Story: Companies typically see time, space and matter as constraints. That’s not surprising — those three elements define the boundaries of our everyday reality. But what if we  saw them not as constraints but as malleable resources for innovation?

That’s the mind-bending proposition Joe Pine presented at Dassault Systèmes’ 3DEXPERIENCE Forum. Lest you dismiss Pine as a wide-eyed dreamer, recall that his book, Mass Customization, introduced a seemingly impossible paradox when it was released in 1992, but that concept is now so widely implemented that it’s a de rigueur business practice.  The fusion of opposites provides opportunities for innovation.

So how do we utilize time, space and matter for innovation? Pine lays out the steps in his latest book, Infinite Possibility. The way forward, Pine says, is to play with the opposites of time, space and matter, namely no-time, no-space and no-matter.  Whereas time, space and matter constitute our usual realm of Reality, no-time, no-space and no-matter constitute a new realm of pure Virtual Reality

If we fuse reality and virtual reality in various mix-and-match combinations, then we can come up with a host of new products, services and, most importantly, customer experiences.  Using these three dimensions, Pine details an eight-realm new universe (“multiverse”) that pairs eight combinations of time vs. no-time, space vs. no-space, matter vs. no-matter.

Let’s start by exploring a realm that is only one step removed from reality, what Pine calls “Augmented Reality.”  Compared to reality, which has time, space and matter, Augmented Reality has time, space and no-matter.  The “no-matter” condition refers to the information that is overlaid onto reality.

Here’s an example: say you’re driving down the street in a city unfamiliar to you. You are in a real space and in a real time. But, you can use a device to overlay information (“no-matter”) onto that current reality. That is, you can use a GPS navigation aid to show you where the nearest bakery is.  The GPS gives you data (“no-matter”) that you can’t see yet in the real world (a bakery around the corner a few blocks away). With that information, your reality is augmented — you can navigate to the bakery and get the cupcake you crave. 

Companies can apply these concepts to new product development. For example, what new products or enhanced experiences could you create in Augmented Reality? Dassault Systemes’ CEO Bernard Charles demonstrated one such product, 3DParis.  With this app, you can stroll the streets of Paris and see an overlay of your current street in olden times — 2000 years of Parisian history showing you how the street you’re walking down looked, say during the time of the French Revolution in 1789.

That’s a playful consumer app; the same principles apply to hardcore business operations, such as airplane repair.  Consider an app that lets mechanics point an iPhone at a distant airplane on the tarmac and get an immediate overlay of the maintenance and repairs that need to be done for that specific plane. 

Action

• Look for ways to virtualize your product, service, or business along one or more of the three dimensions of time, space and matter.  Break the constraints on the “when,” “where,” and “what.”
• Consider ways to replace or enhance the matter of a product, service, or business with data, graphics, and manipulated versions of reality

At Osterwalder’s Business Model workshop at BIF8 last week, I saw the power of his Business Model Canvas firsthand.  Osterwalder outlined the Canvas method and gave the group the assignment to generate a business model for a specific startup.  Small groups clustered around their canvas and the room buzzed with discussion and the squeak of markers as participants took turns sketching out ideas.  As we worked, I was struck by three key features of Osterwalder’s approach.

The first key feature was that Osterwalder encouraged sketching, not just making lists of words. “Any problem can be made clearer with a picture,” he said. The visual artifact lets people react to something concrete.  To encourage people who think they can’t draw, Osterwalder pointed out that people can interpret a stick figure more easily than an abstract concept. “Drawing something, however badly, makes an abstract concept concrete, giving people an opportunity to react to it,” Osterwalder said. Visual thinking helps with understanding, dialogue, exploration and communication.

The second key feature was that Alex had us make our sketches and notes on Post-It® notes.  We then stuck these to the Canvas.  The key part was that then we could move the notes around as we figured out where on the canvas they belonged. “Post-It® notes are like containers of ideas,” Osterwalder said, that can be easily picked up and moved around.  Thus, we could reconfigure our ideas as we refined them.

The third key feature was that the Canvas with its Post-It® notes ensures you don’t miss an important area. Because business models are so complex, with many interlocking pieces, it’s hard to hold all the pieces in memory and see their interactions and dependencies. The Canvas helps everyone see all the pieces and confirm that they work together and make sense. People can use different colors of Post-It notes for different business models, which lets them compare alternate models on the same Canvas. This side-by-side comparison can help to then pick the most promising model to test.

Action:

• If you’re working in a group, print the Canvas in large format (we used 3′ x 4′ at the workshop).
• Most people start on the righthand side of the Canvas, which is the customer side of your business model. It has the “Customer Segments,” “Channels,” and “Customer Relationships” areas. The lefthand side defines the infrastructure of the business with “Key Activities,” “Key Resources,” and “Partner Networks.” A central “Value Proposition” sits between the infrastructure areas that deliver on the proposition and the customer areas that receive the value. Finally, the “Cost Structure” and “Revenue Streams” areas on the bottom sit respectively under the infrastructure and customer sides of the canvas to define the financial side of the model.
• Play with different kinds of models. For example, Nestlé (in its Nespresso business) tested a model in which Nestlé sold its espresso machine through retail but sold the individual “pods” of coffee directly to consumers. Going direct was new to Nestlé but proved to be very lucrative because Nestle didn’t have to share revenue with the retailer.
• Keep interdependencies in mind. Every revenue stream, for example, must have a customer segment with an accompanying value proposition that makes it clear why they would pay.  And every activity, resource, or partner might incur costs.

Sources:
Alex Osterwalder’s bestselling Business Model Generation book is a must!

Alex Osterwalder’s Business Model workshop at BIF8.  See his calendar of upcoming speeches and workshops.
Alex Osterwalder’s slides on SlideShare, such as

Point

Story: At the World Innovation Forum, Scott Cook, co-founder of Intuit, described his company’s culture of high-velocity experimentation. Intuit uses an experiment-driven decision-making process throughout the organization. Rather than expect executives and managers to know all the answers, Intuit uses large numbers of low-cost experiments to test new product, service, and marketing ideas.

To illustrate how high-velocity experimentation works in organizations, Cook described how the concept works in Intuit’s 20-person online TurboTax unit.  In the past, this unit ran about 7 experiments during the annual three-month tax filing season.  Now they run 140 experiments.  Not only do they run more experiments, but they run each experiment on a fast cycle so that they can accumulate results and grow more knowledge during each season. Intuit created a weekly cycle for developing, testing, and analyzing experiments that lets each experiment create new information that feeds into the next set of experiments the next week.

Fast experimentation also improves employees’ sense of engagement and ownership.  In the past when the 20-person team did only seven experiments per year, the average team member might only have one of “their” experiments run once every three years.  But with new high-velocity approach, each employee creates and tests a new idea once every two weeks.

Paradoxially, running more experiments and getting more failures lowers the fear and cost of failure.  When a company runs only a few experiments — and every change or new product really is an experiment — then each experiment matters a lot more to the company and to the employees working on that experiment.  If an employee works for more than a year on a single big experiment, then the failure of that experiment surely has an impact on the employee’s career, even if the company professes to permit failure.  But if an employee works on many quick experiments that steadily improve organizational performance, then the success or failure of individual experiments matters little.

In Intuit’s case, 89% of experiments fail, and yet the online TurboTax unit increased conversions by 50% and successfully created a widely-lauded smartphone app that lets people do their entire tax preparation — from taking photos of tax documents, to automatically putting numbers in the right boxes, to electronically filing their forms — all on a smartphone.  The hundreds of tiny experiments let the TurboTax unit tweak and test many variations to come up with the best offering.

Action

• Trust experiments rather than experts to find the truth in a dynamic and volatile business environment.
• Teach individuals how to perform cheap experiments by finding and testing the key assumptions behind every new idea rather than building one big new product.
• Use large numbers of low-cost experiments to both grow knowledge and improve employee engagement.
• Create an accelerated cycle of experiments to reduce time-to-knowledge and time-to-market.
• Coach executives to become experiment-seekers — to use experimentation as a key decision-making tool.

Point

Story: Forty years ago, Georges Mougin got an idea: solve water shortages in drought-ridden countries by towing an iceberg over the sea to them. Floating icebergs are pure drinking water, but they slowly melt into seawater.  Why not harvest them before all that drinking water is lost?

The idea of towing an iceberg, however, seemed crazy.  When Mougin talked with scientists about the idea, objections abounded.  “Once you get north of the equator, you’ll have nothing but a rope at the end of your tow,” said Wilford Weeks of the U.S. Army Cold Regions Research and Engineering Laboratory at a conference in 1977 when hearing of the idea.  Other questions were: how much power would it take to tow 100-million ton iceberg? What would be the environmental impact of it melting in equatorial waters once it was anchored at a coastal city?

Although Mougin was confident of the idea’s viability, he had no way to prove it. Despite securing the backing of a Saudi prince, Prince Mohammed al Faisal, the projected costs and unanswered questions proved insurmountable.  But Mougin continued working on the idea, doggedly amassing data on issues like ocean currents and learning how technologies from other industries, like those developed for off-shore oil drilling, could be tapped.

Mougin’s lucky break came in 2009, when he heard of Dassault Systemes‘ “Passion for Innovation” program.  Dassault Systemes sponsors the Passion for Innovation program as a philanthropic venture to give individuals or nonprofits free access to Dassault Systemes’ suite of products (CATIA, DELMIA, SIMULIA, ENOVIA, 3DVIA. SoildWorks, Exalead) as well as a team of Dassault Systemes engineers.

“We’ll help you and provide you with the modeling and simulation technologies that should demonstrate that your project is feasible,” said Cedric Simard, IceDream Project Director, Dassault Systemes.

Dassault Systemes worked with Mougin: “We used virtual and digital simulation technology to recreate a virtual world around the iceberg, taking into account real oceanographic and weather data to simulate the sea currents at several depth levels, as well as the wind, waves, and even the impact of the sun’s rays,” Simard said.

After using CATIA software to create an exact model of the iceberg, the team used Dymola for the complex simulation, factoring in issues like ocean temperatures that would affect melting en route as well as meteorological phenomena like wind. The team also used SIMULIA software to consider risks such as fracturing of the iceberg. Running these simulations enabled the team to test the concept for a fraction of the cost of building a prototype: $500,000 instead of $10 million.

The simulations proved that it’d be possible to tow a 7-million-ton berg with one tugboat, primarily relying on ocean currents and consuming only 4000 tons of fuel over the 140-day journey, Simard said. The berg would experience some melting (38%) but still provide enough drinking water for 20,000 people for one year.

“Mougin is a very passionate guy,” Simard said. “He’s 87 years old, and he’s been working on his project for forty years. Now thanks to the power of simulation and the digital world, he can see how his idea would work in reality.”

Action:

• Create mathematical models of large-scale innovations
• Ground the model in real-world conditions and environments with empirical data
• Estimate performance, costs, potential failure modes using advanced software
• Present a compelling graphical story of the innovation with 3D visualization.

Sources and Additional Information:

My video interview with Cedric Simard on CollaborativeInnovation.org

Ice Dream Project

“Dassault Puts Inventor’s ‘Ice Dream’ to 3D Simulation Test” by Beth Stackpole

“Iceberg Transport” by Lauren K. Wolf

Story: At Invention Machine’s Power to Innovate user conference, Jim Belfiore, Senior Director of Client Innovation and Practices, posed the question of where to innovate in this economy. Numerous presenters provided varied and surprising answers about where they find innovation and innovation-related opportunities.

First, “where” can be a literal place.  Mark Atkins, CEO of Invention Machine, discussed research on emerging markets such as China, India, Brazil, and other rapidly-developing emerging markets.  He cited data on the rise of innovation awareness and investment in these countries.  For example, a recent survey found that 52% of executives in emerging markets thought innovation was critical versus only 31% in the US and EU.  The same survey showed that more executives in emerging markets are investing in innovation than are their mature-market counterparts (85% vs. 53%).

The implication: companies should scan and analyze emerging markets for companies that might be disruptive competitors or that might become the company’s new suppliers, new manufacturers, or new distributors for addressing emerging market needs.  By answering “where” with emerging market players, companies can find new opportunities for collaboration.

Second, Dr. Charles Volk, Vice President and Chief Technologist at Northrop Grumman Navigation Systems, showed how innovation can be found in the past — “where” can be a point in time.  Volk’s division makes high-performance inertial navigation systems that enable aircraft and missiles to know exactly where they are, how fast they are moving, how they are oriented in space, and which way they are heading.  The devices represent more than 50 years of technological success, as well as some failures. Failures of the past, however, can be resurrected when new technology advances and obviates previous constraints.  The key, however, is to be able to access the prior work a company has done on a project, to avoid reinventing the wheel.  The challenge gets even bigger given that so many Boomers are retiring, taking past knowledge and lessons learned with them.  That’s one reason why Northrop used Invention Machine’s Goldfire tool to systematically capture and index legacy knowledge from disparate sources and formats.  According to senior scientist David Rozelle, for example, “Extensive efforts were put into feeding all HRG [Hemispherical Resonator Gyro] product-line documentation into state-of-the-art-knowledge base tools, including Invention Machine’s Goldfire system, to allow future engineers easy access to this huge amount of information through queries to the database.”

Third, Henry Gonzalez, Technology Fellow at Eastman Chemical Co, provided an external-source “where” example. Eastman,  a global manufacturer of chemicals, plastics and fibers, wanted to find a new application for one of its existing technologies. Eastman used Goldfire’s Innovation Trend Analysis and semantic capabilities to identify and target likely conferences and papers that could point to an answer. The results? A two-day effort using Goldfire yielded results that took an Eastman engineer 6-9 months to do previously. Eastman engineers were originally skeptical that a tool could help them be more innovative, but they were convinced by the results and are now expanding their Goldfire deployment.

Finally, Belfiore challenged people to look beyond their current S-curve of technology or product adoption to the next curve. More specifically, his answer to the question of “where” is to examine where your current constraints are. Then look to that as “where” to innovate before a competitor does. For example, in the energy industry, hydrocarbon production and supply are a challenge, with the constraints of cost, resources and environment impact. Most alternatives to the energy issue target eliminating hydrocarbon fuels by substituting wind or sun. But these next-generation solutions come with new problems, such as replacing the world’s fleet of vehicles and existing energy-delivery infrastructure if liquid hydrocarbons are no longer used. Joule BioTech, however, pinpointed fuel as its innovation place. Specifically, Joule focused on finding a new way to make hydrocarbon fuel that would reduce dependence on foreign oil and eliminate the carbon footprint of fuel. Joule disrupted the way fuel is made. Rather than start with a hole in the ground to reach fossil fuels, Joule created sunlight-driven bioreactors that could grow artificial microbes that produce ethanol and diesel. The microbes require only sunlight and carbon dioxide to produce ethanol and diesel, thus not only lowering the cost of production but also removing CO2 from the atmosphere.  When the fuel and diesel is burned in the car engine, therefore, no new CO2 is released. And, the fuel is used in the combustion engine just like gasoline, requiring no new infrastructure.

Action:

• Think about all the possible “wheres” of innovation.
• Look at the past for failed innovations that you can resurrect using new developments or to address new needs.
• Look at new markets and the new players arising in those markets as a new source, new collaborator, or new point of demand for innovation.
• Look beyond the current S-curve to create the next S-curve before the competition does.

For more information, on Northrop Grumman’s HRG project, see: http://www.es.northropgrumman.com/media/whitepapers/assets/hrg.pdf