Archive for the ‘Tools & Techniques’ Category

Physical vs. Virtual Colocation, and the Effects of Interruption

Monday, October 5th, 2015

Officially, “colocation” is the proper spelling, but “co-location” and “collocation” are also recognized spellings. Regardless of how you spell it, it boils down to the science of communication probabilities and qualities between individuals.

Tom Allen, at MIT in the late 1970s, put the first benchmark on the table. He found that the probability of communication depended on whether any two people had any common organizational bonds, such as working in the same department or on the same team. He called this “intra-group” communication; otherwise it was “inter-group.”  If people sat more than 10 meters from one another, there was only a 5% chance of inter-group communication and a 10% chance of intra-group. Unless people sit close to each other, they rarely communicated.

By the early 1990s, while videoconferencing, the Internet, and email were emerging, a study conducted by GGI found 300 companies examining roughly 50 distinct approaches to simulating colocation. A new industry was developing to facilitate effective colocation regardless of physical distance. Since then, a myriad of “solutions” have entered the marketplace.

Alas, the enabling technology has advanced more quickly than its target audience’s behavior. If one examines the relationship of individuals to their work assignments and locations, individuals have not changed significantly since 1930 studies driven by unionization efforts. Individuals without systemized and policed corporate policies still largely behave as they did 80 years ago with regard to the task in front of them.

Physical vs. Virtual Colocation, and the Effects of Interruption [Machine Design – October 2015] discusses several studies conducted in the past ten years that explore the differing workplace environment for physical versus distributed workers and the effects of interruptions on individual and corporate productivity.

TRIZ: A Best-In-Class Innovation Tool

Saturday, July 25th, 2015

TRIZ, a systematic innovation technique developed in Russia, whose acronym is loosely translated as “Theory of Inventive Problem Solving,” is based on an analysis of the inventive attributes of several hundred thousand patents.  Evolving since the 1950s, the body of knowledge was codified and documented by the 1980s.  It was first translated into English in 1992.

Like mathematics, where two plus two always equals four, the inventive attributes of patents are timeless.  Several companies, in very recent times, have repeated and expanded the analysis of the original inventor without any significant changes to Genrich Altshuller’s original findings.  Now deceased, several global organizations continue to nurture and espouse his TRIZ frameworks.

GGI researched some 300 innovation tools that are available to practitioners today.  Not a surprise, the USPTO web site was the most cited tool being used by companies in North America. TRIZ emerged as the second most popular innovation tool in use today.

TRIZ Plus – A Modern Tool for Enhancing Design Innovation , was written by Doug Hoon in his blog on Machine Design’s web site. He describes some of the key attributes and benefits of the methodology, and cited some of GGI’s research findings on TRIZ.

Planning For Intellectual Property Revenues

Tuesday, July 14th, 2015

Not too many years from now, business and program planners will have a new challenge when preparing a product or business plan.  Since the dawn of the Industrial Age, the state of practice has been to estimate an ROI by forecasting product revenues and profits.  Soon, product and business plans will contain two forecasting spreadsheets.  There will be the section on product revenues and profits that we are all familiar with.  And, there will be revenue and profit forecasting for IP.

Work on financial liquidity and monetization of IP began in the 1990s.  Baruch Lev at NYU is often credited with lighting the torch.  Let’s define financial liquidity as the ability to more easily transact IP in the marketplace as a commodity.  Let’s define monetization as the ability to assign a dollar value to a block of IP, and the rate that the initial value depreciates over time.  Liquidity and monetization are different challenges.  One requires a marketplace(s) capable of transacting assets, commodities.  The other requires the ability to assign a recognized value that can be generally agreed.  Just to pronounce the point, some day we might see certain types of IP traded like gold, silver, and soybeans.  The market would have much less volume, but the principles would largely be the same.  So how do we get there?

Financial Liquidity:  Markets are already in development [Figure 1].  There are a number of them and they are all emerging.  Who knows the ones that will stand the test of time.  And, the new ones are certain to emerge.  Right now “scouting firms,” “innovation intermediaries,” “ip auctioneers,” and “crowdsourcing companies” all stand to be market makers.  There are a handful of others.  The front half of industry is engaged in testing the waters at some level.  It typically takes about half of industry to be active before software developers start generating applications to manage new activities.   Software began to emerge at an increasing rate the past couple of years.

Figure 1
Percentage of Companies Currently Utilizing One or More IP Markets

 Percentage Of Companies Currently Utilizing IP Markets

Monetizaton:  Quietly, over the past twenty years, there have been committees and groups studying the merits of actually putting IP assets into financial statements.  A partial list reads like alphabet soup, but you’ll probably recognize them:  SEC, COMEX, FASB, and NAA.  Their goal is to be able to assign a value to a block of IP such that it can be treated like a new furnace or truck or mainframe and placed on the balance sheet as an asset and depreciated.  To meet generally accepted accounting principles, both a depreciation rate and a liquidation value would have to be determinable.  It is not necessary for all this to be worked out before the market can become liquid however, but some level of progress is necessary to determine ranges of salable values.  The accountants are currently paying attention to transacted values today that are agreed by a selling and buying entity.  After thousands of transactions occur in the years ahead, there will be enough data to assign some standard values.  There is great argument however.  Many do not want standard values.  Companies may lose their ability to negotiate premiums for their prized jewels.

Planning for Intellectual Property Revenues [Machine Design – July 2015] discusses the inevitable advancement of IP into the everyday business planning and decision making processes associated with new products. The article concludes with a bit of stretch thinking.

Measuring Product Development Vitality

Wednesday, April 29th, 2015

One of the things that satisfy engineers and product developers the most is to see their newly released products sell like hotcakes.  It goes right to the core of why they pursued careers in science and engineering, to create things that better the lives and capabilities of others.

One of the things that satisfy finance and business professionals the most is to see the products they decided to invest in become successful.

One of the things that satisfies investment bankers and brokers the most is to see companies with a continual stream of winning products year after year.

Perhaps these are the reasons why a metric that did not exist before 1988 is now the number one corporate R&D performance metric in North America.

Most of us know the metric as “New Product Sales,” or “Revenue Due To New Products,” along with a myriad of other names.  What they all strive to measure is the “newness” of annual revenues.  The actual value of this key performance indicator [KPI] differs greatly by market, by the length of product lifecycle, and by the age of the company.

Published on Product Design & Development Magazine’s Product Design & Development website, Measuring Product Development Vitality examines the evolution and the industry adoption rates of this metric since its inception in 1988.  The article explores differing definitions of the metric, differing definitions of how companies classify a product as being “new” or “old,” offers benchmarks for industry values when a new product is defined as being less than three years old, and discusses consequences when companies try to game the value of the metric.

Press Release: 12th Summit To Focus On Advances In Corporate R&D Innovation & Intellectual Property Strategy

Friday, March 6th, 2015

NEEDHAM, Mass. — (BUSINESS WIRE) — February 23, 2015 — Corporate demand for specific strategies, tactics, techniques, tools, and software to bolster Corporate Innovation have steadily increased for fifteen years.

As corporate demand grew, large think tanks and research firms studied what was working. Solutions providers, Makers, and service firms entered the market as money could be made. Like all emergent markets, many initial offerings had a high fall out rate. While still the case, certain approaches are producing financial results and initial patterns of success are apparent.

Intellectual Property [IP] strategy and management, both by itself and aided by the pull from increasing levels of corporate innovation, has also matured. Starting a few years earlier than innovation, circa the technology boom of the 1990s, companies sought to trade, barter, license, purchase, and sell IP at greater levels than any prior time in history. As the IP market grew, suppliers emerged to meet the increased demand.

Successful IP enablers are also beginning to sort themselves out. Corporate abilities to identify, value, and transact IP will soon approach corporate abilities to identify, price, and sell winning products.

The R&D-Product Development Innovation Summit, last held in 2012, offers an update on the evolution of the Corporate Innovation and IP bodies of knowledge. Much changed during the Great Recession. Companies really had to focus to generate good business results in an increasingly normalized, globalized, and economically challenged competitive landscape.

This fact driven and data intensive event, targeted to CXOs and corporate leaders, draws on findings from over fifty secondary research sources along with primary research sources on both subjects.  GGI’s sixth industry study since 1998, found notable shifts in the strategic management of R&D and in processes for Organic InnovationOpen Innovation is on the rise.  Patent and Trade Secret practices are changing.  The ability to determine the value of, and then to monetize IP, is maturing.  And, the metrics corporations use to measure R&D and IP output and productivity are now primarily focused on business results.

Produced in conjunction with The Management Roundtable of Waltham, MA, this Summit holds the content to empower executives with the state-of-the-state knowledge needed to lead innovation and IP improvements in their companies.

Why The Innovation Revolution?

Tuesday, February 24th, 2015

Just about every company, since the Industrial Revolution began in the late 1800s, has wished to improve its level of innovation.  How to be a better innovator has been a subject of study for decades.

It was not until the early 2000s however, that collective industry demand for “better innovation” reached a level so as to spawn a revolution in the slowly evolving body of knowledge.  Why then?  Many factors contributed.

In the early 1980s, industry began shifting from a focus on manufacturing and operations excellence to a focus on R&D and Product Development excellence.  The first articles on competing through product development excellence appeared in 1983.  In 1986, Robert Cooper introduced the first “Stage-Gate” framework in his book “Winning On New Products.”  Initially designed to improve “over the wall” from engineering to manufacturing, the framework rapidly evolved to be an end-to-end process from concept to customer.  With an end-to-end framework now available to all industries, the time compression and/or Time-To-Market quest began.  By the late 1990s, some companies were moving so fast that they were losing potential ROI by replacing their own products too quickly.  As a result of the extreme time emphasis, the design communities had even less time for free thinking. Having less time ran contrary to many of the fundamental values as to why engineers, scientists, and designers went into their profession.  There was no longer as much time or budget to innovate.  A “push back” began to emanate from design communities.

Two other major industry initiatives, Six Sigma and Lean for product development, affected development communities in a similar manner.  Lean resulted in fewer people to do the same work, and had some overhead to measure and monitor capabilities.  Six Sigma resulted in many additions to the requirements of executing a product development process, while focusing efforts to eliminate all sources of unnecessary variation.  Experimentation and variation are necessary for innovation and invention.

Globalization across industries also contributed, for good and not so good reasons.  When products could get knocked off without the ability to enforce the intellectual property, companies had to improve their cycles of innovation and learning to get and to stay ahead.  At the same time, there were now many more competitors addressing what once were largely captive geographic markets.  New entrants wished to be better than the current market players.  Current market players wished to be better to stave off new entrants.

The ability of just about anyone to develop Software, combined with the advent of the Internet, was also a giant driver.  Many classic industries were under siege by companies that either delivered their products or services in a different way, or that added additional value into products through software and/or internet connectivity.

The confluence of Time-To-Market, Six Sigma, Lean, Globalization, Software Emergence, and Internet Emergence during the 1980s and 1990s were the primary driving forces that lead to an innovation revolution in the 2000s.

The 12th R&D-Product Development Innovation Summit, April 7-9, 2015, offers a current snap shot of the progress in the development and maturation of the Innovation Body of Knowledge during the past fifteen years.  GGI espouses no methodology of our own at the Summit.  Our sole goals are to look at what has taken place, to cull out what works, and to identify what companies are adopting into practice. The Summit, a defined three day curriculum targeted to decision makers and thought leaders, will address innovation and intellectual property strategies, tactics, processes, techniques, tools, and software.

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Podcast: Is ‘Open Innovation’ Just Another Word For Outsourcing?

Tuesday, September 23rd, 2014

In this ten minute podcast, Brad Goldense discusses the progress that organizations are making in the area of ‘Open Innovation.’ Lee Teschler, Executive Editor at Design World, leads the conversation.

Discussion Questions:

1.  What is Open Innovation [OI]?

2.  What are the biggest differences between OI and ordinary R&D efforts?

3.  Why should design engineers in the trenches care about OI?

4.  Does it cost more to do OI than ordinary R&D?

The Is ‘Open Innovation’ Just Another Word For Outsourcing? podcast focuses on questions that designers, engineers, and managers may have as open innovation initiatives are introduced to their organization and to their projects.

————

A Note About The Publisher and Discussion Leader:  Design World is a relatively new trade publication in the field of design and engineering. It is published by WTWH Media, LLC, 6555 Carnegie Avenue, Suite 300, Cleveland, Ohio, USA. Lee Teschler’s experience includes twenty-three years at Machine Design where he was Executive Editor.

What’s The Difference Between Research and Development?

Tuesday, September 23rd, 2014

With many more companies allocating a small part of their R&D budget to take on riskier projects, and the growth in corporate infrastructure to manage these riskier activities [Machine Design – July 17, 2014], the lines are starting to blur between two terms that historically were well differentiated. New products are now being launched out of “innovation organizations” and “advanced development organizations,” and not just product development organizations. As of now, research organizations are not yet launching products to market.

Due to a combination of the changing corporate approaches described above, the desires of developers to bring solution to markets and not just a piece of a solution, the globalization of R&D that has decentralized R&D, and naming conventions for product organizations that differ by country, one can no longer just pay attention to product development pipelines to stay abreast of what might be coming to market. The jury is still out as to whether today’s approaches will prove more productive than historical approaches that restricted the scope of projects to reduce uncertainty and improve forecastability of key enabling features and technologies – and then turned these enablers over to product development.

Research and development is a continuum, and highly analog rather than digital in construct (Figure 1). Historically, R&D could generally be segmented into four categories: Basic Research, Applied Research, Advanced Development, and Product Development. “Skunk Works” is perhaps a fifth category, a discussion for another day.

 Figure 1

The Continuum™ of Research and Development

The Continuum of Research and Development

What’s The Difference Between Research and Development? [Machine Design – October 9, 2014] discusses historical approaches and the evolving corporate practices taking place today.

Note:  The URL for the October 9 Machine Design issue will not be active for a few more weeks, but the article is posted.

Making Product Development Processes More Innovative

Monday, August 25th, 2014

Applied Research & Advanced Development Come Of Age [Machine Design – July 17, 2014] discusses corporate efforts to beef-up pre-product development processes and management infrastructure.

Making Product Development Processes More Innovative [Machine Design – August 14, 2014] discusses ways that corporations can build more innovative thinking into their product development processes.

Corporate Practices and KPIs In Organic, Open, and IP Innovation – Research Results

Tuesday, July 8th, 2014

The era of corporate innovation began roughly fifteen years ago, started by industry leaders in the mid-1990s with successful targeted disruptive innovations and chasm crossings.  Today, most companies have now tried out many new approaches and at least changed some of their historical innovation practices to lead, compete, or to just keep up.

John Stark, noted author on the subjects of Product Data Management and Product Lifecycle Management and Director of John Stark Associates which is a research and consulting firm based in Switzerland, has collaborated with GGI on various projects for the better part of the past thirty years.  John Stark Associates publishes a bi-monthly newsletter entitled the “2PLM e-zine” that focuses on the subjects and issues of importance to product development and lifecycle management professionals.  Each time GGI publishes the results of our primary research studies, John Stark runs a six-part series in the 2PLM e-zine.

The first article of the six is a general announcement to the 2PLM readership that alerts them to the upcoming five content pieces.  This first 2PLM article was published yesterday July 7, 2014.  The remaining articles will occur over the next two and one-half months as each bi-monthly issue is published.

The GGI study, entitled the “2014 Product Development Metrics Survey”, was conducted by sending questionnaires to a wide range of companies developing products throughout North America. Participating companies had headquarters throughout the Americas, Europe, and Asia, but their response was for North American R&D-Product Development operations. Complete data sets were received from 200 companies. Consumer, industrial, medical, chemical, and automotive/vehicular products were the top respondent industries. Participants completed 31 questions detailing their demographic information and practices in the following five research areas: R&D Operating Environment, Organic Innovation, Open Innovation, Intellectual Property, and the Top Corporate Metrics used to measure R&D and Product Development. The research period was September 2012 to October 2013. The results were published March 3, 2014. This research is statistically valid and provides a Margin Of Error for each research question.

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