5 In 2002 GE China develops a cheap portable ultrasound machine that utilizes a laptop computer and a probePortable Ultrasound (2002)$30,000In 2007 GE China launched a dramatically cheaper model and sales took off.Portable Ultrasound (2007)$15,000$4 MM20022008$278 MM
6 Lessons in InnovationFocus on the jobs customers are trying to get doneThink beyond your hot productsIdentify non-consumption and non-consuming contextsLook beyond your industry for ideasBurn your ladder
7 1Focus on the Jobs Customers are Trying to Get Done
8 “People who want to buy power drills don’t necessarily want to buy a quarter-inch drill. They want a quarter-inch hole”- Prof. Theodore Levitt, Harvard Business School
9 Customers don’t just buy products or services. Job To Be DoneCustomers don’t just buy products or services.They hire products or services to get functional and emotional aspects of jobs to be done“Job-to-be Done”“Solutions”
10 The Job of “Cleaning Clothes at Home” Clean Clothes“Job-to-be Done”“Solutions”Detergent andWashing MachineZero DetergentWashing Machine
15 Under-Served Jobs Job Focus Identify jobs to be done where ad hoc or no solutions exist.Customer were trying get the job of “reselling and buying goods efficiently”. Ebay created a solution to achieve this job.
16 Creating Valuable Brands FedExCrestOnStarGoogleeBayStarbucksBlackberryXeroxKleenexLunchablesHill-RomDesign a solution that does a job well.Give it a brand that uniquely links that product to that job.As people hire it to do that job and find that it does it well, they learn to trust the brand for that purpose.They begin hiring it whenever they land on that “job space” – and talk about it.Advertising can then remind other people that they, too, land on this job, and that they should hire this branded product when they do.
18 Over-Served Jobs Disruptive Growth Bring disruption by entering the low-end or new markets with lower performing, cheaper products to non-consumersMicro LendingMotivation for new and first-time InvestorsOnline Stock TradingDIY, Less cost,Easy to accessInsurance Provider GroupCreating products toreach the under-served marketsWhite StripsNo Skill needed, DIY, Less cost
19 What Drives Non-Consumption PriceSkillsWhat constrains consumption?AccessTime
20 What Drives Non-Consumption Help new customers do a job that others were already doing.Often these jobs couldn’t be done due to high cost or skill requiredEnable less skilled people to get important/ unsatisfied jobs done in less centralized location
22 Download, Listen to, Organize, Access and Share music Related Market GrowthBringing newer solutions to existing customers get related or ancillary jobs doneiTunesDownload, Listen to, Organize, Access and Share music
23 Related Market Growth Job Focus Innovation that enables customers to do related jobs that are underserved.
24 Outcome Expectations – Job Hiring Criteria Customers define success and failure criteria for hiring solutions for each of these jobs. These criteria are called Outcome expectationsThere are two kinds of outcome expectations – desired outcome expectations and undesired outcome expectationsJobs and outcome expectations form the basis for identifying opportunities for innovation, growth and new value creation
25 Outcome Expectations (Hiring Criteria) DesiredOutcomeExpectationsEasy to CleanEfficacy of CleaningEasy Stain RemovalClothes Smell FreshClothes Look FreshSafetyReliable CleaningUndesiredExcessive CostTime to Clean ClothesDamaged ClothesUse of Resources (Water, Electricity, etc)Wrinkled ClothesAllergensSpecial Skills Required“Job-to-be Done”“Solutions”
26 Jobs To Be Done The Job Map Define Locate Prepare Confirm Execute MonitorModifyConcludeJobs To Be Done
30 Bosch Circular Saw“Direct-Connect” Cord: Minimizes chances of cord connection snags, offers quick and easy replacement if cord is cut, minimizes saw “prep” time (wrapping/unwrapping cord for storage).Anti-snag lip on the lower blade guard: Minimizes the chances of the lower blade guard interfering with the cut, minimizing the chance of cutting error.Dust port on the rear of the upper blade guard: Directs dust down and away from the cut-line, improving visibility of the cutting line and minimizing the chance of cutting error.Dust blower: blows dust from the cutting line, improving visibility of the cutting line and minimizing the chance of cutting error.“Vari-Torque” clutch: Allows the blade slip on the arbor if the resistance suddenly increases, like when pinched in a board, reducing the chances of kickback and improving the saw safety.
35 Your Innovation Portfolio Types of InnovationProduct/ServiceProcessBusiness ModelBreakthroughSubstantialIncrementalDegrees of Innovation
36 Innovation at Apple Types of Innovation Degrees of Innovation Product/ ServiceProcessBusiness ModelBreakthroughSubstantialIncrementalDegrees of InnovationRecent study by Kaiser Associates revealed that iPod—along with other Apple products affected by its halo—created $70 billion in shareholder value in just three years.
37 Doblin Model for Innovation Types Business ModelNetworks and AlliancesEnabling ProcessesCore ProcessesProduct PerformanceProduct SystemServiceChannelBrandCustomer ExperienceFinanceProcessesOfferingsDeliverySource: Doblin Inc.
42 The World Economic Pyramid Population(Millions)TierAnnual Per Capita Income1> $20,0001,500 – 1,7502 and 3$1, $20,0004,0004< $1,500Tier 1Tier 2& 3Tier 4
43 What Drives Non-Consumption PriceSkillsWhat constrains consumption?AccessTime
44 Disruptive Innovations: A driver of failure and the source of new growth opportunities Pace ofTechnologicalProgressIncumbents nearly always winSustaining innovationsDisruptive innovationsPerformancePerformance that customerscan utilize or absorbEntrants nearly always winTime
45 Beat Competitors with Asymmetry of Motivation % of tons25–30%55%Steel QualitySheet steel18%22%Structural SteelQuality of integrated mills’ steel12%8%Angle iron; bars & rodsQuality of minimill-produced steel7%4%Rebar1975198019851990
46 The Strategies for Asymmetric Competition Bring a better product into an established marketPerformanceTimeLow-end disruptionAddress over-served customers with a lower-cost business modelNon-consumers or Non-consumingoccasionsDifferent measureOf PerformanceTimeNew-market disruption: Compete against non-consumption
47 Disruptive Strategies NON-CONSUMERCore Market GrowthBringing better solutions to existing customers to get the job done betterDisruptive GrowthBring disruption by entering the low-end or new markets with lower performing, cheaper products to non- consumersRelated Market GrowthBringing newer solutions to existing customers get related or ancillary jobs doneNew Market GrowthBringing newer solutions to perform jobs for which ad hoc or no good solutions existCURRENT JOBSOutcome FocusHelp new customers do a job that others were already doing.Often these jobs couldn’t be done due to high cost or skill required
48 Expensive failure always results when disruption is framed in technological rather than business model termsTabletop Radios, Floor-standing TVs, ComputersPerformanceTimePath taken byvacuum tube manufacturersDifferent measureOf PerformancePortable TVsPocket radiosNon-consumers or Non-consumingoccasionsHearing AidsTime
49 Galanz EnterpriseIn 1992, developed a new microwave oven for the tiny Chinese kitchens;After winning the Chinese low-end market, moved up-market to serve both local and global markets.In 2005, holds 75% of Chinese market and nearly 50% of global market in microwave ovens. ( >600 patents in microwave technologies)Since 2004, has started to replicate the same strategy by developing air-conditioners for tiny Chinese homes. Within 4 years, became No. 2 Chinese air-conditioner exporter.
50 Disruption in Business Models Disruption has been the dominant historical mechanism for making things more affordable and accessibleYesterdayFordDept. StoresDECDeltaHamiltonXeroxIBMCullinetAT&TDillon, ReadTodayToyotaWal-MartDellSouthwest AirlinesFidelityCanonMicrosoftOracleCingularMerrill LynchTomorrowCheryInternet retailRIM BlackberryAir taxisETFsZinkLinuxSalesforce.comSkypeE-Trade
51 Examples of Developing Countries’ Disruptors IndiaTata GroupWiproInfosysNIITChinaGalanzBaoSteelLenovo Groups and Huawei TechnologiesHaierBrazilNaturaAmBevMexicoCemexIndonesiaLNM GroupIsraelTeva PharmaceuticalsPhilippinesJollibee Foods
53 Where do Ideas Come From? NatureOutside IndustryIndustryTTeamIndividualTeamIndustryOutside IndustryNature
54 Russian Lunar Vehicle Light Bulb The Russians launched an unmanned Lunar Probe to the moon’s surface with the intention to transmit TV pictures to the Earth. A projector using a light bulb was designed to illuminate the lunar surface ahead of the vehicle. However, existing light bulbs would not survive the impact of landing on the Moon surface.The most durable bulbs were ones used in tanks, but even those bulbs would crack at the joint between the glass and the screw base during tests.Problem – How to keep the light bulb from cracking at the interface between the glass bulb and the base?
55 Psychological Inertia REAL BOUNDARYCONSTRAINTSIDEAL SOLUTIONEMOTIONALBOUNDARYPROBLEMSOLUTIONEXPERIENTIALBOUNDARYINTELLECTUALBOUNDARYBELIEFBOUNDARY
56 Where do Ideas Come From? NatureOutside IndustryIndustryTTeamIndividualTeamIndustryOutside IndustryNature
57 Catching Errors in New Car Models GM had a problem. It took GM over 70 days to track an error introduced while assembling a new car modelGM used Process Benchmarking and Forced Association techniques to innovateWho is good at catching errors very quickly?Answer: CDCGM had a problem. It took GM over 70 days to catch an error introduced while making a new vehicle.
58 Center for Disease Control CDC is able to track down the source of food poisoning within 72 hours of eventBy adapting the principles from CDC, GM reduced the time it takes to track vehicle errors from 70 days to less than 10 days resulting in savings of billions of dollars from recall expenses
59 “Someone, Somewhere Already Solved Your Problem”
60 Innovation principles Patent ResearchKey discoveries:Problems and solutions were repeated across industries and sciencesPatterns of technical evolution were repeated across industries and sciencesInnovations used scientific effects outside the field where they were developedSet of system levelInnovation principles> 5,000,000 Patents
61 Eliminating Contradictions Systems often reaches its limits due to contradictions built into the system
62 RQ-7 Remote Reconnaissance Unmanned Air Vehicle
63 Patent Research: Contradictions Key discoveries:Progress is hindered due to contradictions in the systemsTechnical ContradictionPhysical Contradictions~1,250typicalsystemcontradictions~40techniquesfor overcomingsystem conflicts>200,000 Patents
64 Leveraging the Knowledgebase Contradiction?YesWant to Know How to Do it?Predict Evolutionary Potential?Needs Improvement?TechnicalContradictionPhysicalContradictionKnowledgebase ToolYesYesYesContradiction MatrixSeparation PrinciplesEffectsSolution TreeTrendAnalysis
65 Innovation Is…recognising that the ‘root cause’ of your innovation problemis that your system has hit a ‘yes, but’ limit…
66 …and that your job is to resolve Contradiction… High Quality or Low CostAffordable or CustomizedFirst Cost or Life Cycle CostFlexible or RigidBig or SmallHigh Quality and Low CostAffordable and CustomizedFirst Cost and Life Cycle CostFlexible and RigidBig and SmallA or BA and B
67 …using a database describing how other people in other industries already solved similar contradictionsWhat’s stopping you…What youwant toimprove15, 1723, 40How otherssolved theproblem
68 Typical Design Compromises - The Bicycle Saddle Saddle must be WIDE to provide comfortable supportANDSaddle must be NARROW to permit pedaling action
71 Conflict Elimination - Bicycle Saddle Improving Factor: Length of Stationary ObjectWorsening Factor: Shape“divide an object into parts capable of moving relative to each other”“if an object is rigid or inflexible make it movable or adaptable”“Make movable parts fixed and fixed parts movable”
73 Leveraging the Knowledgebase Contradiction?YesWant to Know How to Do it?Predict Evolutionary Potential?Needs Improvement?TechnicalContradictionPhysicalContradictionKnowledgebase ToolYesYesYesContradiction MatrixSeparation PrinciplesEffectsSolution TreeTrendAnalysis
74 Three possibilitiesThinking FUNCTIONDirect a variation in PROPERTY.Conflicting PROPERTIES
75 Engineering Tribology What Are “Effects”?Established rule or principle from wide range of disciplinesEffects from many disciplinesPhysicsRheologyChemistryBiologyGeometryEngineering TribologyAcousticsInformationPsychologyEducationMotivation
76 Why Use “Effects” To figure out how to achieve a result No contradiction exists, but there are no specific solutionsContradiction results in theoretical solution that needs to be made practicalPractical solution is unknown
77 Example -TechnologyPower plant in Northern California was emitting selenium in waste waterConventional design for water treatment facility would cost more than 50% of the cost of the power plantLook for ways outside conventional water treatment to perform the function “remove selenium from water”Solution: cattails and ragweed are plants that will extract selenium from water, and bind it in their tissues.Create a swamp where plants can purify the water
78 Example Remove water from glass (Don’t touch the glass) “Solutions change, functions stay the same”
81 The Job of “Cleaning Clothes at Home” “Job-to-be Done”“Solutions”
82 OBJECTIVE: To sell more washing powder OBJECTIVE: To sell more ‘cleaned clothes’
83 Working Backwards from Perfect CurrentSituationIdealInnovation1… 2… 3… n.…Generation….CurrentDesignIntermediatesolutionsFunction achievedwithout resourceCleaningwithoutexternalagentDetergent and Washing MachineRe-usablewashingmethodClothes that cleanthemselves
86 "Wash with Ultrasonic Waves and Electrolysis" washing machine. By combining Electrolyzed Water's dirt dissolving and bacteria-removing properties with the cleansing power of Ultrasonic Wave technology SANYO has brought to realization the World's first "Zero-Detergent course" washing machine.
87 Where do Ideas Come From? NatureOutside IndustryIndustryTTeamIndividualTeamIndustryOutside IndustryNature
88 Biomimicry (a.k.a. Biomimetics) Biomimicry is the science that studies nature’s models and then imitates or takes inspiration from these designs and processes to solve human problems.Nature runs on sunlightNature uses only the energy it needsNature fits form to functionNature recycles everythingNature rewards cooperationNature banks on diversityNature demands local expertiseNature curbs excesses from withinNature taps the power of limits
89 Why Learn from Nature?If you put the history of the planet on a calendar year, bacteria arrived in March. Other species followed. The human species came at 11:45 pm on the last day of the year. Therefore, other species have been evolving and doing “R&D” a lot longer than we have; let’s learn from them.Nature has experience from 3.8 billion years of R&D generating million survivors of well adapted solutions.These are extremely well matched to the types of problems we have and need to solve.
90 How does Nature Create Materials High TemperatureHigh PressureChemical Treatment ProcessIn nature, designs are organic, they are very small (only as big as they need to be to fit the function). Human designs are very geometric and our inventions are very brittle, stiff and most of them depend on wheels for mobility.Nature manufactures its materials under life-friendly conditions -- in water, at room temperature, without harsh chemicals or high pressures
92 Cricket Inspired Speakers Imagine making high-end audio speakers based on a cricket that uses its burrow to amplify sound. New Kilpsch speakers are created by studying how Egyptian mole crickets amplify sounds
93 Termite Inspired Building A termite mound can seem eerily like a skyscraper, especially when you consider the mount’s efficient regulation of air flow, temperature and humidity.
94 Solving World’ Water Problem Namibian BeetlePill Bug
95 Tardigrades and Vaccines There are serious issues with shipping worldwide due to breakdown of refrigeration.Tardigrades can deal with extreme dehydration, vacuum and UV radiationResearchers from University in Sweden shipped two species of tardigrades aboard a 2007 European Space Agency mission that reached160 miles up in low orbit. Some of the water bears were exposed to the vacuum of space only, while others were exposed to vacuum and ultraviolet radiation. Researchers reported that the tardigrades survived vacuum-only conditions quite well.
96 Natured Inspired Business Models The Land Institute is studying prairies as a model for an agriculture that features edible, perennial polycultures and that would sustain, rather than strain, the landVarious researchers in Industrial Ecology are looking for ways to apply nature's lessons of economy, efficiency, cooperation, and rootedness to the marketplace.