7. What Constituents Value Competitors Capabilities / Outputs Your Capabilities / Outputs Your Market / Pricing Power Open Field of Unmet Constituent Values Your Overhead / Waste Competitors Overhead / Waste Your Innovation Vector Competitors Market or Pricing Power Copyright Jeff Forsythe 2010 Δ Value
8. Start Up Mature Growth Marketplace Industries Companies Products Create Develop Manage EOL Market’s Drive to Market Scale Maturity Copyright Jeff Forsythe 2005
9. Copyright Jeff Forsythe 2005 Start Up Mature Growth Visionary, Savvy Influential Customers, Chaotic /Turbulent, Unmet Needs. Significant New Performance = Market Power Marketplace Industries Companies Products Maturity Scale 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 /Captured Products 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 Market
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13. Copyright Jeff Forsythe 2005 Start-Up Mature Growth Visionary, Savvy Influential Customers, Chaotic /Turbulent, Unmet Needs. Significant New Performance = Market Power Marketplace Industries Companies Products Maturity Scale 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, Customer Intimacy, Acquisition Target Spec Wars-Standards, Growing Supply Chain Capabilities /Power Venture Capital, Few Capable Partners /Suppliers, Uncertain Business Models Grow Market Share, Hiring /Expanding /Connecting Teams Creative Spark /Discontinuous Invention Launch & Learn, quick investment return, high unit cost Lead Customer’s Involved, Driving New Performance Enhancements 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 /Captured Efficient /Stable /Responsible Delivery 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 Create Develop Manage EOL Drive to Market
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16. Copyright Jeff Forsythe 2005 Start Up Mature Growth Visionary, Savvy Influential Customers, Chaotic /Turbulent, Unmet Needs. Significant New Performance = Market Power Marketplace Industries Companies Products Maturity Scale 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, Customer Intimacy, Acquisition Target Spec Wars-Standards, Growing Supply Chain Capabilities /Power Venture Capital, Few Capable Partners /Suppliers, Uncertain Business Models Grow Market Share, Hiring /Expanding /Connecting Teams Creative Spark /Discontinuous Invention Launch & Learn, quick investment return, high unit cost Lead Customer’s Involved, Driving New Performance Enhancements 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 /Captured Efficient /Stable /Responsible Delivery 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 Create Develop Manage EOL Drive to Market “ CTDI” Start-Up Company in a Mature Industry / Market / Marketplace
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18. TECHNOLOGY MANAGEMENT Christensen, Clayton M; THE INNOVATOR’S DELEMMA . HarperCollins, 1997 Christensen, Clayton M and Raynor, Michael E; THE INNOVATOR’S SOLUTION Harvard Business School Press, 2003 Humphrey, Watts S; MANAGING FOR INNOVATION Prentice-Hall, 1987 More, Geoffrey; CROSSING THE Harper Business, 2005 More, Geoffrey; DEALING WITH Penguin, 2005 James, Geoffrey; BUSINESS WISDOM OF THE ELECTRONIC ELITE Random House, 1996 Wiefels, Paul; THE CHASM COMPANION HarperBusiness, 2002 Womac, James P, Jones, Daniel T, Roos, Daniel; THE MACHINE THAT CHANGED THE WORLD Harper Perennial, 1990 BUSINESS MANAGEMENT Crawford, Fred and Mathews, Ryan; THE MYTH OF EXCELLENCE Random House, 2001 Crosby, Philip B; QUALITY IS FREE The art of making Quality Certain. McGraw-Hill, 1979 Drucker, Peter F; THE FRONTIERS OF MANAGEMENT Harper & Row, 1986 Drucker, Peter F; THE EFFECTIVE EXECUTIVE Pan Books, 1970 Drucker, Peter F; CONCEPT OF THE CORPORATION Harper & Row, 1946 Foster, Richard N; INNOVATION, THE ATTACKER’S ADVANTAGE Summit Books, 1986 Kouzes, James M and Posner, Barry Z; THE LEADERSHIP CHALLENGE Jossey-Bass Publishers, 1995 Langdon, Michael J; WHERE LEADERSHIP BEGINS Quality Press, 1993 Nonaka, Ikujiro and Takeuchi, Hirotaka; THE KNOWLEDGE-CREATING COMPANY Oxford University Press, 1995 Packard, David; THE HP WAY HarperCollins, 1995 Peters, Tom and Austin, Nancy; A PASSION FOR EXCELLENCE Random House, 1985 Pine, Joseph B; MASS CUSTOMIZATION Harvard Business School Press, 1993 Senge, Peter M; THE FIFTH DICIPLINE Doubleday Currency, 1990 Shapiro, Carl and Varian, Hal R; INFORMATION RULES Harvard Business School Press, 1999 Ulrich, Karl T and Eppinger, Steven D; PRODUCT DESIGN AND DEVELOPMENT McGraw-Hill, 2 nd edition, 2000
19. SOCIAL SYSTEMS & MARKETS Bogle, John C; DON’T COUNT ON IT! John Wiley, 2011 Ferguson, Niall; THE ASSENT OF MONEY Penguin Books, 2008 Forrester, Jay W; WORLD DYNAMICS Wright-Allen Press, 1971 Forrester, Jay W; URBAN DYNAMICS MIT Press, 1969 Fox, Justin; THE MYTH OF THE RATIONAL MARKET A history of risk, reward, and delusion on Wall Street. HarperCollins, 2009 Hall, Edward T: THE HIDDEN DIMENSION Anchor Books, 1966 Hall, Edward T: THE SILENT LANGUAGE Anchor Books, 1973 Hall, Edward T: BEYOND CULTURE Anchor Books, 1976 Mandelbrot, Benoit and Hudson, Richard; THE (MIS)BEHAVIOR OF MARKETS Basic Books, 2004 Reich, Robert B; AFTER SHOCK Alfred A Knoph, 2010 Reich, Robert B; THE NEXT AMERICAN FROUNTIER Times Books, 1983 Taleb, Nassim N; FOOLED BY RANDOMNESS Random House, 2004 Taleb, Nassim N; THE BLACK SWAN Random House, 2007 ENGINEERING / TECHNOLOGY Deming, Edwards W; QUALITY, PRODUCTIVITY, AND COMPETITIVE POSITION MIT Center for Advanced Engineering Study, 1982 AT&T STATISTICAL QUALITY CONTROL HANDBOOK A working handbook by Western Electric people for Western Electric use. 11 th printing, 1985 Deming, Edwards W; QUALITY, PRODUCTIVITY, AND COMPETITIVE POSITION MIT Center for Advanced Engineering Study, 1982 Fowlkes, William Y and Creveling, Clyde M; ENGINEERING METHODS FOR ROBUST PRODUCT DESIGN Addison-Wesley, 1995 Grant, Eugene L and Leavenworth, Richard S; STATISTICAL QUALITY CONTROL McGraw Hill, 1964, 5 th edition 1980 Neave, Henry R; THE DEMING DIMENSION SPC Press, 1990 Phadke, Madhav S; QUALITY ENGINEERING USING ROBUST DESIGN Prentice Hall, 1989 Wheeler, Donald J and Chambers, David S; UNDERSTANDING STATISTICAL PROCES CONTROL SPC Press, 1992 Wheeler, Donald J; UNDERSTANDING VARIATION SPC Press, 1993 SCIENCE Dawkins, Richard; THE EXTENDED PHENOTYPE Oxford University Press, 1982 Dawkins, Richard; THE SELFISH GENE Oxford University Press, 1989 Dawkins, Richard; THE ANCESTOR’S TALE Mariner Books, 2005 Cecco, John C; THE PSYCHOLOGY OF LEARNING AND INSTRUCTION: EDUCATIONAL PSYCHOLOGY Prentice-Hall, 1968 Hoel, Paul G; INTRODUCTION TO MATHEMATICAL STATISTICS 4 th edition John Wiley & Sons, 1971
Notas del editor
My title “Innovation Topology” borrows from the concept of a topology map that describes physical features with respect to location. Where as the familiar topology map shows lines of constant elevation in addition to physical features like rivers and roads on coordinates of Latitude and Longitude; an innovation topology map must establish the mapping coordinates or dimensions as well as describe the characteristics at specific coordinates. Just as a map serves to plan, execute and record a journey through a particular place, an innovation topology map serves to plan, execute and record a journey of doing innovation. First I will define the terms I use such as innovation , dimensions , vectors and the concept of a Global Innovation Map . I will then develop the mapping concept and provide examples.
[Read the slide and go to the next slide, read the first bullet and then read this Model of Learning, eg. Creating New Knowledge] In their book The Knowledge Creating Company Nonaka and Takeuchi utilize two dimensions of knowledge creation, ontological (individual to group) and epistemological (implicit internal to explicit external) to argue that knowledge creation requires a spiral of implicit learning (internalizing and socializing) and explicit learning (externalizing and combining) taken at the individual level but within a group or ontological context. The ontological dimension provides intention, autonomy, fluctuation, redundancy, and requisite variety. I share this model and here present a systematic tool for innovators to create new knowledge that results in product that meet real human needs. A tool to learn, communicate and participate, plan and execute the work of innovation from cradle to grave, from idea to commercialization to obsolescence.
Sustainable Innovation is the creation and application of new knowledge that results in products, solutions or services that meet the real human needs of all constituents according to broadly shared expectations. The “Work of Innovation” encompasses the actions, behaviors and decisions of innovators at work. Natural Selection in biological systems is the process whereby the unit of selection, the gene which is also thought of as the copy agent both competes and cooperates within an environment for representation in the gene pool. Natural Selection within human markets is a similar process in that new knowledge sometimes thought of as “memes”, compete and cooperate within human markets with marginal advantages for assimilation. Whereas genes are selected by building individuals with marginal advantages within their environment, memes are themselves adaptive to changes and the evolution within human markets differs in this regard from biological evolution. In human markets as in biology, the units of selection are the ideas that work (like the genes they provide marginal advantages to themselves), not individuals, not products or services, not corporations. Innovation memes are selected for their ability to cooperate as well as compete in their environment to improve beneficial human productivity and therefore the financial, intellectual, social & environmental wealth or capital according to the broadly shared expectations of constituents.
Innovation Dimensions are the coordinates describing ones location with respect to the intellectual, environmental, social and financial capital markets in which the work of innovation takes place. This is similar to imaginary constructs of latitude, longitude, elevation. Before these imaginary constructs we navigated by following specific physical features, the attributes of particular locations. With these dimensional constructs maps became mathematical which was essential to the development of a scientific understanding of the world. Geoffrey Moore in his book Crossing the Chasm describes the Technology Adoption Life Cycle through Early Market, Bowling Alley, Tornado and to Mainstream. There are other innovation dimensions and the GIM is a tool to locate market characteristics with respect to these market dimensions . Innovation vectors describe pathways through markets where different approaches are taken at different locations. An example: In 2005 in a “Coffee Talk” HP’s then CEO Mark Hurd suggested that the Inkjet Product Group’s R&D budget was about the same as Apple’s so why did they not deliver an I-Pod?! This is like saying I followed a river of the same size so why did I not get to the same harbor? Innovation is multi-dimensional and complex. Exceptional innovators like Steve Jobs or Bill Hewlett and Dave Packard have utilized an understanding of the dimensions of innovation that drive its success. It was interesting that some of the internal response to Hurd’s comment was grumbling that HP could have bought Apple before the I-Pod. I think this misses the point that an organizations capability to continuously innovate is the most essential measure of its enduring intrinsic value and is accomplished by thoughtful investing not by speculating . It is essential to adapt the work of innovation to the environment in which it takes place. Hurd would have done better if he had utilized the GIM to locate the Inkjet business in 2005 and aligned HP’s innovation investments accordingly. Apple was correct to read the mobile phone market ripe for a discontinuous innovation and with location appropriate work they became the new gorilla in that market.
Any fool can explain the past but to correctly anticipate the future behavior of a system you must understand it. If my premise is correct, if in fact innovation is driven by dimensional characteristics that will work in the future much as they have in the past then identifying and locating your work with respect to these dimensions will enable you to probabilistically or stochastically anticipate the future.
Your innovation vector is first and foremost an assessment of what Constituents Value and what you choose to be your Core Competencies. If seen as abstract or static this is nearly useless (something like a stopped clock). This needs to be thought of as a snap shot at one location on the GIM of a specific action plan. As such it can be developed into a vector consisting of a sequence of snap shots moving along an innovation path in the GIM.
Here are three innovation dimensions: Drive to Market, Scale and Maturity. Drive to Market is the familiar progression through time of a product, service or solution; birth /growth /develop /manage /end of life. Maturity is the measure of how the elements of Scale begin then grow and become broadly utilized and become obsolete. Scale is an ontological (individual to group) concept of where the work is being done and the notion that sources and outcomes interact in creating the new knowledge that results in successful innovation [recall Nonaka and Takeuchi]. Marketplace is the recognizable grouping according to the restraining forces that control /moderate its markets. The US, the British Common Wealth Nations, or the European Economic Union could be considered as different marketplaces where the rules differ and can be combined where their rules are the same. Markets are the recognizable grouping of transactional exchanges between constituents within which are Industries or “Value Chains” that are recognizable groups of technologies /standards /expertise and trading partners. The personal printing market is served by several industries dominated by personal computing, software applications for document creation /sharing, laser and Inkjet printers, paper making. These industries consist of companies and institutions that provide the parts, systems, services, expertise and IP that sell to the personal printing market. Companies constitute the formal organizational structure that enables people to cooperate and perform in generating economic value / goods and to share in the profits according to broadly held expectations.
The characteristics at the various locations are generally fixed or at least predictable within similarly developed markets with common rules, expectations, and enforcement. By identifying and mapping where a program lifecycle will be operating it is possible to optimize the choices a business must make as it moves from cradle to grave of any specific product, service or solution.
The practical use of the GIM is to systematically learn from past programs in generating broad alignment in the planning and execution of the next innovation iterations (plan, do, check, act).
The “Eye-Gaze” system enables a UI where the cursor is moved to where the user is looking on the display. Here is a picture taken of the development system showing the product display and camera, the keyboard and second display to the left are development tools. The “Start Up” environment is often best understood by a story. In the late 1980’s a Beloit Wisconsin police officer, Dixon was shot in the line of duty and thought to be vegetative by all but his wife, Nancy (I have changed the names). Caregivers were obliged to do no harm but not to feel compassion. Nancy learned about “Eye-Gaze” and managed to persuade the police union and some local charities to help her come up with the $10k to purchase one of the first systems. Within an hour of getting hooked up (his head had to be supported in the field of view of the camera) Dixon typed "I love you Nancy”. For Dixon and Nancy this changed everything.
Looking at the ontological dimension … LC Technologies business plan required making the technology user friendly and robust for customers in their target market and then to organically expand into other markets in which the “Eye-Gaze” control offered unique benefits.
Putting “Eye-Gaze on the GIM provides a context to evaluate and understand prior programs and an explicit systematic approach to strategic planning and tactical execution both current and future.
In 1975 in the garage at his home near Philadelphia Don Parsons developed and built a small number of electronics test benches for Telephone Central Office equipment and launched his repair business. To grow Don needed to be a strategic partner with the regional Bell Operating companies (like Bell of Pa) and used his connections in the Bell’s and AT&T to pitch his business at a large meeting with phone company executives. Don impressed them with what he had to offer and as he completed his pitch a president at AT&T stood and suggested that while Don might be able to diagnose and repair the circuit packs AT&T would not sell him the component parts without which Don had nothing to offer. At this a president of the Regional Bell Operating Company stood and offered to purchase whatever parts Don needed and give them to him. It was not in AT&T’s interests to serve this need, it would be better for AT&T if the regional’s upgraded to the latest digital equipment but the regional’s needed to continue to operate the old electro-mechanical equipment and they were breaking loose from AT&T. What Don had to offer was welcomed by the regional operating companies, they wanted him to succeed and they could write checks.
Again, looking at the ontological dimension, here is some background regarding the Marketplace /Market /Industry … 1913 in what is known as the Kingsbury Commitment AT&T becomes a government sanctioned monopoly and operated as such for over 60 years. 1968 “911” adopted in US as the national emergency number 1974 the DOJ filed an antitrust law suit against AT&T 1975 the first digital switch (4ESS) dramatically increases capacity over the old electromechanical technology 1977 the entire US long distance network is controlled from one central location in NJ 1982 AT&T agreed to the break up in forming 22 “baby bells” offering local fixed station service
Using the GIM provides a context for both evaluating and understanding prior programs as well as an explicit systematic approach to strategic planning and tactical execution both current and future.
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