Category Archives: Student Posts

Innovation with 3D Printing

An exciting trend in corporate entrepreneurship over the past decade or so is the adoption and implementation of additive manufacturing techniques. Although the products made with this technology are not always new in design, the upheaval of traditional manufacturing processes certainly represents a breakthrough change. Furthermore, the devices used to execute additive processes represent a whole new set of design challenges and, as a result, innovative solutions. While nimble and risk tolerant startups initially swarmed around 3D printing in order to fill the new market space (such as MakerBot, Formlabs, and Aleph Objects’ Lulzbot just to name a few), it is interesting to see how many large firms missed this first mover opportunity.

HP Inc. appears to have been one of the first major corporations to manufacture 3D printers; other notable early firms include Autodesk (consumer market) and Mazak (hybrid additive/subtractive machines). However, their Fusion Jet 3D printer was not actually released until 2016, despite how the 3D printer concept has been around since the 1980s. HP’s “Multi Jet Fusion process” capitalizes on their inkjet-based technological competencies in order to produce more precise parts in different materials/colors at speeds 10 times faster than pre-existing products. Considering the even longer delay for other corporations to pursue this market, I wondered, what led them to jump on the trend first?

The release of HP Inc.’s 3D printer came shortly after their split from the Meg Whitman led Hewlett Packard Enterprise. This may cause some to conclude that the best way for large firms to innovate is by becoming smaller! But, the development of the Multi Jet Fusion process was announced in 2014, before the split and leadership change. Nevertheless, the current CEO, Dion Weisler, stated that the split allowed them to be “more reactive to a market that we see is changing at lightening speed”. Furthermore, HP refused to cut R&D because, as Weisler said, they want to “keep the innovation engine alive”. Commitment to innovation from top management certainly bodes well for HP’s long-term success. Although, I wonder if innovation will remain within HP’s core strategy or simply be a passing fad. Perhaps a separate innovation department, not within R&D, could allow them to institutionalize innovation and to strike on market opportunities more quickly.

On the other side of the token, a fair number of firms have been finding ways to innovate with the new manufacturing capabilities that these devices provide. The aerospace industry in particular has used the technology because of its ability to create complicated parts with one operation and less overall weight. News stories of aerospace companies that are using 3D printing are becoming extremely prevalent with Lockheed Martin and Aerojet Rocketdyne both having recent announcements. These two companies aim “to speed production and lower costs” by using additive processes for components in satellites and rocket engines, respectively. However, the most intriguing story that I have recently encountered was about Adidas’ Futurecraft 4D shoes which combine an innovative 3D printing process with an innovative product design. Talk about a great combination! The soles are made using “Digital Light Synthesis technology” which combines light and specialty resins to achieve the desired layout. This is yet another example of corporate entrepreneurship that has stemmed from the additive manufacturing revolution. 3D printing is clearly opening doors to product and process innovations in many different industries.

Some questions to consider…

  • Are the Jet Fusion 3D and/or Futurecraft 4D breakthrough innovations?
  • Why has the adoption of additive manufacturing into corporate strategy taken so long?
  • What will be the next industry to leverage additive manufacturing for product innovations?

-Kyle DeVault

[1] T. Hessman, “18 Companies Leading the 3-D Printing Conversion”, Industryweek.com, 2017. [Online]. Available: http://www.industryweek.com/technology/18-companies-leading-3-d-printing-conversion#slide-0-field_images-154531. [Accessed: 18- Apr- 2017].

[2] A. Zaleski, “HP’s Biggest Gamble Is 3D Printing”, Fortune.com, 2017. [Online]. Available: http://fortune.com/2015/12/08/hp-3d-printing/. [Accessed: 18- Apr- 2017].

[3] R. Park, “Will 2D Printing Giants Succeed in 3D Printing Business? | All3DP”, All3DP, 2017. [Online]. Available: https://all3dp.com/can-2d-printing-giants-succeed-in-the-3d-printing-business/. [Accessed: 18- Apr- 2017].

[4] J. Vanian, “HP, Inc. CEO Dion Weisler Talks 3D Printing, Layoffs, And Being Nimble”, Fortune.com, 2017. [Online]. Available: http://fortune.com/2016/03/08/hp-ceo-qa-3d-printing-layoffs/. [Accessed: 18- Apr- 2017].

[5] P. Swarts, “Lockheed, Aerojet bet on 3-D printing for manufacturing – SpaceNews.com”, SpaceNews.com, 2017. [Online]. Available: http://spacenews.com/lockheed-aerojet-bet-on-3-d-printing-for-manufacturing/. [Accessed: 18- Apr- 2017].

[6] “Adidas Uses Light, Oxygen to Revolutionize Additive Manufacturing, Sports Industry | Sustainable Brands”, sustainablebrands.com, 2017. [Online]. Available: http://www.sustainablebrands.com/news_and_views/product_innovation/sustainable_brands/adidas_uses_light_oxygen_revolutionize_additive. [Accessed: 18- Apr- 2017].

IBM @ HIMSS 2017 – Healthcare, AI, and Transparency

Last February, Ginni Rometty, CEO of IBM, gave the keynote address at the 2017 Healthcare Information and Management Systems Society (HIMSS) Conference & Exhibition. This annual event attracts over 40,000 individuals from around the word that are currently working professionals, clinicians, vendors, and executives within the healthcare IT industry. Taking place in Orlando, Florida, Rometty’s speech emphasized the values and transparency in cognitive computing, especially through utilizing IBM Watson.

“Every new era [comes] with amazing, inspiring dreams, but they also come with questions,” she said. “We have to take [those questions] seriously. When a new era comes, it’s our responsibility to guide that technology into the world in an ethical and a really enduring way.” – Rometty

But, what does that mean for individuals working in the healthcare industry? This industry generates a massive amount of data annually that is impossible for working professionals to absorb, analyze, and use in a short period of time. By applying cognitive computing and artificial intelligence, thousands of journal articles on specific treatments or injuries can be collectively analyzed and presented for next steps with a patient’s track within seconds.

Will this technology replace doctors, or cause some to lose jobs? Rometty comments saying that “this isn’t man versus machine. This is man and machine together.” Some jobs will change, there will be an honest impact, but these new jobs will require a new set of skills. These “new collar” jobs are the future, and Watson will be there to assist. There will be a level of transparency with how AI functions, its purposes, and the business model around it. Especially within healthcare, this technology needs to be very secure as it becomes more personalized.

Will this initiative pay off for IBM? Watson Health is one of the company’s main focuses at the moment. It can be seen as a moonshot idea that is either a gamble or the next big return for the 100+ year-old company. The attendance and attraction at HIMSS 2017 for IBM was very strong, but it may have been due to individual curiosity about the recent failed partnership between Watson Health and MD Anderson Cancer Center. Can Watson Health bring personalized healthcare on a global scale? Will it fully be able to utilize its cloud-based technology for vast amounts of data and accurately analyze medical information through its integrated artificial intelligence? Will the addition of Watson Health create these “new collar” jobs and benefit doctors, or will medical check-ups and treatments be conducted by machines? Only time will tell, and all interested eyes within the medical and healthcare IT industry are on IBM Watson Health.

-Gavin Noritsky

Sources:

FierceHealthCare

HIMSS 2017: IBM’s Ginni Rometty talks trust, values in a cognitive computing era http://www.fiercehealthcare.com/analytics/himss-2017-ibm-s-ginni-rometty-talks-trust-values-a-cognitive-computing-era

Keynote at Healthcare Information and Management Systems Society (HIMSS)

Ginni Rometty, CEO IBM
https://www.youtube.com/watch?v=D58bqSJr6Mg&t=961s

When is an Intrapreneur really an Entrepreneur?

Rodney Williams is a smart and ambitious man. You can come to this conclusion by just reading a list of what he’s accomplished in his career so far. Williams has four degrees under his belt, including an MBA from Howard University. A marketer from birth, as a kid he perused ads and commercials, always thinking about how products and services can truly serve people. He is a natural entrepreneur, even having started several business ventures as a student.

It was when he was at P&G, though, that Williams’ talents really shone. As a brand manager for Pampers, he accomplished quite a bit; by 27 he had three patents and nine wards for his work at P&G. Williams had done well with P&G, but his entrepreneurial spirit had never left him. During a brain storming sessione was having at work, Williams thought of an idea, that data could be sent by inaudible sound waves instead of Wi-Fi or Bluetooth.

Now Williams could have gone and tried to run with this opportunity inside of P&G. He even compliments them as the place he wanted to be as a brand manager, because, as he says, they “wrote the book for brand management.” He liked how they developed and brought products to market. Though Williams had the resources at P&G to commercialize products under well-known brands, he was always forging his own path when his ideas didn’t fit the traditional brand model or well understood product categories that P&G dominated.  So Williams, instead of continuing to be an intrepreneur, did his research and returned to the world of entrepreneurship.

Williams had decided to try to do this new enterprise on his own. What he did was reach out to a friend, Chris Ostoich, and they kicked the idea around. When the two had developed the idea a bit, they asked their engineer friend to see if it could be done. He told them it could but it would be tough, and to bring their idea to a startup competition SXSW. Here they got a lot of attention for their idea, including a lot of people and investors that wanted to be part of their new company, LISNR. It was then that Williams finally quit his job at P&G to fully develop this venture.

After doing my analysis on the articles I had read I reached out to Rodney William’s. I had asked him if my previous analysis was right, was he a champion at P&G? He said that I was right in what I thought. That he had a great idea and the culture wasn’t right at P&G and he had an idea that he wanted to keep completely to himself. Lastly, I asked if innovation was a key component in his new company. He said that “Innovation is a part of LISNR’s DNA it’s in our culture and will be how we succeed.” This statement wasn’t just interesting to see what he thought of innovation, but its place perhaps in LISNR’s success.

-Andrew Garwys

Sources:

http://www.forbes.com/sites/matthunckler/2017/01/20/how-a-lifelong-marketer-leveraged-his-experience-in-corporate-innovation-to-launch-a-tech-company/#7b670f2b1d59

http://www.forbes.com/sites/rodneywilliams/2016/12/01/how-i-arrived-at-my-big-idea/#620cb99e1268

How to Live for 120 Years

“Every CEO talks about making his or her company more innovative, but for GE it’s a matter of survival. GE is a corporate mainstay, the only original stock left in the Dow Jones industrial index, which began tracking the performance of large public companies in 1896. It must succeed now in a world in which the only constant is change”.

– Boston Globe, April 17. 2017

As reported in this recent article by the Boston Globe, GE has successfully operated for over 120 years. But how have they managed to do this? The answer lies in the performance of a number of best practices and a willingness to change.

GE has long been an industrial exemplar in terms of technical and managerial best practices. It should not be surprising then that in this era of ever-quickening change they have continued to lead in this way. GE has long been distinguished for its internal employee development programs whether it’s helping employees continue their technical education with graduate work or placing them in leadership training programs to become more effective managers. This in itself is a best practice. Three more best practices, as identified by the Harvard Business Review, are “(1) resource allocation that nurtures future businesses, (2) faster-cycle product development, and (3) partnering with start-ups.” In terms of resource allocation, it can be tempting to funnel too much money to expand the current cash cow business, and while these must be adequately supported, it is equally if not more important to invest in future businesses that are just emerging. Today’s emerging ventures will be tomorrow’s cash cows. Related to this is achieving a fast product development cycle; that is, not only does GE invest in future businesses, but they consciously move quickly to develop them. For example, GE has worked extensively with Silicon Valley entrepreneur Eric Ries to implement “Agile” and “Lean” methodologies. Finally, GE is partnering with startups as part of an “open innovation” strategy in which startups provide novel business opportunities and capabilities and GE provides capital as well as 120 years’ worth of experience in launching new businesses.

One particular area where GE has invested for the future is in digital capabilities through the creation of its new GE Digital division in 2015. This story started with the emergence of big data analytics and the Internet of Things (IoT) as new, high potential technologies. GE recognized the implications for its business and the importance of leading this wave of technology. In fact, it is changing GE’s entire business model. Rather than its traditional “transactional” relationship with customers – in which GE sells a physical product and may provide some maintenance service – GE is shifting to an “expanded customer outcome” relationships in which IoT product integration can provide improved asset management for customers. In essence, GE has moved from selling hardware to selling a platform as a service (PaaS). This is a truly inspiring example of GE’s willing to change with the times; not only did they create product innovation and develop an entire new digital competency, but they innovated at the business model level, a huge shift for the company.

GE has spent the last 120 years continually growing by continually innovating. They have learned and now model a number of best practices, especially the ability and willingness to constantly change.

-Andrew Eagan

Sources and further reading:

Why do they like M&A?

Recently I saw an interesting news article, on TechCrunch.com, about a telecom company purchasing a drone company. The title of the story is “Verizon buys Skyward, a drone operations company.”

Here is an excerpt:

Forget about Yahoo for a minute. Verizon just announced it has acquired Skyward, a drone operations and management company based out of Portland, Oregon for an undisclosed amount. Verizon says Skyward will help developers and businesses better create and manage drones that also happen to utilize Verizon’s mobile network services and infrastructure.[1]

Why would a telecom company purchase a drone company? The fact is, Skyward could bring their drone operation management system to Verizon’s Internet of Thing portfolio. They could leverage their investment in mobile network infrastructure and by adding associated services. This purchase strengthens Verizon’s investments that will help them establish a position in the emerging Internet of Things area.

In 2016 $612.9 billion was spent in mergers and acquisitions within the global tech sector. The phenomenon of large companies acquiring small companies or startups is fierce. Verizon wants to acquire the drone company to expand their business. Google is one most the prolific acquirers in the technology field. Facebook uses its stock as an acquisition currency. Those big technology companies love to purchase startups. Deloitte’s 2016 Tech Report of M&A trends[2] indicates that 41% of the executives surveyed believed in expanding/diversifying products or services, and technology acquisitions is the most critical driver of M&A. Unlike IPOs, last year was active for tech startup M&A, and more and more tech-startup M&A activities are happening as M&A is one way forthe large established companies to access these new resources.

Why do big companies prefer to purchase startups rather than launch a new project?

I think there are several reasons:

  1. It’s time-consuming to launch a new project. Every project has a different mission. Sometimes company leaders just want to make a monetary investment rather than invest a huge amount of time and talent. Big companies are always facing fierce competition, and they will let the opportunities slip away if they don’t make decisions quickly.
  2. High uncertainty. Triumphs require a certain amount of luck, and that’s not always predictable or reproducible. Not every successful entrepreneur can ensure they could create a successful business again. Therefore, M&A is one way to manage the risk.
  3. They are targeting talent and resources. Startups have unique assets such as their team, market connections, and patents.
  4. Strategy considerations. Every company has competitors, no matter how big they are. Some competitors are obvious, direct and immediately threatening. Others are less clear, but they’re potential threats. Startups are potential threats, and they could engulf a big company’s market in the future or face acquisition by other competitors. Those problems can be solved by purchasing the threat when it is small.

External aquisitions solve problems better than internal projects, but there is a negative side of solely relying on acquisitions for new platforms of growth. The cultures of the two companies could easily clash. There will be increased administrative burden if they have different divisional structures. It’s always easier to working with internal projects because you’re already familiar with the organization and can put more resources on innovation. All divisions are integrated as a part of the organization and more efficient at focusing on innovation.

Every approach has its pros and cons. The strategy of innovation by acquisition could be a great catalyst, it could broaden your talent pool, be beneficial to R&D capabilities, but also could go wrong when not executed properly. For M&A, integrating the new group into the existing environment and focusing on innovation is the key. For internal innovation, one of the barriers is how to break through the organizational inertia and implement the new strategy. Companies should choose the right approach depending on the situation.

-Mark Li

[1]https://techcrunch.com/2017/02/16/verizon-buys-skyward-a-drone-operations-company/

[2]https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Technology/gx-tech-trends-2016-innovating-digital-era.pdf

Bringing Innovation to the Military

On March 1, 2016, Former Secretary of Defense Ashton Carter spoke with the Commonwealth Club of California. To begin his speech, Carter said, “one of my core goals in this job has been to build, and, in some cases, rebuild the bridges between the Pentagon and America’s wonderfully innovative and strong technology community.”[1] To support that statement, Carter created the defensive innovation advisory board, headed by Eric Schmidt, the Executive Chairman of Alphabet. The board has offered a set of informal recommendations to Carter, including building software platforms and human networks to encourage innovation, sponsoring innovation contests, providing education to advocate collaboration and creative thinking, increasing the recruitment of computer scientists, and spending more on machine learning technologies. Finally, the board suggested the DoD establish a Chief Innovation Officer position, which Carter has made an effort to do. Little has been said about the role of the position, but the Officer would be a senior advisor to the Secretary of Defense.

With innovation becoming the big push, companies have been advised to establish a Chief Innovation Officer. The Forbes article notes, “businesses need to establish uniformity of command by designating a single person to be accountable for their innovative programs.”[2] Guess who disagrees? That’s right, Eric Schmidt. The Chairman of the board who just advised Ashton Carter to hire such position. In his book How Google Works, co-authored by Jonathan Rosenberg, Schmidt writes, “As business managers, we like to manage things. Want something done? Then put someone in charge of it. But innovation stubbornly resists traditional, MBA-style management tactics. Unlike most other things in business, it cannot be owned, mandated, or scheduled.”[3] Tim Cook, CEO of Apple, echoes a similar message about the position. “As soon as a company has a Chief Innovation Officer you know that a company has a problem.”[4]

If adding structure to innovation will only hinder innovation, how does a company/agency encourage or capture innovative ideas? Udi Manber, a previous employee at Google and the former Chief Innovation Officer at Yahoo, comments, “Innovative people do not need to be told to do it, they need to be allowed to do it.”4 So don’t force innovation; evolve it organically.

Then maybe Carter is on the right path with his DIUx initiative. The Defense Innovative Unit Experimental (DIUx) is an experimental group within the Department of Defense with the mission of “accelerating technology into the hands of the men and women in uniform.”[5] The first DIUx technology hub facility opened in Silicon Valley in August 2015. The California team connected innovators with senior level DoD leaders. These connections opened Pentagon funding sources, fellowship, and rotational programs to encourage innovators. Carter then followed a Silicon Valley lesson and decided to iterate DIUx to create DIUx 2.0. This iteration pushed DIUx as a nationwide initiative. Since then, two more DIUx hubs have opened in Boston and Austin, TX. Carter also upgraded the start up’s processing power and operating system. He implemented a flat structure with DIUx 2.0, another a page out Silicon Valley’s playbook. He even snagged Isaac Taylor, a former head of operations at Google X, to join in the leadership team. And finally, Carter reorganized the communication system of DIUx so the unit would report directly to the Secretary.

Of course, none of these efforts mean anything if the new Secretary of Defense, Jim Mattis, doesn’t continue the work initiated by Carter. But, it has been reported that Mattis will continue to invest in innovation, so it seems as though the innovation advisory board will remain intact, along with the DUIx hubs. So far there is no word on Mattis’s plan to hire a Chief Innovation Officer, but it looks as though the option remains valid.

-Lauren Young

[1] https://www.defense.gov/News/Article/Article/683790/carter-dod-must-innovate-to-lead-in-a-competitive-world

[2] http://www.forbes.com/2009/12/16/chief-innovation-officer-leadership-managing-accenture.html

[3] Schmidt, Eric, and Jonathan Rosenberg. How Google Works. New York: Grand Central, 2014. Print.

[4] https://channels.theinnovationenterprise.com/articles/the-chief-innovation-officer-a-symptom-or-a-solution

[5] https://www.diux.mil/

Can Corporate Entrepreneurship Cure Big Pharma?

Most of us are all too familiar with the current state of big pharmaceutical companies. These giants plow an enormous amount of money into R&D for often mediocre results, leading to outrageously-high drug prices, slow movement, and the ever-present reminder that there are an uncountable amount of diseases out there still needing to be cured. As a result, these giants risk being drown out by generic companies, which fight the soaring drug prices but still do little to advance the state of pharmaceutical research. It is clear that a change must be made toward real, meaningful research.

Some firms have begun experimenting with various methods of bringing a more entrepreneurial R&D process to large pharmaceutical companies in order to better encourage long-term value creation through innovation. In particular, there appears to be an emphasis on small, relatively autonomous divisions within R&D which specifically focus on a very small number of therapeutic areas and driving one or two breakthrough solutions in these areas to early clinical trials. GlaxoSmithKline and Vertex Pharmaceuticals have had successes with bringing the small company R&D feel to big pharma research in this way. Pfizer attempted to take this further, establishing therapy group skunkworks projects in the form of a network of small companies, but this has since been dissolved. GlaxoSmithKline has implemented a reward system to compensate for breakthrough innovation and Eli Lilly is examining the possibilities of doing the same. Eli Lilly has also been successful at investing in integrating other companies into their R&D network in order to have several different sources of innovation working together (Douglas, Narayanan and Mitchell). Dr. Shreefal Mehta, currently CEO of the Paper Battery Company, a board member of Pulmokine and an entrepreneur who has been involved in the founding of two biotechnology firms noted that many of these efforts get killed off due to large changes of management when these big pharmaceutical firms acquire other companies- “During these acquisitions many new management figures become involved. If someone doesn’t like the direction this innovation machine is headed in, it is killed off before any results can be obtained.” These big pharmaceutical firms need to adopt some sort of protective framework for these entrepreneurial divisions if they are going to survive in this existing corporate structure.

Too often large pharmaceutical firms are judged by the number of new chemical compounds which proceed to clinical trials (Douglas, Narayanan and Mitchell). This focus on volume rather than real breakthrough medical discoveries has lead to a pharmaceutical equivalent of incremental innovation in which the reality is that many of these new compounds are simply some minor additions made to an existing compound in order to be able to quantify it as a novel innovation. Dr. Mehta says that risk adversity plays a big part in the sluggishness of big pharma R&D, whereas in small companies there is a drive to make a true breakthrough in order to gain notoriety and to really help people. This kind of short-sightedness in research mirrors the quarter-to-quarter short termism that is rampant in large, public companies in order to keep shareholders happy and, similarly, creates a largely stagnant, numbers-based form of R&D that does not add any real value to the industry. With the kind of advances being made in drug discovery thanks to advances in big data analytics and its relation to chemical compound discovery, there are more effective methods than ever to create a pool of potential compounds likely to be game-changing for the pharmaceutical industry, and there is becoming less and less reason that these large corporations cannot organize a push towards real breakthrough innovation in a way that could save countless lives.  Failure to do so will result in extinction as these pharmaceutical giants are outcompeted in price by generics, sealing the fate of meaningful R&D in the pharmaceutical industry.

As these innovative changes have begun to take hold over the last few years, it will be interesting to see if there will be new life breathed into R&D at big pharma companies. These companies must overhaul the way they do drug discovery if they hope to stay competitive and beat back the growing tide of generic medications. Only time will tell if they are able to adapt quickly enough to these new models of innovative discovery.

-Stephen Notley

Works Cited

Douglas, Frank L., et al. “The case for entrepreneurship in R&D in the pharmaceutical industry.” Nature Reviews, Volume 9, September 2010 (2010): 683-689.