Wednesday, March 24, 2010

Innovation Leap Frogging


This blog discusses the value of Innovation Leap Frogging and what the manufacturing sector can do tomorrow morning to think outside the box and reinvent your future. Practical proven tips are outlined - all with the vision of helping Canadian manufacturing companies to take a leadership position with renewed energy and results. It is all about reshaping what we think we see.


When I was growing up I loved to play with frogs. They were a passionate pastime in rural Alberta that I have fond memories of. One of the innate qualities of being a frog is you never fear hopping forward when confronted with a new challenge. Frogs persistently rethink the patterns of play in all directions. No leap in any direction is too much of a stretch to a frog. We stress in business the increased need for resilience, agility, increasing innovation capacity and managing risk all in one breath. We need to remember what leapfrogging is all about and remember the great stories of success in the manufacturing sector. Let's not forget what Lockheed did that we can also still learn from as we create our future together.

The pattern of leapfrogging is a well researched concept in the business world and in the field of innovation. One of the most fundamental requirements is to invest in your workforce so you tap into the power of your people- helping them to stay connected and learn the power of collaborating effectively. People make remarkable things happen within organizations. Leapfrogging won't be found in the latest IT gadgets - they help for sure, but the ideas start with your people and their execution confidence they will be supported. The root of leapfrogging health lies in trust. A short word that has root systems that will either help a company grow or simply wilt slowly away. Too many companies we consult and work with have missed this root system complexity and are afraid to tackle this head on. Without trust embedded in leadership systems, human DNA is weakened... so

Step back and ask yourself three questions:

1.) What is your innovation people inspirational plan to LEAPFROG your company forward?
2.) How can your customers, partners, and employees develop your LEAPFROG plan?
3.) How do you measure up in the Leapfrog Innovation Assessment Test Question? (How strong is trust and confidence in your organization's human performance systems - do you know?)


Thinking and Innovating differently has to start with a LEAPFROG Plan. In the manufacturing sector - Let's not forget the great story of Lockheed and its Stealth Revolution

In the 1950s, Lockheed was a relatively minor player in conventional fighters and bombers; its major product was the F-104, sold to the Air Force. After the F-104, Lockheed continued to try to get mainstream development contracts for conventional military aircraft, but for more than two decades, it failed. Meanwhile, Lockheed started to focus on developing top-secret, highly specialized, reconnaissance aircraft. Eventually, it developed the SR-71Blackbird spy plane using stealth technology. Throughout the '60s, it continued to develop its expertise in covert reconnaissance aircraft using stealth technology.

Starting in the 1970s, the Air Force and the Department of Defense became increasingly interested in stealth technology for use in a broader range of combat aircraft. In 1974, competitive study contracts to develop design concepts for a stealthy combat aircraft were sent to Northrop, McDonnell-Douglas, General Dynamics, Fairchild, and Grumman. All but Fairchild responded. Lockheed was originally omitted from the competition because Pentagon officials were not aware of certain work Lockheed had done on a classified CIA project.

After joining the competition, Lockheed's engineers submitted an extremely unconventional design nicknamed the "Hopeless Diamond." McDonnell-Douglas, one of the dominant manufacturers of combat aircraft at the time, produced a variant of one of its previous designs. Pentagon officials realized that Lockheed's design was a revolutionary one with the potential to produce an aircraft with unparalleled stealthness. Lockheed and Northrop (also a small niche, stealth player which gained its experience in stealth technology through in-house study efforts launched in the 1960s, and used that experience in technology for lightweight export fighters) were the two contractors selected to develop the ideas further. Lockheed was awarded a full-scale development contract for the subsonic stealth fighter-attack aircraft later designated the F-117. This aircraft was used to great effect in Desert Storm and is currently being used over Kosovo.

The design for the successful F-117 was a gigantic leap forward in technological innovation. The design was so revolutionary and so risky that a dominant firm most likely would not have attempted it; only a firm hoping to break into the market would have taken such risks. Even within Lockheed, some counseled that the revolutionary design was too risky. Walter J. Boyne, in his book Beyond the Horizons: The Lockheed Story, explains that Lockheed's chairman, Bob Haack, "...would have to think long and hard about funding a costly project that might not prove out."

But, as Boyne concluded, by scraping the financial cupboard almost bare, they managed to provide [the money for the design], at a time when Lockheed's finances were near their lowest ebb. This showed remarkable insight and courage on the part of upper management, just recovering from the long siege of anti-Lockheed publicity. They took grave risks when utter conservatism was a safer choice; and they did so because they knew Lockheed needed to begin selling aircraft to the government again.

Without Lockheed's innovative design, a strategy designed to move the company out of its niche, the stealth revolution would not have been nearly as successful.

Having established itself as a player, what happened to Lockheed? At the request of the Air Force, and because of the extensive knowledge and experience it had with stealth technologies, it went on to build the F-22 Stealth Air Superiority Fighter. Building upon and refining its work on the F-117 plane, Lockheed teamed up with General Dynamics and Boeing and was selected in April 1991 for full-scale development of the aircraft. The F-22 is expected to be the premier Air Force air-superiority fighter well into the 21st century, partly because of its design and partly because of the high-quality industrial team.

So, at the beginning of the stealth revolution, when Lockheed was a niche player, it took a huge risk with its "leap-frog" innovation, which resulted in the radical design of the F-117. Later, as Lockheed became one of the market leaders in stealth technology, it focused on improving its core skills of stealth technology and developed the incrementally innovative F-22 design. Both planes were innovative, but in different fashions. The success of the F-117 radically altered the status quo. It undercut the previous market leaders' dominance and made their expertise in certain fields irrelevant. The F-22, while also innovative, reinforced Lockheed's position as the market leader in advanced combat aircraft.

Lockheed's story illustrates the importance of diversity in innovations and the principle that "the most fertile soil for innovation is a rich loam of differently situated firms." Indeed, diversity and variety are key to maintaining and promoting innovation in a market. While I've focused here on size of firms and market position, other forms of diversity exist that can enrich the generation of innovation, such as R&D joint ventures, vertical relationships, and collaborations between large and small firms.

Research Source: Leap Frog and other Forms of Innovation: Protecting the Future for High Tech and Emerging Industries, address excerpts from Constance Robinson, US Department of Justice (1999)

Tuesday, March 23, 2010

49% of Global Executives unlikely to increase prices in 2010

49% of Global Executives Unlikely to Increase Prices in 2010, Survey Says completed by SAMPRAD, Business Development Advisory and Pricing Strategy Consultants.

Buoyant outlook for markets yet cannot increase prices

Venugopal Chepur, the author of the study, explains that while hoping for buoyant market conditions, about half the respondents said they would be unable to increase prices this year. Of the 171 Senior Marketing and Global Senior Management Executives surveyed, 49 percent reported it was unlikely that they would increase prices during the current year 2010.

Only 16 % were sure about increasing prices while 24% were likely to consider the proposal for price hikes, and the rest 11% were not sure.

Greater concerns about Economy, Inflation, a range of responses:

- Nearly 47% reported they would increase prices owing to Inflation (Fuel hike, Cost of Funds etc);
- 22% gave "increase in demand" due to flat or short supplies (bottomed out inventories) to be likely reason to increase prices;
- 20% felt there may be a decrease in demand for goods & services during the year;
- Only 10% cited Increase in Buying Power (Ease of Credit, Employment, Buoyant markets etc) as reasons to be able to increase prices.
- Adding features & benefits to hold or increase prices work much better than removing features to hold or lower prices.
- 40% reported they would upgrade their offerings to avoid discounts and about 26% felt they could hold prices with temporary discounts;
- 16% of respondents would try bundling of products & services to hold or increase prices, while less than 5% said they would decrease prices during 2010;
- Less than 10% would remove features & benefits in order to hold prices and about 12% cutting costs and adjust price terms
- 77% of do not use Pricing Software and Pricing Consultants
- 77% have reported that they neither use any pricing software, nor have external pricing specialists/consultants guiding pricing decisions.
- Only 10% have both, and just over 6% have either pricing software or a pricing consultant.

Survey Participants were Executives representing both B2B and B2C segments in US and Global including emerging markets.

Participating executives constituted both B2B (53%) and B2C (47%) segments in US (57%) and global (39%) including emerging markets. Most were members of MENG (Marketing Executives Networking Group – a premier US national network of top-level marketing executives, and IERG (International Executive Resources Group – organization of Senior Business Executives from around the world).

Monday, March 22, 2010

What will our world look like in 25 Years?

How will the world look like in the future 25 years? Some very insightful perspectives are summarized below.

1. Everything you say and do will be recorded by 2030. By the late 2010s, ubiquitous, unseen nanodevices will provide seamless communication and surveillance among all people everywhere. Humans will have nanoimplants, facilitating interaction in an omnipresent network. Everyone will have a unique Internet Protocol (IP) address. Since nano storage capacity is almost limitless, all conversation and activity will be recorded and recoverable. -Gene Stephens, “Cybercrime in the Year 2025,” July-Aug 2008, p. 34

2. The cars days as king of the road may soon be over. More powerful wireless communication that reduces demand for travel, flying delivery drones to replace trucks, and policies to restrict the number of vehicles owned in each household are among the developments that could thwart the automobiles historic dominance on the environment and culture. If current trends were to continue, the world would have to make way for a total of 3 billion vehicles on the road by 2025. -Thomas J. Frey, “Disrupting the Automobiles Future,” Sep-Oct 2008, p. 39 et seq.

3. There may not be world law in the foreseeable future, but the world’s legal systems will be networked. The Global Legal Information Network (GLIN), a database of local and national laws for more than 50 participating countries, will grow to include more than 100 counties by 2010. The database will lay the groundwork for a more universal understanding of the diversity of laws between nations and will create new opportunities for peace and international partnership. -Joseph N. Pelton, “Toward a Global Rule of Law: A Practical Step Toward World Peace,” Nov-Dec 2007, p. 25

4. Professional knowledge will become obsolete almost as quickly as it is acquired. An individuals professional knowledge is becoming outdated at a much faster rate than ever before. Most professions will require continuous instruction and retraining. Rapid changes in the job market and work-related technologies will necessitate job education for almost every worker. At any given moment, a substantial portion of the labor force will be in job retraining programs. -Marvin J. Cetron and Owen Davies, “Trends Shaping Tomorrows World, Part Two,” May-June 2008, p 41

5. Urbanization will hit 60% by 2030. As more of the worlds population lives in cities, rapid development to accommodate them will make existing environmental and socioeconomic problems worse. Epidemics will be more common due to crowded dwelling units and poor sanitation. Global warming may accelerate due to higher carbon dioxide output and loss of carbon-absorbing plants. -Marvin J. Cetron and Owen Davies, “Trends Shaping Tomorrows World, Part One,” Mar-Apr 2008, p. 52

6. Trending insights for reflection predicted by Cisco Systems Inc. futurist Dave Evan. In five years we’ll be creating the equivalent of 92 million Libraries of Congress worth of data a year, in 20 years artificial brain implants will be available and in 25 years robots will replace all workers. “It behooves those organizations and individuals and governments to really get this and embrace this,” he warned. “This is a fundamental shift in how we as a species will operate forward.”

Other Trending Insights – Things we know and don’t know:
  • Things are no longer growing at a linear rate. Because of the law of large numbers things are accelerating at an exponential rate.
  • The world’s data will increase six times in each of the next two years – including corporate data multiplying 50 times a year.
  • So by 2029 we’ll pay a mere US$100 for 11 petabytes of storage.
  • By 2013, wireless network traffic will reach 400 petabytes a month, compared to the 9 PB a month that flow today through both wired and wireless networks.
  • Moore’s Law, the dictum that the number of transistors that can be put on an integrated circuit will double roughly every 18 months, will be extended “for some time,” despite fears that the limits of reducing silicon will be reached soon. It will – around 2021.
  • By then, a breakthrough in quantum computing will make “mind blowingly fast” computers that will allow instantaneous language translation and machines that recognize faces that think and networks that can transmit an unlimited amount of data any distance
  • Each of us may have a virtual assistant – a digital creation with feelings – taking over the drudgery of online tasks like going through our inboxes and monitoring e-Bay auctions.
  • Because “data does not equal knowledge,” intelligent machines will be put to use mining those mountains of digital files, videos and music we’ll be storing to help us make smart decisions about our lives.

Sunday, March 21, 2010

Innovative Blogs in Canada

There are many active bloggers in Canada. Some of the blogs I find of particular value and interest are:

Mark Evans Tech blogger: Mark Evans

Rob Hyndman Law & Tech
blogger: Rob Hyndman

Telecom & Tech Trends
blogger: Mark H. Goldberg

Tech and BioTech
bloggers: MARS

Law Blog
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