Advancing the Power of Innovationweb.mit.edu/psgleadership/pdf/2009/Innovation One TGI... · 2009....
Transcript of Advancing the Power of Innovationweb.mit.edu/psgleadership/pdf/2009/Innovation One TGI... · 2009....
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 3
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 ?
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 4
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 5
Changing Ecology
Finite Resources
Increasing Sea Level
65 Billion Tons of CO2
Rising Temperature
Increasing Population
Powerful Forces at Work?
Equity
Deforestation
Widening Gap
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 6
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 7
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 8
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 9
Holistic Approach?
Renewable and Clean Energy
SourceEnergy
Ecology Equity
Holistic Approach
Energy ,Food and Health for All
Sustainable Economic Developed
PROBLEMS ≈ OPPORTUNITIES
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 10
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 11
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 12
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 13
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 14
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 15
Today:
1.1. Interesting Times ?: Interesting Times ?: The Obstacles & The Obstacles & Opportunities beyondOpportunities beyond
2.2. Innovation = Innovation = Game Changing MovesGame Changing Moves: : The Essential Requirements?The Essential Requirements?
3.3. Cultivating the State of Mind. Depth of Cultivating the State of Mind. Depth of Vision ?Vision ?
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 16
Entrepreneurship ≈ Creative Problem Solving
PROBLEMS ≈ OPPORTUNITIES
Innovation
Creative Problem Solving
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 17
Two fundamental Requirements Innovation Game Board
Scope ?
Low HighCourage to reconfigure
Normal
Abnormal
State of Consciousness Rules?
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 18
NewCurrent
The Fundamental Shift
Perspective
Rules & Laws of thoughts
Conventional
Marginal Innovations
Wid
e A
ng
le
Len
s
New
Courage
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 19
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 20
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 21
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 22
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 23
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 24
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:
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 25
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 26
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 27
Today:
1.1. Interesting Times ?: Interesting Times ?: The Obstacles & The Obstacles & Opportunities beyondOpportunities beyond
2.2. Innovation = Innovation = Game Changing MovesGame Changing Moves: : The Essential Requirements?The Essential Requirements?
3.3. Cultivating the State of Mind. Depth of Cultivating the State of Mind. Depth of Vision ?: Nine ImperativesVision ?: Nine Imperatives
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 28
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 29
Mind-Set: Innovating Solution Space
Solution Space = Possibilities
Constraints= Opportunities
Problem
Imperative 1: Distance?
Mind
Eye
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 30
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 31
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 32
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 33
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 34
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?
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 35
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 37
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”
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 38
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 39
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 40
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
Copyright © 2008 Partha S Ghosh. — ConfidentialTGI Fletcher Innovation 2008 41
Connecting the dots visible with the ones invisibleAbility to view along multiple dimensions (mutually exclusive)