Advancing the Power of Innovationweb.mit.edu/psgleadership/pdf/2009/Innovation One TGI... · 2009. 1. 18. · Advancing the Power of Innovation: Cultivating the Courage to Create,

Advancing the Power of Advancing the Power of InnovationInnovation::

Cultivating the Courage to Create, Adjusting Cultivating the Courage to Create, Adjusting YourYour Eyes to VisionEyes to Vision

Partha S. GhoshPartha S. Ghosh

Innovation SeriesInnovation Series

Fletcher School & Gordon InstituteFletcher School & Gordon Institute

Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 2

OLPC Story of Compassion, Courage,, & Creativity


Today:

1.1. Interesting Times ?: Interesting Times ?: The Obstacles The Obstacles & Opportunities beyond& Opportunities beyond

2.2. Innovation = Innovation = Game Changing MovesGame Changing Moves: : The Essential Requirements?The Essential Requirements?

3.3. Cultivating the State of Mind. Cultivating the State of Mind. Depth of Vision ?Depth of Vision ?


Tornados are dangerous how about three World scale Tornados at the same time?

(Turbulence)³

Tornado 1=Over engineering of Economic Undermining of ethics

Tornado 3=Imbalance of 3Es

Tornado 2=Clash of Perspectives


Changing Ecology

Finite Resources

Increasing Sea Level

65 Billion Tons of CO2

Rising Temperature

Increasing Population

Powerful Forces at Work?

Equity

Deforestation

Widening Gap


Changing Ecology

Finite Resources

Wall Street Expectations

Increasing Sea Level

65 Billion Tons of CO2

Rising Temperature

Increasing Population

Powerful Forces at Work: Clash of Perspectives?

Digitization requirements

Equity

Deforestation

CO2


0

20

40

60

80

100

120

140

0 5000 10000 15000 20000 25000 30000 35000 40000 45000GDP / Capita (US$)

Ene

rgy

Con

sum

ptio

n (‘0

00 K

WH

r / C

apita

)

Energy Consumption per Capita vs. GDP per Capita (2004)1

Most of the world is still in the early stage of Economic development

Ukraine

Russia

US

Kazakhstan Czech Republic

Malaysia

TurkeyBrazil

RomaniaThailandChina Egypt PhilippinesIndonesia

India

Italy

FranceGermany

UKJapan

Canada

80% of Global Population


Clearly we are at the End of a Long Era?Pr

oduc

tivity

of S

ocie

ty

Economic Development Curves

Industrial Revolution 1 (Steam Engine)

Industrial Revolution 2 (Internal Combustion

Engine)

Information Revolution

Low

High

Time

2005 ~2010


Holistic Approach?

Renewable and Clean Energy

SourceEnergy

Ecology Equity

Holistic Approach

Energy ,Food and Health for All

Sustainable Economic Developed

PROBLEMS ≈ OPPORTUNITIES


Last 5,000 Years… …..Future Possibilities..Economics of Economics of Linear Linear MechanicsMechanics:: Extraction, Extraction, Exploitation & ExperimentationExploitation & Experimentation

Economics of Economics of Closed Closed Loop HarmonyLoop Harmony

Knowledge for Knowledge for Recovery/RecycleRecovery/Recycle

New Technologies

AgroAgro

Energyand PowerClean Clean

WaterWater

Bio MassBio Mass Solar , Wind Solar , Wind Fuel CellsFuel Cells

BroadbandBroadband Clean EnergyClean Energy


Scope of the Field?

Point Solution

Industry’s Future (?): Two Strategic Vectors

Perspective?Holistic/Integrative Solution

Conservation driven

Consumption driven

Future of Science & Engineering

Balance?

Bal

ance

of E

colo

gy

Balance of Economic Advance


Scope of the Field?

Point Solution

Industry’s Future (?): Two Strategic Vectors

Perspective?Holistic/Integrative Solution

Conservation driven

Consumption driven

Balance?

Bal

ance

of E

colo

gy

Balance of Economic Advance

YunosMicro Finance

The Boston Pledge



Source: Technology Roadmap for the 21st Century Truck Program (DOE 2000), RMI analysis

Where a long-haul Class 8 truck’s diesel fuel goes ?

Focus: End of Chain [Fuel] → [Engine] → [Drivetrain] → [Tractive Loads]

0.02

1.00 0.070.93 0.56

0.02 0.030.30 0.19

0.11 0.050.06

• ~38% efficient today: Engine & drivetrain

• Represents >100 years’ R&D: Engine efficiency is more difficult to improve further than is end-use efficiency

End-use: Consider what would happen if we halved aerodynamic drag and mass

Total PrimaryEnergy

IdlingLosses

Used in Hauling

EngineLosses

Driver Losses*

AuxiliaryLoads

Drive trainLosses

Reachesthe Wheels

Aero-Dynamic

Drag RollingResistance

Moves thePlatform

Hauls the Freight


Today:

1.1. Interesting Times ?: Interesting Times ?: The Obstacles & The Obstacles & Opportunities beyondOpportunities beyond


3.3. Cultivating the State of Mind. Depth of Cultivating the State of Mind. Depth of Vision ?Vision ?


Entrepreneurship ≈ Creative Problem Solving

PROBLEMS ≈ OPPORTUNITIES

Innovation

Creative Problem Solving


Two fundamental Requirements Innovation Game Board

Scope ?

Low HighCourage to reconfigure

Normal

Abnormal

State of Consciousness Rules?


NewCurrent

The Fundamental Shift

Perspective

Rules & Laws of thoughts

Conventional

Marginal Innovations

Wid

e A

ng

le

Len

s

New

Courage


Innovation Game board:Likely Strategic Plays

Type BBreakthrough Values ?

Type D:Discovery of New Paths ?

Advances in Linear Innovation?/Harvesters

Type C Creative

Game Changers?

New“As is”

New

Generic

Risk Reward Options

CompetitiveRules

Innovation Framework

Perspective/ Consciousness

Type A


Innovation Game board:Likely Strategic Plays

Type BJapanese Electronics

Type D:Dell

Interface

Japanese Auto,

Type CBenetton

New“As is”

New

Generic

Risk Reward Options

CompetitiveRules

Innovation Framework

Perspective

Type A


When Conditions Change … (?).. Opportunities are created..

Current Set-Up Time for Press MachineFor Fenders

Toyota JapaneseCompany

US, Germany

Total Number of Models and Flexibility

ConventionalView:

Line Speed

5-6 Min. 10-15 Min.

1-2 Hours

Type B

Type A

Type D

Type c


U.S. Market

Supeheretodyne home radio

Portable radio

Portable radio

Transis-torradio

Low-costProduction in South-East Asia

Inspired products

Mature market KFSCost Edge

Japanese Market

4-tubehomeradio

Super-heterodynehome radio

Portable radio

Tran-sistorAMAM/FM

Radiocassette

Stereo radio

cassette

Ultra-thin radio"W

alkman"

with radio

Stereo-micro

cassette components

Radio-in-TVDigital clock-radioRadio-in-pocket calculatorEarphone radio

Product-Development History of Radio: US versus Japan Type B

Type A

Type D

Type c


Sequencing Game: Typical Distribution Channel for T-Shirts

Fiber

Current Distribution Channel

RetailStores

Yarn Fabric T-Shirts

•Carry Inventory for different sizes and Colors

Distributors

•Follow Trends

Retailers

•Personalized service•Immediate access to products

•Contacts with customers leads to innovation

•Product information•Order processing•Order tracking

.com

•Wide reach

Dye

Type B

Type A

Type D

Type c


Benetton: Creating More Value out of the Distribution Channel

Fiber

Current Distribution Channel

RetailStores

Yarn Fabric White T-Shirts

•Carry Inventory for different sizes only in white

Distributors

•Follow Trends

Retailers

•Personalized service

•Immediate access to products

•Contacts with customers leads to innovation

•Product information•Order processing•Order tracking

.com

•Wide reach

Dye

Dye

Type B

Type A

Type D

Type c

We specialize in:


Conventional Model Direct/Internet ModelFinancial Flow/Production Cycle Dollars

Additional Gross

Margin per Product

Financial Flow/Production Cycle Dollars

Process Simplification & Re-sequencing = Network Manufacturing: Capital Efficiency Advantage

Illustrative

Production Planning

Storage in

Channel

Components

Order Delivery

Shipment to

Channel

Product Purchase

Payment to the

Supplier

Gross Margin per Product

24-48 Hours

4 Days5 Days

Payment from the Customer

Time

35 days

Cycle-Financing

$ $

ComponentsOrder Placement Delivery

Shipment to

CustomerOrder

Production Planning

Type B

Type A

Type D

Type c


Even in conventional applications “solutions”possibilities in the Process Industry could be significant

Sell Paint

Sell Carpet

Sell Plastics

Sell Surface with multifunctional

capabilitiesType D

Sell CarpetingType D

Lease Functionalities

Type D

Solutions

1.

2.

3.

Product


Today:

1.1. Interesting Times ?: Interesting Times ?: The Obstacles & The Obstacles & Opportunities beyondOpportunities beyond


3.3. Cultivating the State of Mind. Depth of Cultivating the State of Mind. Depth of Vision ?: Nine ImperativesVision ?: Nine Imperatives


Four Quad Innovation Framework

As-is New

As is

Solutions

Scop

eSequence

Compelling VisionParadigm Shift capabilityInnovative alliancesAnalytical rigorBrand IntentIntelligence Band width

Superior leverage of the power of convergenceConnectivity with partnersEfficiency through knowledge edge

Key Factors of Success

Type B

Type A

Type D

Type c

Breakthrough

Innovators

Discovery

Pathfinders

Creative Harvesters

Scale & efficiency Operations management through convergenceWide understanding interpretation of IP laws

Wide angle view on SolutionsSuperior Pipeline management processNew Metrics for Pricing“Knowledge-edge”leadership


Mind-Set: Innovating Solution Space

Solution Space = Possibilities

Constraints= Opportunities

Problem

Imperative 1: Distance?

Mind

Eye


Clients /Users' Economics Life-Cycle Cost

50

55

Illustrative

Development Cost

Start-Up Cost

Running Cost

Maintenance Cost

Manufacturing Cost

OverheadPrice

60

10

20

10

100

60


Upstream Downstream

Biotechnology

Information Technology

10011000101110

Imperative 2: Leverage the latest

New technologies could fundamentally renew the Process industry – could indeed trigger a New Era full of possibilities

NanoTechnologies

Opto Technologies


BIO TECH LIFE CYCLE

Embryonic Emerging

Bio steel

Special Bio materials

Electronic ChemicalsMembrane materials

Bio Polymers

Enhancement of cell properties

Biomimicry

Improved yields

Use of Natural Fibers Water management

Waste Management

Agro chemicals

Food Additives

Bio catalyst (enzymes)

Bio coatings

Commercial

Impact

Stages of Development

Example: Cross Migrate Ideas


Degree of Maturity

Innovation through rule

breaking

Innovation through improved value capture

Zone of Process Driven Innovative

Start-ups

Imperative 3: Know thy selfValue/Cost relationship

per Unit

Zone of Product Driven Innovative Start-ups


Today Opportunities present themselves at the speed of thought.

Value Capture

Resource Commitment

Challenges of Investing in A Technology

• Acceleration of Momentum of Technology development?

• Value of Acceleration?

• Cost of Acceleration ?

Imperative 4: Know your relative position?


Opportunities will present themselves at the speed of thought.

Value Capture

Resource Commitment

Challenges of Betting

Sharp Ride Up-hill or Flat ride?

Thermodynamic Limit ? (T2 –T1)/T1

Technological Limit

Process Inefficiency ?

• Acceleration of Momentum of Technology development?

• Value of Acceleration?

• Cost of Acceleration ?

Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 36* Value: Integrated Market and Technological Value

Resource Commitment

Value* / $ R&D

Investment

Type A2

Error Pessimism

B

CType A1

Five Critical Points

Error of Optimism

D

Potentially superior but unknown

New Technology based on new Enzyme

Multiple Situations

Imperative 5: Understand the dynamics between technologies


Imperative 6: Be open to unknowns?

Resource Commitment

EconomicImpact Helping Future leaders

navigate Paradigm Shifts

“ Promising but Un-predictable”

Strategic WindowDisengagement at the

Peak of success

Management of Early stage

Business Models in a Large Enterprises

“ Longevity? but predictable”


Portfolio Evaluation

Chance to realize value Or Chance to win(Competitiveness)• Relative position of technology vis other competing technologies?• Relative Capacity to Commercialize?

Relative attractiveness

• How far you could advance technology?

• What will the value of advancement?

L

L

M

H

M H

ILLUSTRATIVE

E

F

D

G

A

C

B

Imperative 7: Have fall back options


Imperative 8: Stretch Mind to meet Necessary & Sufficient Conditions

Quick and simple

preparation

Manufacturer's objective function

Increase sales of

microwave oven

User's objective function

Creative new products with

high probability of

success

CompetitiveSurvey

=

Expand Market

Increaseshare

Tastycooking

(Necessary and Sufficient Conditions)

User's & Manufacturer's Objective Function


Opportunities will present themselves at the speed of thought.

Value Capture

KnowledgeIntensity

Take of Challenges

9 Acceleration of Momentum

•Resynthesis of Hard and Soft Assets•Conceptualization of New Business Models

Imperative 9: Manage the Mile Stones for each S-Curve


Connecting the dots visible with the ones invisibleAbility to view along multiple dimensions (mutually exclusive)

Documents

Advancing the Power of Innovationweb.mit.edu/psgleadership/pdf/2009/Innovation One TGI... · 2009. 1. 18. · Advancing the Power of Innovation: Cultivating the Courage to Create,