Technology and Innovation Leeds School of Business University of Colorado Boulder, CO 80309-0419 Professor Stephen Lawrence.

Technology and InnovationTechnology and InnovationLeeds School of BusinessLeeds School of BusinessUniversity of ColoradoUniversity of ColoradoBoulder, CO 80309-0419Boulder, CO 80309-0419

Professor Stephen Lawrence

Course Outline

Introduction to OMProductivity

Linear programming

Quality SPC tools

Timeliness Queueing Theory

Flexibility Inventory Theory

Technology and Innovation Project

ManagementOperations Strategy

Business Performance Excellence

Charles SheelerSuspended Power

1939

Agenda

Competing with technologyS-Curve analysis Disruptive technologies

Innovation in historyNormal vs. revolutionary innovation Paradigms

Managing TechnologyTechnological Forecasting

The Value Equation

price

InnovationFlexTimeQualityValue

Product Innovation

Process Innovation

Businessmen go down with their businesses because they like the old way so well they cannot bring themselves to change. …Seldom does the cobbler take up with a new fangled way of soling shoes and seldom does the artisan willingly take up with new methods of his trade. Henry Ford, My Life and Times, 1922

Henry Ford

Product vs. Process Innovation

Competing with Process Innovation

Competing withMarketing

Capabilities

Competing withMarketing

Capabilities

Competing withTechnologicalCapabilities

Competing withTechnologicalCapabilities

Competing withOperationalCapabilities

Competing withOperationalCapabilities

ProcessEnhancements

ProductEnhancements

Value toCustomer

PriceQualityTimelinessFlexibility

Technology at GM (1980’s)

Patterns of Innovation

Evolution of

Product/Process Innovation

Product Innovation

Stage of Product Life-cycleearly late

Rate ofInnovation

high

low

ProcessInnovation

Trajectory of Tech Innovation

Technological performance often follows an S-shaped curve

Perf

orm

an

ce

Effort (funds)

Physical limit of technology

Foster, Innovation: The Attackers Advantage, Summit Books, 1986

Silicon Slowdown: Scientists are Battling to Surmount Barriers in Microchip Advances

Perf

orm

an

ce

Effort (funds)

Physical limit of technology

Foster, Innovation: The Attackers Advantage, Summit Books, 1986

Successive Tech Innovations

DisruptiveTechnology

IBM Develops Copper Chip;Seen as Industry Breakthrough

Patterns in History

Unorderly not an orderly process of research and development;

few elements of planning or cost-benefit analysis.

Breaks constraints. Technological change involves an attack by an

individual on a constraint that is taken as a given by everyone else.

Unexplained timing. Often no good reason why an invention was made at

a particular time and not centuries earlier (e.g. wheelbarrow and stirrup in Medieval times).

Moykr, The Lever of Riches: Technological Creativity andEconomic Progress, Oxford University Press (NY), 1990.

Stages of Technical Evolution

Invention: Acquisition of new knowledgeInnovation: Application of new knowledgeDiffusion: Acceptance and adoption of new knowledgeAnalogy to Evolution Invention = Mutation Innovation = Adaptation to Environment Diffusion = Evolutionary Success Lesson: dead ends have value

Normal vs. Revolutionary Innovation

Normal Innovation innovation with an accepted “paradigm” incremental in nature increasing specialization required

Revolutionary Innovation often a response to “intellectual crisis” often proceeded by competing theories and

ideas changes the world view of a discipline establishes a new paradigm

Kuhn, T.S., The Structure of Scientific Revolutions, Univ of Chicago Press, 1962.

Paradigms

Paradigm – a set of rules and regulations (written or unwritten) that does two things: Establishes or defines boundaries Governs how to behave inside the

boundaries in order to be successful

Examples of Paradigms

Everything that can be invented has been invented Charles H. Duell, Commissioner, U.S. Office of Patents, 1899.

Louis Pasteur's theory of germs is ridiculous fiction. Pierre Pachet, Professor of Physiology at Toulouse, 1872

Airplanes are interesting toys but of no military value.

Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre.

There is no reason anyone would want a computer in their home.

Ken Olson, president, founder of Digital Equipment Corp., 1977

640K ought to be enough for anybody. Bill Gates, 1981

Innovation as Chaos

Path dependent and self-reinforcingInitial conditions are critical Small perturbations in initial environment can

have a large subsequent in eventual technological evolution

Inherent randomness (unpredictable)Positive feedback reinforces an evolutionary pathExample: Beta vs. VHS video tapesExample: PC operating system

Chaos in the Movies

Path Dependence

The US standard railroad gauge (distance between the rails) is 4 ft 8 1/2 in (1.44m). That's an exceedingly odd number. Why is that gauge used? Because that's the way they built them in England, and the US railroads were built by English ex patriots.

Path Dependence

Why did the English build 'em like that? Because the first rail lines were built by the same people who built the pre-railroad tramways, and that's the gauge they used.Why did “they” use that gauge then? Because the people who built the tramways used the same jigs and tools as they used for building wagons, which used that wheel spacing.

Path DependenceOK! Why did the wagons use that wheel spacing? Well, if they tried to use any other spacing the wagons would break on some of the old, long distance roads, because that's the spacing of the ruts.

So who built these old rutted roads? The first long distance roads in Europe were built by Imperial Rome for the benefit of their legions. The roads have been used ever since.

Path DependenceAnd the ruts? The initial ruts, which everyone else had to match for fear of breaking their wagons, were first made by Roman war chariots. Since the chariots were made by or for Imperial Rome they were all alike in the matter of wheel spacing (ruts again).

Path Dependence

Thus we have the answer to the original question.The United States standard railroad gauge of 4 ft 8 1/2 in derives from the original military specification for an Imperial Roman army war chariot...

Path Dependence

The width of a chariot was set to be equal to the combined width of the rear ends of the two horses pulling it!

So why this wheel spacing for war chariots??

Path DependenceWhen we see a Space Shuttle sitting on its launch pad, there are two bigbooster rockets attached to the sides of the main fuel tank. These are solidrocket boosters, or SRBs. The SRBs are made by Thiokol at their factory inUtah. The engineers who designed the SRBs might have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory tothe launch site. The railroad line from the factory had to run through atunnel in the mountains. The SRBs had to fit through that tunnel. The tunnelis slightly wider than the railroad track.

So, the major design feature of what isarguably the world's most advanced transportation system was determined over two thousand years ago by the width of a horse's arse.

Technology ForecastingThe Past

1969 Lockheed Delphi Study

Technology ForecastingThe Future

The Future?

What disruptive technologies are currently evolving that are fundamentally changing the way we produce and deliver goods and services?

What paradigms are being broken?

TECHNOLOGY

No Place for Wimps!