovation index to measure progress. After 5 months, idea submissions increased 40%. However, more work is needed to fully establish the innovation culture, including developing skills, overcoming resistance, and aligning HR systems to support innovation.

1. Organizational Change & Innovation Culture
in Ericsson Turkey
MM907 HR Management Course Assignment
Hasan Basri AKIRMAK
Rev PA5

2. Organizational Change & Innovation Culture in Ericsson Turkey
Contents
1 SYNOPSIS .............................................................................................. 3
2 DESIRED END STATE ........................................................................... 3
2.1 Assessment of External Fit: New Strategy for New Environment............ 3
2.2 Assessment of Internal Fit: Organizational Changes for Innovation........ 4
3 ASSESSMENT OF READINESS FOR CHANGE................................... 5
3.1 Gap Analysis Activities ............................................................................ 5
3.2 Gap Analysis Results............................................................................... 6
4 ACTIVITIES TO INITIATE CHANGE, ADOPT NEW BEHAVIORS &
STABILIZE .............................................................................................. 6
4.1 Innovation Culture Change - Action Plan................................................. 7
4.2 Innovation Culture Change - Project Phases........................................... 7
4.3 Phase 1 - Accomplishments .................................................................... 8
4.4 Phase 1 - Results .................................................................................. 13
4.5 Summary and Next Steps...................................................................... 13
5 References ........................................................................................... 14

3. Organizational Change & Innovation Culture in Ericsson Turkey
1 SYNOPSIS
This article analyses the organization culture change project for Innovate Everyday
Principle performed by Ericsson Turkey Change Agents. I was elected as a change agent
in February. We are a team 4 change agents and I act as the driver for Innovate Everyday
Cultural Value. The change project will continue till the end of 2011.
To provide some background info: The Change Agents Program has been employed in
Ericsson Turkey since 2009 for certain cultural values. The change agents focus on the
people and culture aspects of an organization and they are expected to reach out to all
employees through a number of initiatives that will motivate employees, increase
customer satisfaction and the perception of Ericsson in the market1.
In 2011, a new cultural value called ‘Innovate Everyday’ was included in the program. The
following chapters explain the Innovate Everyday Cultural Change Project and apply the
concepts learned in this course [1].
2 DESIRED END STATE
In order to understand the Innovate Everyday Organization Culture project, a brief
summary of the organizational changes performed by Ericsson globally for ‘innovation at
the edge’ is explained.
2.1 Assessment of External Fit: New Strategy for New
Environment
The telecommunications industry had different characteristics in the last decade. There
were a few telecom operators (customers) in each market and a number of vendors. From
an organizational perspective, Ericsson in year 2000 was highly centralized where the
Business Units (organized by product categories) in Headquarters had full control of
product development, marketing and sales.
1
For more info on the Change Agent Program, please refer to the essay submitted by Selçuk Kavak for EMBA 2011.

4. Organizational Change & Innovation Culture in Ericsson Turkey
The market has been changing since then. The IT & Telecom industries converge,
meaning vendors specialized in one industry can address the other. The consumers (our
customer’s customer) are more empowered. They demand more services, applications.
They demand customization of the services and applications to the local tastes, shorter
time to market with less cost. The new market trends resulted in a larger number of
customers demanding diverse products. To adapt to the environment, Ericsson revisited
the strategy. As of last year, the new organization was divided into 10 regions. Each
region had authority on creating own strategy, solution portfolio, marketing and sales
activities.
From an innovation perspective, one challenge to adapt to the new environment was to
find out how Ericsson could address the needs of hundreds of customers (not necessarily
in the telecoms domain) with thousands of solutions, each adapted to the individual needs
of each customer. The solution is to spread innovation from the R&D organizations to all
parts of the organization and down to the edges: to the regions. The aim is to create an
environment that encourages all organizational units to contribute and then follow up on
ideas.
In fact in 2010, with the sponsorship of the Ericsson CEO, ‘innovation’ was included in the
company’s mission statement: Innovating to empower people, business, and society.
2.2 Assessment of Internal Fit: Organizational Changes for
Innovation
Innovaro –a consulting company with expertise in innovation- claims that common traits of
innovation leaders are: Strategic focus, insight, collaboration, process and organization
[2]. Below is a summary of the organizational changes performed for innovation.
Understanding the organizational changes gives us hints for setting the expectations on
our organizational culture change project.
Tasks: The major tasks related to innovation were developing new products, services and
business models (business innovation), continuously improving and simplifying processes
(process innovation), attracting skilled workforce to the company (talent innovation) and
increasing the brand value of Ericsson (brand innovation). The expectation from the
regions is to drive each innovation locally. The expectation from the global functions is to
synchronize regional activities and manage globalization of selected innovations.
People: The major expectations from the workforce is to come up with ideas for business,
process, talent or brand innovation regularly inline with the 2015 strategy. The expectation
for Ericsson Turkey is 5 ideas per employee per year on average2. The quality of the
ideas shall be evaluated by the comments/votes and the rate of implementation. The
employees are also expected to challenge status quo, try out new ways of working; don’t
be afraid of taking risks or making mistakes.
2
Source: Top Management. The Number of Ideas per Person is 0.1 before the start of the change project.

5. Organizational Change & Innovation Culture in Ericsson Turkey
Structure: In order to align innovation tasks with people, certain new organizational
structures are introduced in all regions. For instance, a global platform is introduced for
the collaborative idea management [3]. For each region, Idea Box Managers are
appointed for screening and follow-up of each idea. A new body called New Business
Development and Innovation (NBDI) for seed funding of selected ideas for execution is
introduced for each region. Senior management is included in NBDI council. A process for
managing idea submissions in a funnel is introduced (Idea Generation, Selection and
Funding). Virtual teams are created for review of submitted ideas.
Systems: The adaptation of the systems influencing innovation such as recruitment,
selection, training, performance appraisal or rewarding schemes are ongoing.
Culture: Our CEO would like to see Ericsson as a bold innovator that is consistently
delivering tremendous value to its customers, shareholders and employees. In our change
project, we aim to think globally and locally, and then act accordingly. That is, we shall find
a balance between the dominant innovation cultures of Ericsson global, and adapt to the
local culture if necessary.
3 ASSESSMENT OF READINESS FOR CHANGE
When we were assigned to be the Change Agents for the Innovate Everyday Cultural
Value, we performed a survey of the organizational change activities within Ericsson.
3.1 Gap Analysis Activities
During February, we analyzed the global audit results on innovativeness performed in
2010 for the Group Function Strategy and Marketing by an external company. The results
were based on the annual employee survey, which was extended to measure the
innovation perception and capabilities of employees.
During March and April, we performed a similar situation analysis for Ericsson Turkey.
If the innovation is observed as a market place of ideas, there are idea sellers (individual
employees), idea buyers (account management, client engagement, marketing
organizations) and the market regulators, who promote certain themes for ideation. We
interviewed all the stakeholders (around 20 employees from 8 different organization units
with different roles and seniority). We collected feedback on issues and their proposed
solutions. We further interviewed 20 people, who already submitted at least one
innovative idea to the innovation process.
Finally, we performed a survey on innovation and organization culture of IBM, IDEO,
Apple, Google and innocentive.com from Internet. We also studied the 8 Step Change
Management Process of John P. Kotter [4].

6. Organizational Change & Innovation Culture in Ericsson Turkey
3.2 Gap Analysis Results
Some of the negative findings for Ericsson Turkey are as follows:
 No common understanding of innovation (What kind of innovation?)
 Expectations of management on innovation not clear to employees (What is
expected from me?)
 No urgency (Why now?)
 No clear incentives for innovation
 Lack of resources for innovation (e.g. lack of time, lack of seed funding for
implementation).
 Assignment-driven culture stifles exploration, risk-taking
 Customer & user insights weak
 Supporting processes is on average are either not known, or is either complicated
or needs improvement
 Lack of execution of ideas
Some of the positive findings for Ericsson Turkey are as follows:
 High personal commitment of employees
 Top management support (Our wishes may have been rejected from other parts of
the organization, but the top management always supported our recommended
actions)
 Some organization units already possess the innovation culture traits (e.g. local
R&D, some Engagement Practice & Account Management organizations.)
4 ACTIVITIES TO INITIATE CHANGE, ADOPT
NEW BEHAVIORS & STABILIZE
After understanding the desired end state, and analyzing the as is situation, I came up
with an action plan to reach our goal of molding innovate everyday cultural value into our
DNA.

7. Organizational Change & Innovation Culture in Ericsson Turkey
4.1 Innovation Culture Change - Action Plan
The action points were organized into 3 groups. Actions we - as Innovate Everyday
Culture Change Agents - can do ourselves, actions we can coordinate with other
stakeholders, and actions which we have no control, but we can only recommend to
other stakeholders. We focused mainly on the ‘do’ and ‘coordinate’ activities.
4.2 Innovation Culture Change - Project Phases
To spread the desired ‘Innovate Every Day’ principle into the organizational culture, I
recommended a step by step approach3 .
3
Kotter’s 8 Step Model also suggests ‘Create Urgency’ as the first step of a change project. However, we had difficulty in
finding it, as there is no real crisis situation right now for Ericsson Turkey (e.g. low profitability, business decline etc.)

8. Organizational Change & Innovation Culture in Ericsson Turkey
4.3 Phase 1 - Accomplishments
The Phase 1 (Market Place Creation) has been executed during June and July. It includes creation of an internal
marketing campaign called ‘FİKİR VAR LİMİT YOK” (There’s Idea – There’s No Limit) which includes the following:
Activity Expected New
Behavior
Rationale Detailed Info
Communication with
Posters
Awareness on
innovation
expectations.
Consistent goals
and language.
Clear
communication is
critical to get buy-
in.
Common
vocabulary.

9. Organizational Change & Innovation Culture in Ericsson Turkey
Awareness Activities with
Creative Ads on LCD
Screens, and mini
Promotions (e.g.
invitation for a rock
concert).
Awareness on
innovation
expectations,
rewards and
recognitions,
short term
success cases.
Continuous
communication
through different
channels makes
innovation a hot
topic, reaches
more audience
(segmentation of
audience).
Creation of alternative
communication channels
in social media
(facebook, twitter)
Creation of a
coalition as
Kotter suggests
[4].
Reward the
active
contributors.
Promote them
toward peers
and managers.
Also provide a
trendy
communication
channel (mail or
Facebook
Innovation club
acts as a
recognition tool for
active contributors
(your idea
submission is seen
by your peers and
your managers)

10. Organizational Change & Innovation Culture in Ericsson Turkey
newsletter is not
sticky any more)
Innovation Awards Reward not only
implemented
ideas, but also
other
categories.
Instead of waiting
for the HR
organization to
update the reward
scheme, we gave
little awards to
several
contributors as this
is also sufficient
for many cases.
5 Awards given in All-Employee Meeting. The winners were announced
in different communication channels (Innovation Club, Intranet, LCD
Screens)
› Most Active Contributor
› Most Popular Idea
› Implemented Idea
› Most Innovative Collaboration
Innovation Day Show top
management
commitment
All employee
meeting is a huge
event (500+
employees meet in
a hotel for half a
day). Spending 45
minutes on
innovation
stresses the
importance.
› As part of the All Employee Meeting (~500+ Participants)
– A Customer CXO made a Keynote Speech on Innovation
– One of our colleague’s 8 yrs old daughter told an
Icebreaker Story on Creativity (Courage of a child to take
risks and give it a try)
– I gave a pitch on Innovation Change Agent Activities on
Innovate Everyday principle

11. Organizational Change & Innovation Culture in Ericsson Turkey
Innovation Assist Service Employees are
not
overwhelmed by
the processes.
Change agents
who are
Informal teams
can have more
credibility in the
eye of the
employees, as
they are not
‘selling’
concepts.
Change agents
may promote
certain activities
but demote
others.
Simplified idea
submission brings
more ideas.
Face to face
meetings is
effective in
communicating the
desired new
behaviors.
As part of this service, we go to department meetings to communicate
the expectations on Innovate Everyday principle. We have already
reached 100 employees in such meetings (~20 % of workforce).
Innovation Assist service is ready to answer questions such as:
› How can I contribute?
› Where do I find time and money?
› How can I submit my idea?
› Who can I discuss my ideas with?
› Where can I learn more about innovation?
› Where can I find tools, best practices and inspiration?
Innovation Index Report
of Organizational Units
KPI to measure
performance
Giving
organizational
units the means to
The submitted ideas were analyzed, and a report was presented, which
assists line managers to evaluate their innovation contribution.

12. Organizational Change & Innovation Culture in Ericsson Turkey
measure
themselves will
make it easier to
improve
themselves.

13. Organizational Change & Innovation Culture in Ericsson Turkey
4.4 Phase 1 - Results
After 5 months of active work, the positive effect of our activities is clearly observed. To
illustrate, there is a ~40 % increase in Idea Submissions after our Market Place Creation
Phase Launch 4 (e.g. Posters, Innovation Club in Facebook, Innovation Day Activities in
all Employee Meeting).
Almost 30 % of our workforce became voluntarily part of Innovation Club in Facebook.
4.5 Summary and Next Steps
The overall progress for the 2011 project is still far away from the desired state. We spent
5 months for the phase 1, and only 4 months are remaining for the 3 phases.
As of 23 June, the situation according to the Innovation Diffusion Curve [5] is as depicted
in the figure below. This is also due to the fact that the organizational culture change
needs a lot of time and energy, and the change agents are performing activities on
voluntary basis. Another reason is that, the other phases are more challenging to design
and implement compared to awareness creation activities.
Figure 1 - Innovation Diffusion Curve - Ericsson Turkey Status (23 June 2011)
Many challenges stay in front of us unsolved: Do we have good ideas? Do we have the
simple processes to harness them? Do we have the speed and courage to turn them into
meaningful change and new business?
4
Period: 27 May – 24 July

14. Organizational Change & Innovation Culture in Ericsson Turkey
The remaining activities for fostering Innovate Everyday Principle our organization culture
are as follows:
 More Transition Devices shall be used to support the Innovation Change Agents.
 The Knowledge, Skills and Abilities of employees on innovation shall be developed
with appropriate training. (In fact a training event called Innovation Campus is
being organized.)
 The resistance of employees who do not want to leave comfort zones shall be
overcome.
 As mentioned in the course, more Short Term Wins should be communicated to
employees.
 Success as well as responsible failure shall be celebrated (e.g. award the biggest
failure)
 Innovation Focus themes shall be announced to steer innovation activities
(business, process, talent and brand innovation).
 The face-to-face workshops shall be continued for the remaining parts of the
organization to keep momentum.
 The supporting systems influencing innovation such as recruitment, selection,
training, performance appraisal or rewarding schemes are still being developed.
We as the Innovation Change Agents shall monitor their progress and provide
bottom-up feedback to HR organization for the organizational design of these
systems.
5 References
[1] Lane, H.W., Maznevski, M.L., DiStefano, J, & Dietz, J. (2009), Managing Change
in Global Organizations. In International Management Behavior: Leading with a
Global Mindset (6th Ed), Oxford England, Wiley
[2] Innovaro Consulting, http://innovaro.com
[3] Everyone Innovates Everyday – Collaborative Idea Management at Ericsson, The
Management Exchange (McKinsey),
http://www.managementexchange.com/story/everyone-innovates-everyday-
collaborative-idea-management-ericsson
[4] Kotter, John P., Leading Change, Harvard Business Press
[5] Moore, Geoffrey A., Crossing the Chasm, Harper Business Essentials

15. Organizational Change & Innovation Culture in Ericsson Turkey
Disclaimer:
As this article contains confidential information, the company specific information provided
in the article shall not be disclosed to third parties without written consent from Ericsson
Turkey.