Brianna Wilson,
Editor,
Monitor

The equipment finance industry has been buzzing with conversation about artificial intelligence, automation tools and emerging technologies that can lead to real and innovative change. However, the industry seems stuck in the conversation of possibility; everyone is gasping in awe at what’s out there, but most companies either haven’t implemented it yet, or are not moving fast enough to catch up to the rest of the already-digitized world.

For this reason, Monitor is hosting Converge 2024 for companies that truly want to be innovative and disruptive to build the new and ever-evolving future of the industry. Monitor sought a keynote who could speak to the importance of disruption and innovation for legacy companies, which make up a majority of the industry. Peter Hinssen, an entrepreneur, keynote speaker and author, emerged as someone who could not only speak to and engage Converge’s audience, but also lead equipment finance leaders through a practical, application-based workshop on how to accomplish their innovation goals.

Hinssen will be discussing his recent book, “The Phoenix and the Unicorn,” which covers the what, why and how of corporate innovation. He plans to stir enthusiasm and excitement into the audience during the keynote and to use the following panel talk with industry leaders and all-day workshop with the audience to make it all happen.

PHOENIXES AND UNICORNS

Unicorns are rare. In Hinssen’s analogy of corporations, unicorns are the Airbnbs of the world — startup companies that just seem to get it, that can disrupt industries because they’re new, agile and adaptable. Unicorns can respond to sudden changes, answer to untapped markets and do so with little risk because they were created to thrive in a state of constant change.

Hinssen believes most companies will never be unicorns, but he holds firm that many companies can still learn from unicorns and their focus on innovative business models. What Hinssen emphasizes in his book and hopes to inspire in the Converge audience is how to become a phoenix instead. “Phoenixes are companies that have legacy, battle scars, history and have been around for a while, but are capable of reinventing themselves and maybe borrowing a few lines from the playbook of the unicorns,” Hinssen says. Ultimately, in Hinssen’s analogy, phoenixes will set themselves on fire to come out stronger, much like the mythical creature itself. “After a decade of unicorn applause, we have a decade of phoenix potential ahead of us — and I’m hoping to meet a lot of phoenixes at Converge.”

BECOMING A PHOENIX

Up to this point in his career, Hinssen has spent an equal amount of time in the startup space and in researching “slow-moving giants.” By training, Hinssen is an engineer, a technologist and a self-proclaimed nerd. He built three companies from the ground up and, with each one, addressed completely new markets in the startup world.

After 15 years of startups, though, Hinssen completely shifted his focus and began researching and writing books about the reinvention of traditional corporations. He began teaching at London Business School, became a fellow at MIT Sloan and had the chance to be very close to some phoenixes he began to study.

“One of the companies that I spent a lot of time with in the last six years is Walmart, the largest company in the world,” Hinssen says. “To see a company with a history of 70-plus years reinvent itself really gave me a lot of inspiration that phoenixes are not just real, but that is something that every company can do. If even the biggest company in the world can become a phoenix, I think any company can.”

DON’T LIGHT A MATCH YET

When it comes to setting yourself on fire, timing is essential. Equipment finance is an industry based primarily on relationships, and new technology isn’t always a necessity in that case. But these relationships will only work until they don’t, and there will come a time when relationships no longer cut it.

Hinssen’s advice on this topic revolves around timing. Starting too early and too aggressively with new technology is a waste of money; there’s no need to focus on digitizing things that don’t really need to be digitized, at least not right now. Waiting too long, however, is just as dangerous. That lands companies in an environment of new normals with little to no preparation.

“One of my favorite quotes is from Hemingway, the famous writer who went bankrupt,” Hinssen says. “When that happened, a journalist asked him, ‘How did you go bankrupt?’ and he said, ‘In two ways: gradually and then suddenly.’”

Hinssen has seen the same thing happen to companies time and time again. Disruption and change seem to happen overnight, and companies that aren’t prepared to pivot when necessary become endangered. “Don’t wait too long, and don’t shoot too early — you have to get your timing absolutely right,” Hinssen says.

WHEN DO WE MAKE OUR MOVE?

The time for equipment finance is coming soon. The industry is facing a huge wave of retirements while more and more young people enter the workforce. These younger people, including millennials and particularly Generation Z, grew up in a technological world. While the human and relationship aspect of the industry will always be important, it will not always be the primary source of business.

Take the pharmaceutical industry where this shift is actively happening. Plenty of pharmaceutical companies still have representatives that visit and speak with doctors every day. The digitization discussion has been happening for years, but the shift is happening hard and fast because more and more doctors that grew up in a digitized world are entering the workforce. Most younger generations don’t want to be on the phone and have face-to face meetings about topics that can easily be represented in an online portal. Their time is better spent elsewhere — with sick and injured patients, for example.

LEADERSHIP IS KEY

Unfortunately, becoming a phoenix is not as easy as adopting technology. “If there is just one critical element in making that workable, it’s leadership,” Hinssen says. An organization must truly understand the necessity to consider what’s happening in the world and how to respond in an agile way. In that equation, Hinssen says, leadership is the most important factor.

“That is kind of sobering, in the sense that you could dream of the perfect model or some framework that’s going to help you, but, in the end, it’s really about having people who are capable of guiding you through such rapid change,” Hinssen says.

He gives the example of Doug McMillon, CEO of Walmart. McMillon, Hinssen says, is a visionary leader who can understand how the retail world changes and then execute those changes for his company. An important aspect is not striking fear throughout the organization and instead laying down the foundation for the next reinvention of the company.

Leadership development is critical for an organization to reinvent itself as a phoenix. The traditional way leaders were nurtured in the past will no longer hold up. “An MBA is perfect preparation — for the last century,” Hinssen says. “We’re going to have to prepare leaders for the next challenges. We’re going to have to find new processes, skills, mindsets and mentalities to make that happen.”

That’s going to require leaders to be flexible, open-minded and comfortable in a constantly changing environment. Holding onto a plan or a long-term vision is a thing of the past, Hinssen says; leaders must to be able to sense, then adapt. That’s an entire skillset in and of itself and a mindset that leaders will have to learn and train.

Hinssen also doesn’t believe that this can necessarily be taught. “I would happily point you to a business school that can teach a style of leadership that emphasizes leading through uncertainty, but I don’t think that exists,” Hinssen says. “We’re going to have to figure this out as we go along.”

DON’T PANIC!

There is some tangibility in all of this. At Converge, Hinssen will discuss the ‘Hourglass Model of Innovation,’ which he describes as very simple. “We all know what the shape of an hourglass is. The top of the hourglass is the wide lens, where you pick up ‘the day after tomorrow.’ As you get to the middle of the hourglass, you reduce a lot of those ideas and transform and experiment to understand what is right for you.”

The bottom of the hourglass focuses on running and scaling, operational excellence and the bottom line. “It’s a very interesting model to evaluate how much energy, time, people and resources are in the top of the hourglass, where an organization looks at new things and experiments with them.”

The trickiest part of the model is aligning the top and bottom of the hourglass. Hinssen has observed companies with brilliant people who actively think about the day after tomorrow, but they’re stuck in “the ivory tower,” and they never make it to the bottom of the hourglass — running, scaling and figuring out what works best for the company. If both halves of the hourglass aren’t aligned, that’s an enormous amount of potential wasted.

THE DAY AFTER TOMORROW

For the most part, the equipment finance industry has grasped the ‘what’ of innovation, with the wave of interest in and discussions about artificial intelligence and automation tools. Where many of us seem to be stuck is the ‘how’ — how do we implement these tools, and how do we use the technology to drive innovation?

Candidly, Hinssen says, it’s not easy. “The world is moving faster. We see innovations coming to market and coming to fruition faster and in more disruptive ways than anything I have ever seen,” Hinssen says. What emerges in times of fast-paced change is an opportunity to be disciplined and involved in understanding what’s out there.

“I have this model, which I’ll certainly talk about at Converge, called ‘the Day After Tomorrow,’” Hinssen says. This model asks: How much time do you spend on today, tomorrow and the day after tomorrow? “The day after tomorrow are the new ideas, innovations, technologies and business innovations that could change the role of the game.”

Hinssen suggests organizations that spend most of their time on today or tomorrow are not being efficient; the day after tomorrow should be on their radar. “The next generation entering the workforce finds this really logical. When you look at AI, for example, college kids are using it every single day when they write or paper or have to produce something,” Hinssen says. “This generation is entering the workforce in a few years’ time — and imagine when they do, with the use of AI being normal for them. How is that going to affect the workforce?”

Hinssen emphasizes the importance of carving out that day after tomorrow discipline. Be involved, learn and challenge yourself. Being open-minded and curious is crucial. “That will be the best gift you can give yourself to stay relevant and keep up to date in this never normal roller coaster ride,” Hinssen says.

THE PAST IS STILL IMPORTANT

Through his company, nexxworks, Hinssen has had the opportunity to observe many trends in the innovative world. “There is so much doom and gloom already, so many people who are afraid of change,” Hinssen says. “At nexxworks, we’re trying not to just discard that, but to show them the positive elements of investing in innovation.”

Equally, there are plenty of companies Hinssen has worked with that are amazed at the possibilities to do new things, whether that’s product innovation, market innovation, service innovation, model innovation or other areas in which innovation can provide new ideas, concepts, revenue streams and opportunities.

He has found, though, that all these new and exciting paths of innovation require companies to really stop and think about the things they shouldn’t be doing. “I call it ‘Yesterwork,’” Hinssen says. “There’s only a limited amount of energy that you have at an organization, and you can keep adding new possibilities. At the same time, you have to think, ‘What are we going to stop doing?’ For many companies, yesterwork hunting is as important as focusing on that day after tomorrow.”

WHAT ABOUT TODAY?

It’s easy to get caught in day-to-day operations and feel like there’s not a second for innovation. Hinssen has very simple advice for people who get bogged down in the day-to-day: carve out time and be disciplined about it.

It happens to everyone; people get stuck in calls, emails and other ‘business as usual’ tasks that require time and energy. “Carving out the time is a matter of discipline. I’ve been doing that for a long time, and it has proven to be extremely effective,” Hinssen says. “The chances that, by 3:00 in the afternoon, you think, ‘You know what? I have no idea what I can still do. Now I’ll just do the day after tomorrow,’ is very, very slim. So if you don’t organize it for yourself, it will never happen.”

This discipline can happen at a company-wide level, too, and Hinssen highly advises organizations to carve out time for innovation in board meetings, within the management team and at all other levels of the organization. The day after tomorrow can be everyone’s priority.

LET’S GET TO WORK

Hinssen will discuss the frameworks outlined in “The Phoenix and the Unicorn” throughout his involvement in Converge 2024, including his keynote speech, participation in a leadership panel and the facilitation of Converge’s all-day innovation workshop. Converge will take place on May 15 – 16, 2024 in Philadelphia — don’t miss the opportunity to find out how to turn ‘business as usual’ upside down. •