2011 Power To Innovate - Where to Innovate In This Economy

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Jim Belfiore, Certified Innovation Master

Sr. Director of Client Innovation and Practices

Invention Machine

Where to Innovate in This Economy

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Definition: Where

w here : [hwair, wair]

adverb:

• in or at what place?:

Where is he?

• in what position or circumstances?:

Where do you stand on this question?

• in what particular respect, way, etc.?:

Where does this affect us?

• to what place, point, or end? wither?

Where are you going?

• from what source? whence?:

Where did you get such a notion?

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Where Do You Stay Informed?

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Staying Informed in Science & Innovation…

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Staying Informed in Business & Innovation…

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Staying Informed in Finance and Economics…

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Where Have We Been?

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Back in 2008…

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Back in 2008…

• “When do you innovate?”

„When we have time‟

„When we have budget.‟

„…in response to a crisis.‟

• Looking towards 2011…

The real crises have just begun

The impacts to your lines of

business and innovation strategies

will be swift and profound

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Where Are We Now?

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Innovation is Driven By Need

“Innovation must meet a consumer need - the consumer must be willing to part with their money for it, and it must provide value to both us and the customer.” - A. G. Lafley, CEO, October 5, 2010

All of us in this room are impacted by the needs (and health) of consumers of every type

Government, Corporate, Individual

Understanding trends in 2011 will be more important than in any

previous year

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Government Trends are Astronomical…

• We’re increasing deficit spending

• U.S. debt crossing $14 Trillion

If each dollar of debt was a star, we’d now owe 140 galaxies

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Corporate Trends are Harder to Spot…

One statistic speaks for itself…

Source: Bloomberg - October 14, 2010

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The Consumer is a System

• Just as with any product or process design, the consumer is a system that is comprised of many interacting parts, and external environments that can convey positive or negative effects

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Consumer Trends are not looking so good…

• Higher unemployment

• Fewer jobs

• Less disposable income

• Increased debt

• Lower purchasing power

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Consumer Trends are not looking so good…

• Higher unemployment

• Fewer jobs

• Less disposable income

• Increased debt

• Lower purchasing power

• Less mobility

• Poorer diet

• Decreased health

• Greater crime risks

• (Hyper)inflation?

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Where Are We Going?

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Everything is Rapidly Evolving

• Tomorrow’s service and manufacturing leaders will succeed because of rapidly evolving:

Global supply chains

Modern finance

Government policies

Population demographics

Information ecosystems

Geophysical transformations

Natural

Synthetic

• In today’s world, there’s no place left to hide.

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Innovation is No Longer About…

• Making small improvements in existing products

• Gaining single-digit market share in a crowded space

• Re-inventing a brand

If it is, then I’ve got a new product announcement

Radical Innovation must be your 12-mth survival plan

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Innovation for Survival Means…

• Making generational leaps on a rapid schedule

Knowing your S-curves

and how to navigate them

• Business Model Innovation

Re-inventing your existing

products’ value propositions

through New Market Analysis

Discovering (and dominating) new markets

that are outside of your core competencies

which align to your value and growth

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Innovation for Survival Means…

• Obsoleting:

Your Products

Your Services

Your entire industry

• If you do your job right, you’ll put yourself, and your competitors out of a job (at a nice profit)

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Constraints are Key to Radical Innovation

• In 2008, I told you:

Look for conflicts,

tradeoffs, or compromise

When you find the box, you’ll

drive high-value innovation

• Good News / Bad News

Good News: We are all going to be surrounded by rapidly

increasing compromise and conflicts in our respective markets

for the foreseeable future

Bad News: (See, “Good News”)

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(Consumer) Constraints Apply to Everything

• Cost (lower cash-flow)

Not going to spend as much

when cash / credit is

available

• Lifecycle / Function

“Pent-up demand” is, at

best, unpredictable

Products at all price-points

will be working longer & harder

• Supersystem Trends

Increasing impacts of Energy, Transportation, Environment, Food,

Policies, etc.

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Where Would Innovation Happen?

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Aerospace (Civilian)

• Challenges:

Environmental Pressures

Upper S-Curve Plateau

Industry Volatility (Fuel)

• Innovation Opportunity:

Complete re-think of

fuselage design; targeting of

non-passenger constraints

Constraints: Fuel Consumption,

Environmental Impact (Sound,

Emissions)

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Aerospace (Civilian)

• Case Study: N+3 “Double Bubble”

180-Passenger (B737 class)

double fuselage design

“Boundary Layer Ingestion”

(slow-speed top-side air intake)

70% less fuel, 75% less NOx emissions

Phase 2 underway

Market entry: 2035

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Energy

• Challenges:

Hydrocarbon (Production / Supply)

Most alternatives obsolete only the fuel,

bringing new problems along for the ride

Existing HC fleets / infrastructure

• Innovation Opportunity:

Disruption of manufacturing

methods for current (high-demand)

fuel products

Constraints: Cost, Resources,

Environment

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Energy

• Case Study: Joule BioTech

Bioreactors: Artificial Microbes

Consume Sunlight and CO2

Produce Ethanol and Diesel

20,000 Gallons / Acre / Year

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Electronics / Automotive

• Challenges:

Accelerated introduction of

transformational commodities

Fundamental shift in

transportation power plants

Critical, exponential dependency

on rare-earth materials

Finite, geo-politically volatile

• Innovation Opportunity:

Find RE-free, high-anisotropic

materials; RE recycling; NPM

Constraints: Cost, Form Factor, Supply Chain

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Electronics / Automotive

• Case Study: ARPA-E

High-Energy Permanent Magnets Project

New technologies to double power densities

Expand market from $7 billion to $20 billion

in 10 years

• Case Study: Tesla Motors

RE-free induction

motor

245 miles / charge

0-60mph: 3.7 sec

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Medical

• Challenges:

Rising costs:

Manufacturing / Delivery

Disease State

Treatment Efficacy

Regulation / Policy

• Innovation Opportunity:

Develop products that

eliminate life-critical needs (devices / procedures / pharma)

long before the end of current (product / services) lifecycles

Example: Drug-Eluding Stent

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Medical

• Case Study: Nanoburrs

Revolutionary combination

of drug-delivery biophysics

and pharmacology

Wide applications

Coronary disease

Cancer

Endoskeletal

Changes the game in

disease-state management

in the next 2-5 years

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Where Should You Innovate?

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Communities of Innovation

• The single inventor is a myth

The path from concept to commodity

involves many people

In Innovation, there is no evil genius

• Two essential questions:

“Has this already been done?”

Freedom to operate tells you

the size of your neighborhood

“Who’s doing anything like this?”

Turn k(now)-how, into k(now)-who

Share your Problems / Use the Expert Finder

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Business Model Innovation

• Problem:

Increasing invasion of new and

disruptive business models

Typical response is to adopt

the new business model alongside

new competitors

Many companies are unsuccessful at

simultaneously managing and

integrating multiple business models

• Typical Solution: Business Unit Separation

Often leads to failure

Key considerations need to be researched before innovating a

competing business model

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Business Model Innovation

• Assess “Market Attractiveness”

Examine the new market for:

Size, Growth

Demographics, …

• Examine your own organization

Core Competencies:

Do your core competencies

apply to the new market

in a unique way?

Can your core competencies

“disrupt a disrupter”?

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Business Model Innovation

• (Re)Assess the Value Chain

Are the potential new customers

representative of an entirely new

market?

Are the potential new customers

just a new segment of an existing

business model?

…

• Invention Machine Goldfire’s Tasks are Uniquely Suited

Research, Find and Disrupt New Markets

• Obsolete Yourself, Everyday

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Business Model Innovation

“If you make a widget that has become dominant in the marketplace,

work on getting rid of it now. If you don't…you‟ll find yourself playing

your competitor's game.”

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Where Next?

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Your Innovation Goal is K(now) Where

• Knowledge is the first step

Staying informed is essential

Past, Present, and Future

• Trends are critical insights

Know where changes are leading

Demographics, Landscapes, Supersystems, …

• S-curves are more than wavy lines

Know where your products

are along the ideality curve

Know what the next generation

looks like…today

Goldfire facilitates effective research

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Your Innovation Goal is K(now) Where

• Radical Innovation will become the norm

Flat or small growth won’t cut it

Obsolescence must be planned out, not in

• K(now) constraints

Recognize, embrace, and innovate

Opposing traffic always drives in the passing lane

• K(now) boundaries…and use them

Figure out the game changers, then

track them

Were you disrupted today?

Use Goldfire to research expertise, and

innovate new business models

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Where Are You?

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Where Do You Want To Be?

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

Jim Belfiore, Certified Innovation Master

Sr. Director of Client Innovation and Practices

Invention Machine

Where to Innovate in This Economy

P O W E R T O I N N O V A T E | O C T O B E R 2 5 - 2 7 2 0 1 0 | B O S T O N , M A

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