Effective innovation the development of successful engineering technologies

Preface xiChester Carlson—an Outstanding Innovator 3 There are Inventions and Then There Are Inventions 5 The Story of Television—Success With Innovation 6 Summary: Effective Innovation

EFFECTIVE INNOVATION

Don Clausing

and Victor Fey

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Library of Congress Cataloging-in-Publication Data

Clausing, Don.

Effective innovation : the development of winning technologies / Don

Clausing and Victor Fey.

p cm.

Includes bibliographical references and index.

ISBN 0-7918-0203-5

1 Technological innovations 2 Technological

innovations—Management 3 Inventions I Fey, Victor II Title.

T173.8.C58 2004

Preface xi

Chester Carlson—an Outstanding Innovator 3

There are Inventions and Then There Are Inventions 5

The Story of Television—Success With Innovation 6

Summary: Effective Innovation 7

The Enterprise Context 11

The Product-Acquisition Context 12

Effective Innovation Process 14

Interactive Activities for Effective Innovation 15

What Latent Needs are Unsatisfied 17

What Technology Integrations Are Important? 19

What Are the Important Market Segments? 20

Barriers to Beware of 20

Watt and the Steam Engine 21

Carlson and Xerography 21

Canon Copier Introduction Into the United States 22

Cylinder-Valve Paving Breaker 22

Lessons Learned 23

Summary 24

Table of Contents

Chapter 3: TECHNOLOGY STRATEGEY:

The Challenge of Technology Innovation 27

Market Needs—Opportunities for Innovation 28

Launch Innovations; Market Needs 29

Growth Innovations; Market Needs 30

High-Potential Technologies to Satisfy Market Needs 31

Delphi method 31

Mathematical modeling 31

Scenario analysis 32

Morphological analysis 32

Introduction to TRIZ—Invention on Demand 33

A Periodic Table for Technology 35

Guiding Technology Evolution 38

Phase 1: Analysis of the Past System’s Evolution 40

Phase 2: Determination of Strategic Opportunities

(High-Potential Inventions) 45

Law of Increasing Degree of Ideality 47

Law of Non-Uniform Evolution of Sub-Systems 48

System Conflicts and Architectural Innovations 52

Law of Transition to a Higher-Level System 55

Law of Increasing Flexibility 59

Law of Transition to Micro-Level 62

Law of Completeness 64

Law of Shortening of Energy Flow Path 66

Law of Harmonization of Rhythms 69

Applying the Laws and Lines of Technological

System Evolution 70

Science, Technology, and the Market 74

Summary 75

Chapter 4: CONCEPT DEVELOPMENT 77

Functions 81

Actions 83

The Ideal Technological System 84

System-Conflict Diagrams 84

Resolving System Conflicts 85

Resolving System Conflicts: Elimination of the Conflicting

Separation of Opposite States In Time—Soldering 95

Separation of Opposite Properties In Time—Paper Feeder 96

Separation of Opposite Properties In Space 97

Separation of Opposite Properties Between the Whole

and Its Parts 99

Resolving System Conflict: Eliminating the Harmful Actions 100

Resolving System Conflicts—Conclusion 103

The Basic Technological System: the Substance-Field

Model 104

Sufield—Basic Concept 104

Sufields—Further Development 107

Using Sufields to Innovate 107

Structural Changes to Sufield Diagram 108

Changes to Fields 109

Changes to Substances 110

Types of Applications or Objectives 110

Standards For Sufield Transformation 111

Retard Roll 111

Take-away Rolls 112

Summary of Sufields 113

The Algorithm for Inventive Problem Solving 114

Problem formulation 114

Breaking psychological inertia 115

Combining the powers of various tools of TRIZ 116

Putting It All Together: an Example 121

Log Debarking—Resolving a System Conflict 123

Novel Peristaltic Pump—Identifying a New Physics 126

Summary 131

Pugh Concept Selection (and Generation) 135

Step 1—Choose Criteria 136

Step 2—Form the Matrix 138

Step 3—Clarify the Concepts 138

Step 4—Choose the Datum Concept 139

Step 5—Run the Matrix 140

Step 6—Evaluate the Ratings 142

Step 7—Attack the Negatives and Enhance the Positives 143

Step 8—New Datum—Rerun the Matrix 143

Step 9—Plan Further Work 143

Step 10—Iterate to the Winning Concept 144

Applications of the Pugh Concept Selection Process 144

Challenge: Make the Innovation Work Well for Customers 149

Noises—Challenges to the Innovation 150

Environmental Variations 150

Variations in Production 152

Variations as the Result of Time and Use 152

Variations in Product Characteristics 152

Functional Noises 153

Failure modes 153

Failure Mode Measurement Method 1 156

Failure Mode Measurement Method 2 157

Failure Mode Measurement Method 3 157

Secondary and Tertiary Failure Modes 158

Conclusion About Failure Modes 158

Shortcomings of Traditional Development Approach 158

Case Study 159

Problem Reaction 159

Limits of Problem Reaction 161

Traditional Culture 163

Valid Role for Problem Solving 164

Operating Window—Key for Reliability 165

Robustness—Development Process 166

Step 1—Identification of the Critical Functional

Variables 166

Step 2—Resources for Robustness 167

Step 3—Identification of Failure Modes and the Noises

that Cause Them 168

Failure Modes 168

Noises 169

Step 4—P Diagram 171

Step 5—Operating Window Determination 172

Step 6—Improving the Operating Window 173

Step 7—Completion 175

All Failure Modes 177

Critical-Parameter Drawing 178

Operating Window and Physical Contradictions 179

Case Studies—Success in Practice 180

CHAPTER 7: TECHNOLOGY-READINESS ADULT 187

Why You Want to Do a Technology-Readiness Audit 189

Technology-Readiness Event 191

Readiness Criteria 192

Robustness 192

Critical Parameter Management 193

Ideal Function/Failure Modes 196

Failure Modes/Critical Functional Parameters 196

Critical Function Parameters/Critical Specifications 197

Critical Specification/Critical Production and Field-Service

Quality 197Summary of CPM 197

Other Readiness Criteria 198

Other Readiness Criteria—Technical 198

Other Readiness Criteria—Total Value Chain 199

Readiness in the Corporate Culture 199

CHAPTER 9: MANAGEMENT OF EFFECTIVE INNOVATION 211

Leadership of Effective Innovation 213

Managing the EI Process Successfully 214

Integrate EI Into Product Acquisition 215

Integrate With the Enterprise 218

Xerox PARC and the Personal Computer 219

3M Corporation 219

Barrier Summary 220

New Business 220

Spend the Right Amount 221

Get the Right People 222

Successful Management Summary 224

Transition to Effective Innovation 225

Getting the Right People 225

Transition to the Effective Innovation Process 225

This book is for those who wish to be effective in innovation

Tech-nical innovations include cars, airplanes, computers, lasers andmany other capabilities that did not exist 200 years ago Thesehave enriched our lives as they have relieved us of the backbreaking labor

that consumed people in the past

The steps to create such innovations are described in this book By

fol-lowing these guidelines you can be among the best technical innovators

Although the total impact of technical innovations since the start of

the Industrial Revolution in the 18th century has been huge, the birthing

of most of these innovations has been long and difficult The steps that

have been taken in each innovation have usually been uncertain, which

has resulted in a long lag between development of the innovation and its

use in the market place In retrospect, the entire process seems to have

been chaotic

However, over time pioneers have worked to develop more systematic

ways of innovating technology This book pulls together these

improve-ments to present a complete systematic process for taking all steps

toward effective innovation

By following these steps you will be able to create new innovations

that you would not otherwise create You will be able to develop

innova-tions in much shorter periods of time than have been traditional Your

innovations will have high inherent reliability, and can be smoothly

transferred into product commercialization In brief, your innovation

activity can be a great improvement over the traditional approach

This book is for all technical innovators, from the youngest and

newest to the most senior managers, from those in the largest enterprises

to the individual inventor Invention has long been regarded as chaotic,

Preface

dependent on the random inspiration, and the results have been

inher-ently unreliable until much later This book will enable you to overcome

that Inventions can be made systematically and quickly Then they can

be made reliable in a short time, before they are commercialized for

pro-duction and the market If you are interested in coming up with new

ideas and then getting them to customers quickly with good acceptance,

then we believe that this book will be of great benefit to you

This book is intended for engineers who do the innovative work, and

for those who manage this activity It covers innovation from technology

strategy to the transfer of the reliable new technology into

commercial-ization development My book Total Quality Development (Clausing 1993)

already covers the commercialization activity

Innovation is sometimes thought of as invention, but to be successful

there are six steps Technology strategy helps guide the innovative

activ-ities to new ideas that customers will want Concept creation does the

actual invention Concept selection picks the best ideas for further

devel-opment Robustness development makes the new concept robust and

reliable in its performance, before detailed commercialization begins

Technology readiness determines that the new concept is ready to go

for-ward Technology transfer smoothly moves the new concept forward into

the commercialization activity with ever opportunity for future success

Each of these six steps has been problematic in traditional practice

When they are left to chance, the result is that almost always one or more

steps is not very successful This book describes the successful approach

to each of the six steps, greatly reducing your dependence on inspiration

and good luck You will be able to greatly improve your performance

above the traditional levels The time to develop innovations will be

greatly reduced Good reliability will be designed in before detailed

commercialization begins This will greatly reduce the time for products

to enter production and the market The required development resources

will be greatly reduced Best of all, customers will buy your products

Industrial technologists are expected to be the primary readers of this

book All people in industry who do innovative work can benefit from

this book This book would also be ideal for a course on technology

development in engineering schools Strangely, few if any engineering

schools have such a course Many management schools have a course on

the management of technology By symmetry the engineering schools

could be expected to have a course on the development of new

technol-ogy Hopefully this book will encourage some engineering schools to

begin such a course

This book is organized into 10 chapters In the beginning are two

introductory chapters:

The first introduces the subject; the second puts it into the context of

industrial enterprise Then the next six chapters each cover one of the six

steps for effective innovation The ninth chapter is on the management

of this activity And Chapter 10 summarizes the benefits

Chapters 3 and 4 are primarily based on TRIZ, the systematic approach

to inventions that was created by Genrikh Altshuller in the former USSR

Chapter 5 is based on the concept selection method of the Englishman

Stuart Pugh The sixth chapter describes the development of robustness

to provide inherent reliability It describes a simple method that is easy to

use Then it introduces the powerful methods of Dr Taguchi from Japan

This book combines the best approaches from all over the world It is

fur-ther guided by the long industrial experience of the authors

We recommend the reading of the entire book However, if you want

to quickly focus on one topic, it is easy to do so Chapter 2 gives the

enter-prise context Chapters 3 to 8 cover one of the six steps Chapter 9 is on

management Chapters 3 and 4 are on TRIZ and are best read together—

they provide the reader with an accessible introduction to this subject,

which is still relatively new outside of the former USSR The other

chap-ters can be read individually

We the authors owe great debts to many for the material in this book

First, we owe much to Altshuller, Pugh, Taguchi, and others who have

pioneered the new methods that make effective innovation possible We

also owe a great debt to many colleagues in industry and academia from

whom we have learned much

We specifically express our appreciation to John Bailey, Tim Davis, Jim

Norton, and Alexander Shoshiev who reviewed parts of this manuscript

and made helpful comments Also, thanks to Jim Norton, who suggested

the title for this book

I (Clausing) want to express my appreciation to Dr Robert C Dean, Jr

As a young engineer I worked with Bob, and was inspired by his

excite-ment in innovation based on deep technical understanding He started

me on the path that has eventually led to this book

It has been my (Fey) good fortune to have worked with Dr Eugene

Rivin over the last decade His engineering brilliance and creativity has

made our cooperation great fun His support and friendship have helped

me launch my professional career in the United States, and by extension

led to the work on this book For all of these reasons, I am grateful

To you the reader, we hope that you will enjoy the power we have

found in effective innovation

Don ClausingVictor Fey

1

Chester Carlson was born poor, yet he died wealthy Innovation was the

springboard that propelled him from poverty to riches

As a boy, Chester Carlson lived in poverty in the San Bernardino

Val-ley of California Every day he rode his bicycle into San Bernardino to

earn what money he could by doing odd jobs This was virtually the only

income his family had

Carlson decided to work his way through college In 1930, at the age

of 24, he emerged from the California Institute of Technology with a B.S

degree in physics Thirty-five years later, when he had given the college

millions of dollars for a new laboratory, he said to his wife, “If I hadn’t

taken that course at Caltech, I’d never have been able to understand even

the first principles of a copying machine.”

During the Great Depression, there were few jobs awaiting young

physicists in 1930 Carlson wrote more than 80 letters applying for work

They brought only two replies, both notes of regret from companies that

could not use him

After some temporary jobs, he finally found a permanent job in the

patents department of P R Mallory and Company in New York City It

was his first step toward the invention that revolutionized the methods of

communication

On patent applications, Carlson’s responsibility, government

regula-tions dictated that drawings and specificaregula-tions had to be copied The

only method of doing this was the photostat process, which was

expen-sive and slow On an evening when Carlson and an associate had worked

until almost midnight preparing an application, he turned wearily from

his desk to say, “There must be a quicker, better way of making these

copies!” “Sure,” his colleague agreed “But nobody has ever found it.”

“Maybe nobody has ever tried,” Carlson replied

Carlson’s voluminous reading of technical publications eventually

planted a strange possibility in his mind It was exciting and novel, but it

would require much research and experimentation to test its validity He

needed a laboratory

He began by converting the kitchen of his small New York apartment

into a workshop Within a short time, the place was filled with metal

plates, glass slides, jars of chemicals, resins, tools, powerful lamps—

equipment that cost him almost all the money he had been able to save

Though still vague, his idea was focused on the feasibility of using

photoconductivity to take pictures of documents He wanted an

electri-cal process in order to eliminate the slow, wet development process of

conventional photography So he identified what he sought as

“elec-trophotography.”

After Carlson married, his wife Linda had very little room for herself

in the kitchen that doubled as a laboratory It was difficult to cook a meal

when most of the burners were covered with equipment “Mother,” she

reminded him, “owns that other house in Astoria It’s got an empty

apart-ment Maybe she’ll let you use it.”

So Carlson moved his laboratory equipment into an empty room

behind a beauty parlor in the Astoria section of New York City Today, a

bronze plaque on the house marks it as the place where Chester F

Carl-son invented the xerographic process

On October 22, 1938, Carlson and his assistant, Otto Kornei, tested the

latest idea that had come to Carlson With Kornei at his side, he worked

carefully and slowly On a glass slide he inked the date and place of the

day’s experiment: 10-N22-38 Astoria

Then he vigorously rubbed a cotton cloth over a sulphur-coated metal

plate This friction charged it with static electricity

Immediately after the rubbing process the sulphur-coated metal plate

was exposed to the inked glass slide under the glare of a blazing

flood-light It was kept like that for only a few seconds Then, nervous with

anticipation, Carlson dusted the charged metal plate with a

vegetable-based powder called lycopodium He bent his head to blow the surplus

powder away And there, unmistakably visible, though blurred, on the

metal plate, was the reproduced inscription: 10-22-38 Astoria

He and Kornei blinked at each other as if they were facing a mirage

But the experiment was not yet completed Carlson pressed a wax-coated

paper hard against the plate After a moment, when he peeled it away, the

sheet retained a copy of the inscription

For a long time Chester F Carlson stared at the paper in silence, filled

with emotion This was the moment of realization The world’s first

exam-ple of electrophotographic copying had just been created.1Eventually the

word xerography meaning dry copying was created for the process.

Eventually, Chester Carlson’s invention of xerography was taken up by

a small company in Rochester, New York It changed its name to Xerox

to reflect the new innovation When the Xerox 914 copier appeared on

the market it was a phenomenal success Both Chester Carlson and

Xerox made huge amounts of money from his innovation Carlson’s

inno-vation had launched a multibillion-dollar business

THERE ARE INVENTIONS AND THEN THERE ARE INVENTIONS

All inventions are divided into three parts: launch inventions, growth

inventions, and library inventions Chester Carlson’s invention of

xerog-raphy was the core of a launch innovation It launched an industry that

was worth billions All of us would be glad to have one of these However,

they are rare

Today’s Ford car is vastly superior to the Model T Yet there have

been no launch (watershed) innovations on the path from Model T to a

modern Ford car There have been a myriad of smaller innovations that

have produced big improvements and kept Ford a leader in the

auto-motive industry Disk brakes, fuel injection, radio, air-conditioning, and

the list goes on and on These are growth innovations Ford and all

suc-cessful companies keep a steady stream of these coming through the

innovation pipeline Companies whose innovation pipelines runs dry

fail in the marketplace

Finally there are library patents Their primary role is to fill up libraries.

They have little or no strategic value Enterprises must not become

dis-tracted by the large number of these patents—non-innovations

In this book we show you how to make both launch and growth

inno-vations However, realistically nearly all innovations in enterprises are

growth innovations One compilation of the 52 watershed inventions

1The story has been edited from My Years With Xerox (Dessauer 1971).

between 1745 and 1972 found that only three were made in large

enter-prises: the transistor, nylon, and the microwave oven This explains why

many references to corporate innovations cite the transistor and nylon

These are almost the only enterprise watershed innovations

Therefore, the vast majority of enterprise innovation is aimed at

growth innovations Next, let’s examine these more closely, using

televi-sion as an example

THE STORY OF TELEVISION—SUCCESS WITH INNOVATION

Modern television was invented in the 1920s By the time of the first

sig-nificant telecast, at the New York World Fair of 1939, RCA had control of

the major television patents that launched the industry

RCA had been started just after World War I, and quickly became the

dominant company in radio It rode its leadership in innovation to

jus-tify its name of Radio Corporation of America

In the 1930s RCA became the technological leader in television In

1939 it launched the first successful commercial television When

televi-sion expanded dramatically after World War II, RCA was the leader in

black-and-white television

While black-and-white television was becoming a huge commercial

suc-cess, the development of color television was the focus of innovation

Again, RCA emerged as the innovation and commercial leader Some color

technologies used a mechanical wheel to achieve the color separation In

the late 1940s and early 1950s a fierce battle raged between the partly

mechanical approach and the all-electronic approach CBS pushed the

partly mechanical approach, whose roots dated back to the 19th century

RCA held out for the much more innovative all-electronic technology

The RCA approach became the United States standard in 1954, and

RCA became the leader in color television In 1964 RCA had 42% of the

color television market in the United States

After 35 years of leadership in innovation, RCA was on top of the

world It had been the innovation and business leader in three industries:

radio, black-and-white television, and color television

As David Sarnoff became older and then retired, RCA lost its

innova-tive edge Instead, it followed the fad of the time—diversification—and

invested in many industries The investments included a rug company, as

well as a company whose business was frozen TV dinners that featured

chicken Another investment was in an automotive rental company This

combination of investments led to the wry internal joke that RCA stood

for rugs, chickens, and automobiles It was a vast step down into the

abyss for the former leader in innovation

Meanwhile, during the 1960–1985 period, Sony became the dominant

innovator in color television technology By major growth innovations

such as the Trinitron color tube, Sony forged to the lead

Sony was continuing its leadership in innovation that had started with

the transistorized radio, and included the first transistor television, the

Trinitron, the home VCR, the CD player, the Walkman, and the video

camcorder Sony is a name that has come to be associated with

innova-tion in the last half of the 20th century in the same way that RCA had

been from 1920 to 1960

As Sony’s business expanded on the wings of innovation, RCA settled

into a genteel decline By 1986, RCA’s market share in color television

sets had dropped from 42% to 17.5% Lacking any better direction, RCA

was sold to General Electric (GE), which kept the RCA consumer

elec-tronics business only a short time before selling it to Thompson

Sony made its name by being a leader in growth innovation RCA had

been a leader When it became a rug, chicken, and automobile company

it turned into just another corporate entity to be passed around among

global giants

SUMMARY: EFFECTIVE INNOVATION

This book is about effective innovation The scope covers both launch

innovations and growth innovations.

This book is for you if you want to be another Chester Carlson who,

through innovation, launches a new industry This book is also for you

if you’re working in an enterprise and want to be a leader in growth

innovation

Effective innovation is difficult to do well It is easy to lapse from

lead-ership, as happened to RCA In 1917, shortly before the end of World War

I, B C Forbes formed his first list of the 100 largest American

compa-nies The firms were ranked by assets, since sales data were not

accu-rately compiled in those days In 1987, Forbes republished its original

“Forbes 100” list and compared it to its 1987 list of top companies Of the

original group, 61 had ceased to exist Of the remaining 39, 18 had

man-aged to stay in the top 100 Only two performed better than the

stock-market averages The challenge to growth innovation is great

The challenge to the practitioners of innovation is to maximize the rate

of product improvement in their customer attractiveness—the ratio of

performance to cost Performance here means everything that attracts

customers, such as power and reliability Innovation performance is

mea-sured by the number of new ideas per year, the hit rate2of those ideas, the

value to the customer of each successful idea, and the cost associated with

the innovation, including the cost of development This book will help you

greatly improve your hit rate and the value of the innovations, and greatly

reduce the cost and time of innovation development

If you follow the suggestions in this book, your innovation activity will

be greatly improved in its effectiveness Much time and money will be

saved Given resources that are always limited, this book will enable you

to make effective use of your resources, so that you are an enterprise with

a competitive edge in innovation We are confident that this book can

greatly improve the innovation activity of even the innovation leaders

2 One famous study suggests that the overall hit rate is one in 3,000 (Stevens and Burley

1997).

Steps for Successful Innovation

2

Con a flash of inspiration—the lightbulb going on over the

inven-tor’s head Taking effective steps greatly improves the odds forsuccess This includes clear recognition of the role of innovation within

the enterprise

THE ENTERPRISE CONTEXT

Effective innovation is part of product acquisition, which in turn is one

of the four generic enterprise processes

All enterprise activities are carried out by one of these four

processes Financial success requires being good at all four A

break-down in any one of the four can quickly throw the enterprise into

C H

A IN

SA LE

S &

M

A R

K E

T

G

INTEGRATION AND DIRECTION

THE PRODUCT-ACQUISITION CONTEXT

Now we will delve further into the Product Acquisition process itself to

better understand the role, context, and scope of Effective Innovation

Successful product acquisition is done as shown in Figure 2.2

Product acquisition, as shown in Figure 2.2, has five steps:

1 Effective Innovation

2 Business strategy/vision

3 Product-portfolio architecture

4 Product pipeline (Detailed development)

5 Market feedback, and product support in the field

Thus, Effective Innovation is one of five steps for successful product

acquisition

Effective Innovation provides new product concepts at the total

sys-tem, subsyssys-tem, and component levels These new concepts already have

reliability designed into them They make the large improvements in the

performance-to-cost ratio These new concepts can include new

produc-tion and field-support processes

Business strategy and vision defines the characteristics that new

prod-ucts need to have to be winners in the marketplace This includes

mar-ket forecasts, customer value propositions, and the competitive profile

This also provides information about which innovations will have the

greatest business significance

Product portfolio simply means all of the products that the

enter-prise has to offer Each of the “boxes” in Figure 2.2 represents a

prod-uct family, which consists of two or more prodprod-ucts The architecture

defines the market; the characteristics of the products; the subsystem

concepts; the packaging of the subsystems; the overall interactions

such as the timing diagram, the flow of energy, material, and

informa-tion; relevant standards; and the supporting value-chain plans This

includes modularity and reusability

The Product Pipeline represents the flow of each product through

detailed design and development In this activity a plethora of small

deci-sions must be made quickly and correctly to apply the learning of many

decades of experience

The fifth activity is Market Feedback The voice of the customer is

obtained to understand the reactions of customers to the new products,

and learn what characteristics they would like to see in future products

Market Feedback also includes analyses of sales to determine what

char-acteristics and features actually drive sales

In addition to the five activities of product acquisition, there are two

ambiance contexts that affect product acquisition These are represented

in Figure 2.2 by the outer rectangles that enclose the five activities of

product acquisition The first is the corporate infrastructure and core

capabilities If this is supportive, then effective innovation has a chance

to succeed That in turn is embedded in the world at large Effective

innovation cannot do much to change these contextual elements It is

important to be aware of them, and to act in accord with them

EFFECTIVE INNOVATION PROCESS

Effective innovation has six steps:

1 Technology strategy—what to focus on

2 Concept generation—apply the historical patterns of invention

for success

3 Concept selection—pick the best before investing

4 Robustness development—early achievement of reliability and

integrability

5 Technology readiness—don’t transfer any technology before its

time

6 Technology transfer—effective delivery to portfolio architecture

and the product pipeline

When each of these six steps is done well, innovation will be effective

In the current typical industrial practice at least one of the steps is not

done well, and the effectiveness of the innovation efforts suffers Often

there is great emphasis on the step of Concept Generation—the invention

itself—and the other five steps are undertaken cursorily or not at all

The core of this book is a chapter on each of these six steps, beginning

with the next chapter First we concentrate on the context for Effective

Innovation Even when the six steps are effective, commercial success can

easily be threatened by failures in the contextual activities Forewarned is

forearmed, so now we discuss the context for effective innovation

INTERACTIVE ACTIVITIES FOR EFFECTIVE INNOVATION

There are three critical interactive activities that greatly influence the

successful performance of Effective Innovation

The three important interactive activities are focused on three questions:

1 What latent needs are unsatisfied?

2 Which technology integrations are important?

3 What are the important market segments?

TECHNOLOGY

STRATEGY

CONCEPT SELECTION

ROBUSTNESS DEVELOPMENT

CONCEPT GENERATION

TECHNOLOGY READINESS

TECHNOLOGY TRANSFER

WHAT LATENT NEEDS AREUNSATISFIED?

The greatest opportunities for high-return innovation center around

unsatisfied latent needs Examples are Chester Carlson’s invention of the

xerographic copier and the Sony VCR Chester Carlson realized that there

was a huge latent need for a copier Most businessmen were confused

because the existing technology for making copies was terrible, so few

copies were made Therefore, businessmen who thought themselves

pru-dent dismissed the innovation for making copies because the financial

news didn’t report big revenues for copier companies The crucial fact that

the “prudent” businessmen missed was that there was a huge latent desire

for a machine that would make copies efficiently One specific aspect that

the “prudent” businessmen had overlooked was that the copies would be

good enough to be used as originals to make more copies Xerography

enabled an explosion in the number of copies that were made

When there is a large unmet latent need, its characteristics can be

summarized in a few characteristics Carlson brilliantly perceived the

three critical outcomes:

1 Dry process—the name xerography that was coined means dry

printing

2 Automatic process—push a button and get a copy

3 Good image quality—”the copy is better than the original” was

the amazed reaction to the Xerox 914 copier when it was

intro-duced in 1960

Another example is the Sony VCR Ampex, an American company, first

demonstrated practical videotape recording in 1956 Ampex thought of

the VCR primarily in terms of its use by professional recording studios

Therefore, their technology was big and expensive

At the same time RCA further demonstrated its loss of innovative

cul-ture At a meeting in the late 1950s, the company debated the question:

Can the Japanese possibly make a TV recorder for under $2,000

Sony saw that there was a large latent need for a VCR that was

suffi-ciently small and cheap that consumers could have one or more in their

home to play and record TV programs By meeting this latent need Sony

got the first-mover advantage for the important home VCR market

To be rewarding, effective innovation activities have to be aimed at

meeting needs that are important to customers The opposite of this is

the greatly feared “playing around in the sand box.” One of us (Clausing)

played a role in bringing Quality Function Deployment (QFD) into the

United States Can QFD be used to focus effective innovation on

tech-nologies that will benefit the customers and the enterprise?

Notice that Chester Carlson did not need QFD He wisely identified the

three characteristics that were critical to satisfy the latent need for

copiers The Xerox 914 featured these three characteristics, which led to

its phenomenal success When there are only three characteristics that

are critical for success, QFD is not needed to keep the team focused on

the requirements

When QFD is needed it is because of Miller’s Law Miller found that

humans can deal effectively with seven items in short-term memory The

obsolete ad hoc development process required its practitioners to juggle

hundreds of items in short-term memory This attempt to violate a basic

law of nature doomed the ad hoc approach to failure The purpose of

processes and methodologies is to avoid this failure by greatly reducing

the demands on short-term memory, and also to benefit from experience

However, Chester Carlson was not challenging Miller’s Law When the

latent demand is far from being met, only a few characteristics are

needed for the initial success

As an industry becomes more mature, a plethora of detailed

improve-ments are needed for competitive advantage Many of these still require

effective innovation Now some form of QFD can be helpful to focus

effective innovation Basic QFD is used primarily to guide incremental

improvements that don’t require innovation

Most innovation opportunities fall somewhere between the watershed

innovation of Chester Carlson and incremental improvements For the

vast majority of growth-innovation opportunities it is important to use the

subtle tools that are associated with QFD, especially contextual inquiry,

the Kano diagram, and the Master House of Quality (Cohen, 1995)

In bringing in the voice of the customer we focus on the outcome that

is desired by the customer We don’t ask the customer to innovate the

solution that will provide the outcome Rather, we learn how the

cus-tomer would like the innovation to affect him Then we can innovate a

solution that will have strong business potential This is the essence of

contextual inquiry Using the marketplace to focus effective innovation

on the rewarding opportunities is the subject of the article “Turn

Cus-tomer Input Into Innovation” (Ulwick, 2002)

WHAT TECHNOLOGY INTEGRATIONS ARE IMPORTANT?

Innovation often occurs at the level of subsystems and components

Leveraging this type of innovation with the best technology integration

is often critical to success Innovations add their greatest values as

inte-grated systems

All too often several innovations at the level of the subsystem and

com-ponents, each of which is brilliant in the eyes of their champions, are

integrated together with inadequate understanding They do not play

together elegantly, and the result is disappointing The broad strategic

aspects of this are well covered in the book Technology Integration

(Ian-siti, 1998)

An example of one type of Technology Integration failure was

reported by Henderson and Clark (1990) for the optical-aligner

indus-try These aligners are used to align the photolithographic components

in the production of microchips The architecture had four major

changes, and the company that had been the previous leader lost out in

each change Leadership went from Cobilt (contact aligner) to Canon

(proximity aligner) to Perkin-Elmer (scanning-projection aligner) to

GCA (stepper aligner, Gen 1) to Nikon (stepper aligner, Gen 2) The

basic components of the aligners remained the same, with incremental

improvements, throughout these changes

The primary innovations were in the interfaces between the

compo-nents The previous leader always failed to appreciate the new

signifi-cance of these interface innovations The improvements in the interface

technology were called architectural innovations by Henderson and

Clark They contrasted this with component innovations The previous

leaders who lost out when the new architectural innovations were made

still had good component technology, but it was not integrated in the best

way The TRIZ perspective on the technical aspects of this problem is

presented in Chapter 3

Henderson and Clark found that the failure to appreciate the

signif-icance of architectural innovations was associated with the typical

organizational structure Each company had good component teams, but

inadequate attention to the interfaces They looked at the new architectural

innovations and concluded that the components were not innovative, so the

new competition could not be a big threat In the traditional organization,

inadequate attention was paid to the interfaces The process of overcoming

these organizational problems is discussed in Chapter 9

Some of the difficulties of technology integration are due to failures of

technology readiness Overcoming of these difficulties is covered in

Chapter 7 of this book

WHAT ARE THE IMPORTANT MARKET SEGMENTS?

Sometimes good innovation does not ensure business success because it is

not applied to the best set of market segments A strong example is that of

disk drives, which have been well described in the book The Innovator’s

Dilemma (Christensen, 1997) In the early days of disk drives the storage

density (information per unit area) was small, and so the battle was to

increase the storage density After a while this became a straightforward

march up a curve similar to that of Moore’s Law Storage density steadily

and rapidly increased, which opened up an opportunity to create new

mar-ket segments by making new trade-offs among product characteristics

Some disk-drive producers maintained their focus on maximum total

storage capacity They thought only of the customers who needed the

maximum storage

Other enterprises saw opportunity The storage density was now so

large that some total capacity could be traded off to achieve smaller size

and much lower cost This fit the needs of the users of smaller

comput-ers The companies that did not recognize this opportunity suffered in

the marketplace

BARRIERS TO BEWARE OF

In the previous section we discussed the three interactions that can

affect the performance of Effective Innovation itself Beyond that, there

are barriers to total success that can block the successful results of

Effective Innovation from achieving commercial success If any of the

other elements of product acquisition or the other enterprise processes

are weakly done, the high-potential new technology that has been

suc-cessfully developed during Effective Innovation will be blocked from

success in the market Here, we give a few case studies to illustrate the

role of collateral innovations

In 1765 James Watt made a huge improvement to the Newcomen engine,

which had been the dominant steam-engine technology for 50 years

Watt added a separate condenser, which reduced the coal consumption

by 75% This huge improvement changed the steam engine from a device

that was economical in only a few applications to a technology that

brought economical advantage in many applications, and powered the

industrial revolution

However, initially Watt was hampered by problems of the supply chain

and the enterprise infrastructure (integration and direction) He had

nei-ther, and did not tend to personally be strong at either

The number-one production problem was the difficulty of boring the

cylinder with precision that was sufficient to enable the steam to be

sealed By good luck Wilkinson had just invented an improved boring

mill Furthermore, he wanted an engine for his factory That solved the

major production problem

The remaining production problems and the infrastructure problem

were overcome by Watt’s alliance with Matthew Boulton Boulton was

a leading manufacturer of the time Also, he was good with politicians,

and was able to secure a 25-year patent extension Without the latter,

the economics of steam-engine production probably would not have

appealed to Boulton

So we see that Watt’s invention was able to become a huge

commer-cial success because major changes in the supply chain and enterprise

infrastructure became available to Watt

Chester Carlson found existing scientific effects, and integrated them

into an architecture that did dry imaging The photo-optical material had

to be greatly developed, and it was 22 years from conception to the first

office copier

The manufacturing cost of the early copiers was very high, which

caused a potential problem Office workers were not accustomed to

mak-ing copies Would office managers be willmak-ing to buy an expensive

machine to do work in a new way? Here Xerox made a collateral

inno-vation in sales and marketing by leasing the copiers This gave potential

customers the opportunity to try the new technology without paying a

large amount of up-front money

CANONCOPIERINTRODUCTIONINTO THE UNITED STATES

In the early 1970s, the primary Xerox patents were starting to expire

This led to discussion within Xerox as to what the new competitive

envi-ronment would be like It was recognized that some Japanese companies,

such as Canon, were making good small copiers for the Japanese market,

and were potential competitors in the United States

However, the Xerox executives were confident that they could easily

defeat any threat from Canon: Xerox had a strong sales and service

orga-nization; Canon had none for copiers in the United States, which was

seen as a hurdle that Canon could not overcome

Canon developed a very clever strategy by designing a copier with all

of the frequent- service items in one module that could be easily changed

by the user Then they sold their copiers through dealers They didn’t

need a strong sales and service organization Xerox’s market share of

small copiers went from 80% to 8% in four years

CYLINDER-VALVEPAVINGBREAKER

When I (Clausing) was a young engineer, I worked on a new paving

breaker that technically was a radical departure from the previous

tech-nology Both the old and the new paving breakers were driven by

com-pressed air, but otherwise they were very different

When we started our project an analysis had shown that if the paving

breaker worked as it was intended to function, it would take a 180-pound

downward force from the operator to hold it down Obviously no one

could push down so hard for very long The old-timers scoffed that it

showed the analysis was not worth much

Lo and behold, experiments proved that the analysis was correct! The

average operator only provided half or less of the necessary force The

breaker compensated by hitting just one solid blow out of three

Armed with this knowledge, we designed and developed a new breaker

that hit only half as many blows per minute, but each blow was very

effective We also designed in a vibration isolator and an exhaust silencer

The operators loved it because it was easier to hold and much quieter—

and it broke concrete much faster

Naturally it was a big commercial success, right? Wrong The sales

department was not ready for a radical departure All existing breakers

looked and performed the same The salesman got orders by giving the

best whiskey as a present Confronted with a new technology that would

require a change in their selling mode, the sales organization simply dug

in its heels

So technological innovation was rendered ineffective by failure to

make the necessary collateral innovation in the enterprise process of sales

and marketing

LESSONSLEARNED

If Watt had not obtained help on supply chain and enterprise

infrastruc-ture, we would never have heard of his great new technology If Xerox

had not made the sales and marketing innovation to lease their copiers,

Carlson’s invention would have languished Canon made a great success

by coupling the effective technical innovation with innovation in

mar-keting and sales to circumvent the great Xerox advantage The

cylinder-valve paving breaker was not a commercial success despite its great

technical superiority, because sales and marketing did not make the

nec-essary innovation in their process

These critical innovations in other enterprise processes are beyond the

scope of Effective Innovation, and thus beyond the scope of this book

Our advice is to be alert, and exercise your influence to the maximum to

ensure that the necessary collateral innovations are being developed so

that external barriers to the commercial success of the superior

techni-cal innovations are avoided We will say a little more about this in the

chapter on management, Chapter 9

Excellent innovation is done by a six-step process, which will be

described in the core of this book

For effective innovation to pay off, it is important that all of the

con-textual activities be done well Excellent innovation can be irrelevant if

the focus is on unimportant needs, poor technology integration, and/or

bad market segmentation However, these pitfalls are widely recognized

and have been much written about

In this book we concentrate on effective innovation itself This is the

hard core on which all else is based In nearly all current innovation

activities there are major opportunities to improve the six steps of

inno-vation We start in the next chapter with technology strategy

Technology Strategy: Choosing

Directions

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