Innovation Topology Presentation Rev D

Jeffry Forsythe1 & Ron Khormaei2© PICMET 2011 www.picmet.org1 Innovation Lifecycle Management Consultant2 General Manager Lensbaby; Adjunct Professor, PSU ETM1

http://www.picmet.org/

Premise and Introduction

Innovation Vector Development

Global Innovation Map (GIP)

GIP usage through Examples

Summary

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Provide a common framework to guide the choices companies need to make for successful innovation: Systematically learn from prior relevant “Work of Innovation” to … Facilitate broad organizational understanding and participation in

decisions that provides a … Template for current Innovation work as well as an … Organizational mindset focused on innovation across the value

chain.

Innovation is the creation and application of new knowledge that results in products, solutions or services that sustainably meet real human needs.

The ‘Work of Innovation’ consists of actions, behaviors, and decisions which individual and organizational market players take to address the forces of ‘Natural Selection’ where:

Winners deliver solutions that are marginally superior in meeting the real human needs of constituents (customers, employees, owners, partners across the value chain, and societies).

Outcomes are sustainable to the degree they improve the productivity as well as the financial, intellectual, social and environmental wealth/capital of constituents according to broadly shared expectations.

Successful innovation within a market accelerates movement along the ‘Dimensions of Innovation’ and therefore drives the process of ‘Natural Selection’ acting on the ‘Work of Innovation’ of market participants.

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In “Crossing the Chasm” Geoffrey Moore characterizes the Technology Adoption Life Cycle from inception to maturity where in some markets incremental innovation within an established value chain leads and in other markets discontinuous innovations remake the market with new paradigms, new value chains and new leaders. In this example Market Maturation is a ‘Dimension’ along which to identify and describe the relevant characteristics of markets.

Global Innovation Map (GIM) provides a comprehensive framework that places the work of innovation on a “map” of the various dimensions of innovation.

Innovation Vectors are paths on the GIM for a specific program that places its strategies, plans and its delivery in the context of the market dimensions for that program.

Innovation Vectors can be optimized using the GIM for a specific program along its particular dimensions to direct the creation and delivery lifecycle that is Innovation.

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IF … we can identify specific dimensions that drive innovation and understand the way they work with respect to each other by:

Making a ‘Global Innovation Map’ or GIM to orient the dimensions and describe their characteristics and interdependences across their meaningful range.

Charting past relevant innovation development and delivery paths through the GIM and thereby identifying past successful or at least teachable innovation vectors.

THEN … mapping the Innovation Topology yields a systematic method of evaluating competing strategies and tactics in optimizing the work of innovation along the various vectors of prior relevant work.

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What Constituents Value

Competitors Capabilities / Outputs

Your Capabilities / Outputs

Your Market / Pricing Power

Open Field of Unmet Constituent Values

Your Overhead / WasteCompetitors Overhead / Waste

Your Innovation Vector

Competitors Market or Pricing Power

Copyright Jeff Forsythe 2010

Δ Value

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Start Up MatureGrowth

Marketplace

Industries

Companies

Products

Create

Develop

Manage

EOL

Market’s

Drive

to M

arke

t

Sc

ale

Maturity

Copyright Jeff Forsythe 2005

Copyright Jeff Forsythe 2005 9


Visionary, Savvy Influential Customers, Chaotic /Turbulent, Unmet Needs. Significant New Performance = Market Power

Marketplace

Industries

Companies

Products

MaturityS

cale

Mainstream, Dynamic Growth. Ease of adoption + Safe Bet + Volume Responsiveness = Market Power

Global Brands to Publicly Chartered Monopolies, Ordered /Efficient /Ultra High Volume /Low Margin. X-license

Society Vested /Industry Regulated, Few Dominate Global Companies /Consolidation’s

New Capabilities, Vague Product Boundaries, Incomplete Value Chain

Better Functions, Dominate Design Emerges, Products Become Platforms, Whole Product

Simple to Use, Invisible, Commodities Platforms Become Systems /Networks

Small /Fast, Many Fail, Teams Rapidly Form /Disband, Individual Heroics, Customer Intimacy, Acquisition Target

Spec Wars-Standards, Growing Supply Chain Capabilities /Economic Power

Venture Capital, Few Capable Partners /Suppliers, Uncertain Business Models

Grow Market Share, Hiring /Expanding /Connecting Teams, Organizational IQ

Creative Spark /Discontinuous Invention

Launch & Learn, quick investment return, high unit cost

Lead Customer’s Involved,Driving New Performance Enhancements, Integration

Unplanned /Rapid Obsolescence

Integrated into Society. Efficient /Reliable /Available /Beneficial /±1 Differentiation = Market Power

Creative Spark /Adoption Feasibility

Develop & Demonstrate Scale Competitive Performance

Customers become Groups, Production Volume Responsiveness

Chaotic Product Obsolescence, Planned Platform Rolls, re-Branding

Creative Spark /Integration Feasibility

Validate / Integrate; Strict processes

Customers are Reliant /CapturedProducts are Efficient /Stable /Responsible /Available

Planned Generation Obsolescence: System, Network, Standard

Market’s

Rules are Cultural /Implicit /Informal /Uncertain, shared w/ Non-Profits, Government

Rules are Political /Explicit /Formal /Organized, shared w/ Government

Rules are Transitional /Volatile /Playing Catch Up to Realities

For-Profit Companies /Industries

Create

Develop

Manage

EOL

Drive

to M

arke

t

1. Refine the GIM to reflect the realities of your environment

2. Locate your Innovation Vectors in the GIM; past, present, future

3. Identify Capabilities, Allocate Resources, Identify Gaps

4. Build & Execute Development /Delivery Plan (e.g. phase gate process)

▪ Research

▪ Develop /Spec /Validate

▪ Scale

▪ Commercialize

▪ Obsolesce

5. Learn /Institutionalize

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Marketplace

Public University Research, State of Virginia Incubator, social and intellectual capital motivated by ideals of building social wealth.

Market

Customers characterized as High Quadriplegics; underserved, disconnected, eager to use /adapt, /co-develop, needy, small economic scale /opportunity.

Industry

Essentially non-existent, everything borrowed from other industries. Technology came from research at Carnegie Mellon and U Virginia, Virginia State incubation program promoting the commercialization of scientific breakthroughs.

Company

LC Technologies was just two highly talented guys determined to fulfill a real human need. Non-standard business plan risking their own capital, largely pay as you go, eventually an “Angel Investor”.

Product

Launch and learn, hand built one-off’s. Build to order parts purchased retail (think Radio Shack) or made at local machine shop and hand assembled.

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“Eye-Gaze”Start-Up Company in a Start-Up Environment


Start-Up MatureGrowth


Marketplace

Industries

Companies

Products

MaturityS

cale







Small /Fast, Many Fail, Teams Rapidly Form /Disband, Customer Intimacy, Acquisition Target

Spec Wars-Standards, Growing Supply Chain Capabilities /Power


Grow Market Share, Hiring /Expanding /Connecting Teams



Lead Customer’s Involved,Driving New Performance Enhancements









Customers are Reliant /CapturedEfficient /Stable /Responsible Delivery


Market’s




Create

Develop

Manage

EOL

Drive

to M

arke

t

Marketplace

Public Utility Monopoly, system failure would be a national emergency, expensive local services subsidized by efficient long distance services were governmentally imposed against growing “free market” political forces.

Market

Essentially 100% penetration, fully integrated into society, essential service.

Industry

Mature, deep pockets, fundamental research, highly complex leading edge science, ultra high volume /reliability.

Company

CTDI was just a couple highly talented guys determined to serve a real business need. Non-standard business plan, personal savings and largely pay as you go, became a strategic supplier enabling organic growth.

Products

Launch and learn, dependent on developing diagnostic tools and hiring and developing technicians. Repair service and logistics built on turn around /tracking /reliability /cost.

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“CTDI”Start-Up Company in a Mature Industry / Market / Marketplace




Marketplace

Industries

Companies

Products

MaturityS

cale







Small /Fast, Many Fail, Teams Rapidly Form /Disband, Customer Intimacy, Acquisition Target

Spec Wars-Standards, Growing Supply Chain Capabilities /Power


Grow Market Share, Hiring /Expanding /Connecting Teams



Lead Customer’s Involved,Driving New Performance Enhancements









Customers are Reliant /CapturedEfficient /Stable /Responsible Delivery


Market’s




Create

Develop

Manage

EOL

Drive

to M

arke

t

“CTDI”Start-Up Company in a Mature Industry / Market / Marketplace

Innovation vectors provide the rigorous logic /rationale from which any specific innovation life-cycle can be conceived, planned, developed, and delivered by understanding: The dimensions of innovation and their characteristics at all relevant locations on the

GIM.

Past or different innovation lifecycles by differentiating for their path specific vectors within the shared dimensions.

GIM provides the frame work for: Setting location-appropriate strategies in allocating resources setting priorities and

expectations.

Defining location-appropriate tactics by defining roles /responsibilities, scheduling decisions /deliverables to align /direct and coordinate resources.

Providing top to bottom location-appropriate transparency /rationale /accountability in communicating /tracking decisions and progress.

Achieving deep expertise and formal explicit knowledge regarding the location-appropriate optimization of the work of innovation.

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TECHNOLOGY MANAGEMENTChristensen, Clayton M; THE INNOVATOR’S DELEMMA. HarperCollins, 1997Christensen, Clayton M and Raynor, Michael E; THE INNOVATOR’S SOLUTION Harvard Business School Press, 2003Humphrey, Watts S; MANAGING FOR INNOVATION Prentice-Hall, 1987More, Geoffrey; CROSSING THE Harper Business, 2005More, Geoffrey; DEALING WITH Penguin, 2005James, Geoffrey; BUSINESS WISDOM OF THE ELECTRONIC ELITE Random House, 1996Wiefels, Paul; THE CHASM COMPANION HarperBusiness, 2002Womac, James P, Jones, Daniel T, Roos, Daniel; THE MACHINE THAT CHANGED THE WORLD Harper Perennial, 1990 BUSINESS MANAGEMENTCrawford, Fred and Mathews, Ryan; THE MYTH OF EXCELLENCE Random House, 2001Crosby, Philip B; QUALITY IS FREE The art of making Quality Certain. McGraw-Hill, 1979Drucker, Peter F; THE FRONTIERS OF MANAGEMENT Harper & Row, 1986Drucker, Peter F; THE EFFECTIVE EXECUTIVE Pan Books, 1970Drucker, Peter F; CONCEPT OF THE CORPORATION Harper & Row, 1946Foster, Richard N; INNOVATION, THE ATTACKER’S ADVANTAGE Summit Books, 1986Kouzes, James M and Posner, Barry Z; THE LEADERSHIP CHALLENGE Jossey-Bass Publishers, 1995Langdon, Michael J; WHERE LEADERSHIP BEGINS Quality Press, 1993Nonaka, Ikujiro and Takeuchi, Hirotaka; THE KNOWLEDGE-CREATING COMPANY Oxford University Press, 1995Packard, David; THE HP WAY HarperCollins, 1995Peters, Tom and Austin, Nancy; A PASSION FOR EXCELLENCE Random House, 1985Pine, Joseph B; MASS CUSTOMIZATION Harvard Business School Press, 1993Senge, Peter M; THE FIFTH DICIPLINE Doubleday Currency, 1990Shapiro, Carl and Varian, Hal R; INFORMATION RULES Harvard Business School Press, 1999Ulrich, Karl T and Eppinger, Steven D; PRODUCT DESIGN AND DEVELOPMENT McGraw-Hill, 2nd edition, 2000

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SOCIAL SYSTEMS & MARKETSBogle, John C; DON’T COUNT ON IT! John Wiley, 2011Ferguson, Niall; THE ASSENT OF MONEY Penguin Books, 2008Forrester, Jay W; WORLD DYNAMICS Wright-Allen Press, 1971Forrester, Jay W; URBAN DYNAMICS MIT Press, 1969Fox, Justin; THE MYTH OF THE RATIONAL MARKET A history of risk, reward, and delusion on Wall Street. HarperCollins, 2009Hall, Edward T: THE HIDDEN DIMENSION Anchor Books, 1966Hall, Edward T: THE SILENT LANGUAGE Anchor Books, 1973Hall, Edward T: BEYOND CULTURE Anchor Books, 1976Mandelbrot, Benoit and Hudson, Richard; THE (MIS)BEHAVIOR OF MARKETS Basic Books, 2004Reich, Robert B; AFTER SHOCK Alfred A Knoph, 2010Reich, Robert B; THE NEXT AMERICAN FROUNTIER Times Books, 1983Taleb, Nassim N; FOOLED BY RANDOMNESS Random House, 2004Taleb, Nassim N; THE BLACK SWAN Random House, 2007

ENGINEERING / TECHNOLOGYDeming, Edwards W; QUALITY, PRODUCTIVITY, AND COMPETITIVE POSITION MIT Center for Advanced Engineering Study, 1982AT&T STATISTICAL QUALITY CONTROL HANDBOOK A working handbook by Western Electric people for Western Electric use. 11th printing, 1985Deming, Edwards W; QUALITY, PRODUCTIVITY, AND COMPETITIVE POSITION MIT Center for Advanced Engineering Study, 1982Fowlkes, William Y and Creveling, Clyde M; ENGINEERING METHODS FOR ROBUST PRODUCT DESIGN Addison-Wesley, 1995Grant, Eugene L and Leavenworth, Richard S; STATISTICAL QUALITY CONTROL McGraw Hill, 1964, 5th edition 1980Neave, Henry R; THE DEMING DIMENSION SPC Press, 1990Phadke, Madhav S; QUALITY ENGINEERING USING ROBUST DESIGN Prentice Hall, 1989Wheeler, Donald J and Chambers, David S; UNDERSTANDING STATISTICAL PROCES CONTROL SPC Press, 1992Wheeler, Donald J; UNDERSTANDING VARIATION SPC Press, 1993

SCIENCEDawkins, Richard; THE EXTENDED PHENOTYPE Oxford University Press, 1982Dawkins, Richard; THE SELFISH GENE Oxford University Press, 1989Dawkins, Richard; THE ANCESTOR’S TALE Mariner Books, 2005Cecco, John C; THE PSYCHOLOGY OF LEARNING AND INSTRUCTION: EDUCATIONAL PSYCHOLOGY Prentice-Hall, 1968Hoel, Paul G; INTRODUCTION TO MATHEMATICAL STATISTICS 4th edition John Wiley & Sons, 1971

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