8 - The Ten Types of Innovation

8 - The Ten Types of Innovation jls164

Lesson 8 Overview

Lesson 8 Overview mrs110

Summary

My intent in this course is to be eminently practical and purpose-driven in honing our innovation toolset, and this week is no different. Similarly to our intent to understand very tactically and specifically what makes innovations work& and the spaces of opportunity, this week we will specifically overlay a framework created by Larry Keeley to understand if there are additional grounds for innovation in our concept.

I see Keeley's model as another of those seemingly simple -- but very powerful -- means by which we can understand and hone our thinking, especially when used in this general phase of creating our innovation concept.

What can be especially powerful about this overlay is that it has a tendency to expand thinking beyond 'concept-level' and more into 'platform-level.'

Learning Outcomes

By the end of this lesson, you should be able to:

  • discern the ten types of innovation and how they may be blended;
  • assess how the ten types of innovation may be paired with white-gray-black space thinking to unearth potential innovation platforms;
  • integrate the ten types of innovation onto Cognitive Maps to provide additional strategic opportunities.

Lesson Roadmap

To ReadChapters 16 and 17 (Keeley, et al.)

Documents and assets as noted/linked in the Lesson (optional)
To Do

Identifying the Ten Types

  • Case Post
  • Case Response
  • Peer Voting

Questions?

If you have any questions, please send them to my axj153@psu.edu Faculty email. I will check daily to respond. If your question is one that is relevant to the entire class, I may respond to the entire class rather than individually.

Profit Model Innovation

Profit Model Innovation jls164

Introduction

In understanding innovation centered around how the organization creates, structures, or times revenue flows from the offering, consider how flexible this form of innovation can be to the organization. In many cases, profit model innovation can be achieved with the same product or service, but delivered with what may be a more beneficial model for the customer.

From The Ten Types of Innovation:

"Innovative profit models find a fresh way to convert a firm's offerings and other sources of value into cash. Great ones reflect a deep understanding of what customers and users actually cherish and where new revenue or pricing opportunities might lie. Innovative profit models often challenge an industry's tired old assumptions about what to offer, what to charge, or how to collect revenues. This is a big part of their power: in most industries the dominant profit model often goes unquestioned for decades."

Profit Model Innovation in the Sustainability Space

Saint John's University: Sustainable Revolving Loan Funds

Consider that profit model innovations are not always strictly limited to the accounting definition of "profit," but can extend to innovation in how funding is structured. Saint John's University has an interesting approach (Sustainable Revolving Loan Fund) to how it funds sustainability projects at the University, one which balances the more immediate savings with a "snowball effect" for overall sustainability spending,

SJU has set aside a sum of money that will be used to grant zero interest loans to projects with cost savings. The cost savings will pay back the loan until 120% of the loan is paid off. As the fund grows, more and larger projects can be initiated. There are a multitude of ways we can decrease consumption of energy and products. The results are decreased operating costs and a more sustainable campus. Since part of sustainability is equity, anyone can submit a proposal and it will be reviewed. Projects will be audited and results will be posted to prove the viability and legitimacy of the fund. A committee of faculty, staff, administration, and students will govern the fund.

Solar City

In the case of Solar City, what is now the largest residential solar in the country, the profit model innovation has a few different facets, as they offer four distinct options to homeowners, ranging from leases to power purchase agreements (their most popular option). In this case, they install panels for free on your home and you pay a low rate to Solar City based on the electricity you use. Interestingly, this option is made possible by the fact that Solar City, as a business, can depreciate the solar panel assets (where a homeowner can't), as well as collecting what is currently a 30% Federal investment tax credit for solar panels.

So, while Solar City may introduce some element of uncertainty into their business with what equates to a subsidy loophole (which could close for them at virtually any time), it would seem that the hope is that they use this boom period to take as much market share as possible. You could consider that this strategy is working, as they are rapidly approaching a juggernaut 40% market share number.

From the customer side, all of this results in what can be significant savings, little to no upfront cost, and the pride of going solar. Wade Michels, a stock analyst, wrote an interesting article (What I learned..." recounting his experience with Solar City, both as a customer and potential investor. Here is what the cost options looked like for him:

The main reason SolarCity owns its market (its share is equal to its next 14 competitors combined) is its various Power Purchase Agreement plans. I asked my consultant: Who came up with this great idea? She says it came from Elon Musk. I'm sure you've heard of him, he has some pretty cool ideas for batteries, electric cars, and space.

The first option was the "Pay as you go" plan. This plan is popular because it requires no money down and would reduce the price of my energy by about 41.5%. My new estimated average electric bill would be about $50 less per month and I would save nearly $24,000 over 20 years. Obviously, with no upfront costs, I would be cash flow positive from day one.

The second option was the "Pay only for what you produce" plan. This required a $3,125 investment, but cut the price of my energy by 51%. Over 20 years, I would have saved nearly $29,000 and I would have gotten my money back by the fourth year.

But in my opinion, the smartest way to go is the "Full pre-pay plan." In this scenario, you pay for the amount of power your system will produce up front. It would have cost me only $0.066 per kWh, compared to the $0.188 I currently pay my electric company. That's a savings of 66% and I would save about $125 per month. My initial investment of $10,000 would be recovered by year six, and over 20 years, I will have saved more than $36,000.

Uber

In one of the more disruptive innovations in the last decade (just ask a taxi driver), Uber's innovations in bringing ridesharing to the masses have been not only to make it flexible, but to adjust the cost of a ride in real time, based on local supply and demand. Needless to say, the ability to increase the cost of a ride according to demand makes the Uber price model quite interesting, as Uber receives a share of the cost of every ride. Please watch the following 1:38 video.

Video: Ublyup - Uber Dynamic Pricing (1:38)

Credit: Ublyup Training Videos. "Ublyup - Uber Dynamic Pricing." YouTube. August 26, 2016.

People depend on Uber to provide a reliable ride at all times. That’s what our riders tell us they want and expect.

The way we are able to always come through for them is with a dynamic pricing system we call surge pricing.

When demand for rides exceeds the supply of drivers on the road, like after a big event, prices go up to encourage more drivers to go online. The increase in price is proportionate to demand. And as soon as more drivers are available, prices go back down. Riders always know the price before they request. The surge amount is prominently displayed, and when it's more than double, they must type the amount themselves to confirm.

We also provide fair estimates up front when riders enter their destination. And offer to send notifications when prices return to normal. It’s important for us to give everyone a choice to have a safe, comfortable ride whenever they need one.

Dynamic pricing enables us to meet high demand.

Riders always know the surge amount up front.

Surge amounts are prominently displayed.

When double, riders type the amount to confirm.

Fare estimates are available in the app.

Network Innovation

Network Innovation jls164

Introduction

In understanding innovation synthesized between multiple parties collaborating, consider the ability of network innovation to help widen your organization's capabilities, or to help launch a program quickly. In many circumstances, organizations may be hesitant to collaborate due to perceived risk, but consider that much of this may be mitigated with honest conversation and well-structured non-disclosure agreements.

From The Ten Types of Innovation:

"Network innovations provide a way for firms to take advantage of other companies' processes, technologies, offerings, channels, and brands–pretty much any and every component of a business. These innovations mean a firm can capitalize on its own strengths while harnessing the capabilities and assets of others. Network innovations also help executives share risk in developing new offers and ventures. These collaborations can be brief or enduring, and they can be formed between close allies or even staunch competitors."

Network Innovation in the Sustainability Space

Wendy Schmidt Oil Cleanup XPRIZE

Although it was lost in much of the continuing news coverage of the Gulf Oil Spill, a scant three months after the Deepwater Horizon accident began and the same month the well was stopped, XPrize launched a $1.4 million open competition to improve oil spill cleanup technology at sea. No matter how unconventional the means, it's hard to argue with the end: A little more than a year after it was launched, the Oil Cleanup XPRIZE resulted in "quadrupling what had been the current industry rate of surface oil recovery."

If you're unfamiliar with XPRIZE, their mission is as elegant as it is specific:

Founded in 1995, XPRIZE, a 501(c)(3) nonprofit, is the leading organization solving the world’s Grand Challenges by creating and managing large-scale, high-profile, incentivized prize competitions that stimulate investment in research and development worth far more than the prize itself. The organization motivates and inspires brilliant innovators from all disciplines to leverage their intellectual and financial capital for the benefit of humanity. XPRIZE conducts competitions in five Prize Groups: Learning; Exploration; Energy & Environment; Global Development; and Life Sciences. Active prizes include the $30 million Google Lunar XPRIZE, the $10 million Qualcomm Tricorder XPRIZE, and the $2.25 million Nokia Sensing XCHALLENGE.

Below is a brief look at the process and the Elastec/American Marine team that would go on to take the Oil Cleanup XPRIZE. Please watch the following 6:19 video.

Video: Team Elastec/American Marine--Wendy Schmidt Oil Cleanup X CHALLENGE (6:19)

Credit: XPRIZE. "Team Elastec/American Marine--Wendy Schmidt Oil Cleanup X CHALLENGE." YouTube. October 6, 2011.

[Audio from news clips]

We’re Team Elastec. We’re from Carmi, Illinois. We've been in the oil spill business for twenty years. We’ve got over a hundred employees now, so it's a big, big family here.

We build oil spill recovery equipment. We’re the largest manufacturer in the US, and definitely a contender in the world. We export to over 100 countries. We go out in the field and actually make our equipment work ourselves. During the twenty years we've been manufacturing, we’ve worked in many spills: Russia, China, South America.

We were on the Gulf of Mexico during the Deepwater Horizon incident. There was about 300,000 barrels of oil that we eliminated. So we've been around the business for a while.

So we heard of this X PRIZE challenge, certainly anybody in the industry is going to recognize that’s a pretty high mark to hit. When we first started I gotta admit we said we don't know if we can do this. 2500 gallons a minute was, I felt, was unreachable. Nobody's gonna do that. We like challenges and this certainly was a challenge.

We've been building skimmers with grooves on drums. We just moved our groove technology onto a disk and gave it a shot. We built a single disc prototype. This is the first time it's ever been shown. The first time.

We have a disc with grooves on one side, and then it's a smooth surface on the other side. And we were all just amazed at what it did.

You can see the recovery rate on the right-hand side is much higher than the recovery rate on the left-hand. We rigged up just a very quick little hydraulic motor to be able to suspend in the oil, and then actually just set scrapers up onto it and filled up a 32-gallon garbage can in 35 seconds or something like that. Now that was the Eureka moment for me anyway.

You're not just improving the surface area. You're actually making a channel that the oil will want to adhere to - what we call a meniscus effect. It’s kind of a capillary thing. It's almost like a vacuum that's pulling that into the groove and allows us to spin at very high RPMs. So it can spin faster than competitors and we’re capturing more oil.

This is the largest skimmer we've ever built. I don't think I've ever ordered so much material for one particular project. In our world, ninety days to build something from concept is pretty challenging. So we pulled out all the stops. We have a rather deep infrastructure. We have 140 employees, our own fabrication shops, our own machine shops. So we're able to pull this sort of thing off. But it took a lot of resources, a lot of overtime. It was late nights and early mornings and it wasn't just for us to build, but to pull in all of our vendors. We’ve got technologies here that's never been used before in any other device.

[No narration. Video of skimmer working.]

We never count our chickens before they're hatched. Now the wave action is going to be the biggie.

[No narration. Video of skimmer working.]

Perfect. It doesn’t get much better than this. I think right now we’re the team to beat. We raised the bar quite a bit, so we'll see. Failure’s not an option. We didn't come here for second place.

DeepWater Desal / Data Center Co-Location Project in Monterey Bay

While the project overall has been relatively quiet in the news, the proposed DeepWater Desalinization project is an interesting example of teaming two facilities with complimentary needs. The DeepWater Desal plant chose the location because of both demand and the fact that it would have easy access to the end of the Monterey Submarine Canyon just offshore. The ability to place the water intake more that 100 feet undersea is valuable to mitigate any impacts on what is one of the US's most valuable marine environments.

But, the access to deep water has the drawback that the water is very cold, which is not desirable for desalinization... so the goal is to co-locate a 150mW data center in the complex. Data centers have tremendous cooling needs, so the plant will first route the cold water to the data center to provide server and infrastructure cooling, and then the warmed water will then flow through for desalinization. Considering Monterey Bay is only about 75 miles to the heart of Silicon Valley's data center demands–and the area already is in need of its own data infrastructure–the project appears to be a win all around. Please watch the following 3:02 video.

Video: DeepWater Desal aiming to build desalination plant in Moss Landing (3:02)

Credit: KSBW Action News 8. "DeepWater Desal aiming to build desalination plant in Moss Landing." YouTube. June 17, 2014.

We are beginning tonight with what could be a first-of-its-kind facility located in Moss Landing. It would combine a Deepwater Desal plant and a data center that would solve water issues on the central coast and improve energy efficiency for big tech firms.

Action news reporter May Chow has some insight on the plan, is live with tonight's top story.

Dan...cooling data centers with cold water isn't anything new. in fact nearly every data center is liquid cooled today. So what's different about this idea?

No one has ever thought to do it using the Monterey Bay. The founders behind Deepwater Desal -- a company that plans to build a Desal facility at Moss Landing to supply drinking water to Santa Cruz and Monterey counties -- say they have a solution that would solve both sustainability and environmental issues.

GRANT GORDON: "leverage the seawater that's going to be drawn in for the deep water Desal project for desalinated water to support the region, Monterey Bay region, and use that cold sea water to cool the data center complex in exchange for taking the heat that's produced from the data centers and raising the ambient temperature of the water prior to going into the Desal plant."

Chief operating officer Grant Gordon says this system will provide a more efficient solution for not only processing seawater into potable water, but also cooling data centers. He sees it as a win-win situation for the central coast and the silicon valley.

The Soquel creek water district has a future water source. And tech companies reduce their carbon footprints and utility bills.

GRANT GORDON: "these are all household names, everyone in the valley would know...(reporter softly begins listing names...)
GRANT GORON: "any of those companies...Facebook, Apple, Intel, Cisco, Hewlett Packard, Microsoft, LinkedIn, Amazon, any of those companies...eBay...would all be likely candidates for this type of project."

The proposed project, which is still in its early stages, would be built on the Moss Landing power plant site, and process 25-million gallons of water per day. The water would be drawn from the Monterey submarine canyon -- limiting the impact on marine life.

GRANT GORDON: "this has not been done anywhere in the world before. The elements have been done. Certainly data centers and Desal plants have been created, but the integration of the two has never been done before."

Another draw to bring data centers here on the central coast…there isn't one south of Silicon Valley all the way to LA. So having a facility here would upgrade fiber optics and increase bandwidth for the central coast, which is much needed here. Dan?

The Deepwater Desal team submitted its project application on May 30th to the state lands commission, which will begin the environmental review process. After which, it will be forwarded to the California coastal commission for review. This review will take between 18 to 24 months before any work can begin.

Freightliner, et al. / Department of Energy Supertruck initiative

While there have been some other "tractor trailer of the future" initiatives, the Freightliner joint venture is not a showpiece: It is what they believe to be the future of their company.

This effort represents the best of network innovation with almost 50 companies, suppliers, and universities coming together on the project, including MIT, Oak Ridge National Laboratory, Walmart, A123 Systems, and Michelin. Because they believed the truck, trailer, and all systems needed to work in full concert toward the unified goal of efficiency, the team had the foresight to fully involve those organizations and suppliers holding expertise in the respective areas. As could be expected for what would be a worldwide initiative, the needs for communication and open collaboration are considerable, and this is perhaps at the very heart of why this initiative was so important in the first place: Experts in respective areas need to be networked in meaningful ways if they are to solve the "big" problems. (This is not unlike the XPRIZE philosophy, as well.)

The result of taking a network innovation approach? A 115% fuel efficiency improvement while in actual use on public roads. The implications for transportation would be significant, to say the least.

If you'd like to see what HTML5 can do, give their Supertruck initiative site a look (after allowing a few seconds to load). Quite a compelling use of the technology. Please watch the following 4:17 video.

Video: Freightliner Supertruck: Amerika's 'truck of the future' (4:17)

Credit: Transport Media. "Freightliner Supertruck: Amerika's 'truck of the future'." YouTube. March 26, 2015.

The fifty percent target was definitely a daunting goal. We want to develop the most fuel-efficient truck running on the streets in North America. The question was how aggressive would we need to be.

Each individual manufacturer received a Department of Energy Supertruck grant. We immediately embraced it because it fit exactly our long-term strategic plans. We want continuously to improve fuel efficiency. They not only wanted us to look at technologies that could be implemented in say the next five to seven years, but also technologies that were 10 years or plus out.

We had to do a clean sheet approach. We looked at the very beginning over the external aerodynamics of the vehicle. You try to take your ideas and shape them into something. Then test it. You say, “Okay, is that aerodynamic?” And once you get there it is a question of how to turn that into a real truck.

So the first phase was identifying and measuring our baseline and then figuring out what we needed to do to get to fifty percent. The cooling team had to work with the aerodynamic team to say, “Okay, yes, we both need to meet our goals but how do we do it together?”

Within the Supertruck program, we are able to leverage the knowledge and expertise of the global Daimler organization - experts within North America both in Portland as well as in Detroit. We have our global hybrid center in Japan. Our powertrain experts came from Detroit and from Germany. You can really leverage expertise across the globe, across different national labs, and that really accelerates the development of the technologies.

The Supertruck features the integrated Detroit powertrain. You can downspeed the engine to reduce the frictional losses and achieve fuel consumption reduction. In order to overcome the trade-off between aerodynamics and cooling, we came up with an innovative grille design. So open the grill only in times when cooling is required, and close the grill under high vehicle speeds in order to improve aerodynamics.

Waste heat recovery was not something that heavy-duty trucking had at all. So what we try and do with heat recovery devices or systems is to recover some of that energy especially from exhaust, which just escapes out of the tailpipe, and utilize that to drive the truck itself, thereby reducing fuel consumption.

The contribution to trailer aerodynamics was certainly a very surprising thing to us. We looked at the nose cone, trailer side skirts, and the boat tail. Over two-thirds of the benefit actually comes from the trailer.

How that affected the tractor - things like equal role and hybrid - we had more energy to recuperate simply because the tractor and trailer were more aerodynamic as a system. At the end, we achieved one hundred fifteen percent freight efficiency improvement on public roads in Texas between San Antonio and Dallas. We also saw better than 12 miles per gallon fuel consumption which is amazing and never heard about in the industry.

A one-percent of freight efficiency over the 10,000 vehicles running at a hundred twenty thousand miles per year – I mean you're saving millions of gallons of fuel

We have to invest in the future - not just of our company or the economy of the United States, but in the future of the entire planet. We were able to work on very high-risk, high-reward technologies and provide functional demonstration on a long-haul vehicle The super truck program provided us the opportunity to see what's really possible: not today, not next year, but many years into the future.

Structure Innovation

Structure Innovation jls164

Introduction

Structural innovations can take many forms, but when you peel them all back, they tend to have one characteristic in common: commitment. While the book calls out some of the more tactical facets of structural innovation, the roots of structural innovation begin in an organization taking a stand to differentiate.

If you have a finance background, think of companies with the classic "wide moat" profile. At some point in their history, they aligned significant resources behind one vision, and, in the process of doing so, created a seemingly insurmountable separation between themselves and peers. Think of Caterpillar, for example, a classic wide moat business and structural innovator. As we will see, while you may not associate Whole Foods with a "wide moat" profile, some of their early decisions have indeed created structural innovations which would be difficult for competitors to replicate.

From The Ten Types of Innovation:

Structure innovations are focused on organizing company assets–hard, human, or intangible–in unique ways that create value. They can include everything from superior talent management systems to ingenious configurations of heavy capital equipment. An enterprise's fixed costs and corporate functions can also be improved through Structure innovations, including departments such as Human Resources, R & D, and IT. Ideally, such innovations also help attract talent to the organization by creating supremely productive working environments or fostering a level of performance that competitors can't match.

Structure Innovation in the Sustainability Space

Whole Foods Culture of Transparency

Here's about as structural an innovation an organization could have internally, so much so that one could imagine it would be virtually impossible to "retrofit" onto an existing organization: The salaries and bonuses of every employee at Whole Foods are available to be "looked up" by other employees. Co-founder John Mackey instituted the program very early in the life of the company, taking a stand to eliminate office politics and personal agendas in favor of making goals visible and attainable. I'd like us to focus on this very specific aspect of Whole Foods structural innovation, as opposed to taking the book's more broad view of their 'culture' as the structural innovation.

John Mackey's logic as stated to Business Insider is quite elegant:

Whole Foods co-CEO John Mackey introduced the policy in 1986, just six years after he co-founded the company. In the book, he explains that his initial goal was to help employees understand why some people were paid more than others. If workers understood what types of performance and achievement earned certain people more money, he figured, perhaps they would be more motivated and successful, too.

"I'm challenged on salaries all the time," Mackey explained. "'How come you are paying this regional president this much, and I'm only making this much?' I have to say, 'because that person is more valuable. If you accomplish what this person has accomplished, I'll pay you that, too.'"

Watch the Inc. Live interview of John Mackey, entitled The Benefits of Radical Transparency, where he discusses his approach to compensation and disclosure. He covers it more passionately and succinctly in this interview than in most all writings.

Pittsburgh's Department of Innovation and Performance

The City of Pittsburgh has taken a rather unique structural innovation approach through their creation of a Department of Innovation and Performance in February 2014. While the creation of the Department itself is certainly a structural differentiator, consider that Debra Lam, the Chief Innovation & Performance Officer, is one of only six executive-level positions in the city. Add in the factor that CIOs still aren't terribly common in the corporate world, let alone government, and we have the makings of a structural innovation for the City of Pittsburgh.

The description of the Department of Innovation and Performance platform:

We live in an age of infinite possibilities. The Department of Innovation & Performance (I&P), created in February 2014, reflects Mayor Peduto's vision for the Next Pittsburgh and our team's role in fostering a culture of accountability and innovation at levels and sectors of society. I&P aims to transform Pittsburgh into a world-class city through not only managing information systems and delivering technology, but by pursuing data-driven decision-making, creating sustainable solutions, and driving quality performance.

While technology is an important component to this, it is not the only end goal. There is no silver bullet, fancy platform, or expensive software that can magically transform the City. The City's greatest asset is us, its people, and our commitment to collaboration and better serving the City government and its residents.

Beyond servicing the City and its departments and agencies internally with strategy and hardware, I&P has a wider external component. We work to better service all residents of Pittsburgh by closing the digital divide, fostering entrepreneurship and innovation, improving access and application of information, and empowering neighborhoods, especially vulnerable communities. We want citizens to better utilize their resources and have the information to make better decisions and take action.

To underscore the importance of enabling innovation in the Next Pittsburgh, the Department takes responsibility for keeping the concept of a fresh, innovative Pittsburgh at the forefront of minds, as well. It has created an Innovation Community Map as just one tactic to help reinforce what will be a long-term strategy.

Process Innovation

Process Innovation jls164

Introduction

Process innovations are arguably one of the most evolved forms of innovation, in that they have roots in literally hundreds of years of product and service development. From the cotton gin to the assembly line, process innovation is a classic form of innovation, as well as one which typically allows the organization intellectual property protection, and therefore, some level of defensible differentiation over time.

From The Ten Types of Innovation:

Process innovations involve the activities and operations that produce an enterprise's primary offerings. Innovating here requires a dramatic change from “business as usual” that enables the company to use unique capabilities, function efficiently, adapt quickly, and build market-leading margins. Process innovations often form the core competency of an enterprise, and may include patented or proprietary approaches that yield advantage for years or even decades. Ideally, they are the “special sauce” you use that competitors simply can't replicate.

“Lean production,” whereby managers reduce waste and cost throughout a system, is one famous example of a Process innovation. Other examples include process standardization, which uses common procedures to reduce cost and complexity, and predictive analytics, which model past performance data to predict future outcomes–helping companies to design, price, and guarantee their offerings accordingly.

Process Innovation in the Sustainability Space

MBA Polymers Revolutionary Recycling Separation Process

The world of recycling and waste minimization is one which feels to continuously be on the edge of a revolutionary development but is many times fraught with frustration. Regardless of the constraints and struggles on the part of the recycler, all paths lead to the classic problem on the demand side of recycled plastics: There are relatively few applications for black, low quality, downcycled plastics, which are typically problematic in molding and processing. These are the types of plastics that are downcycled into parts like automotive wheel well liners and fairings (if you open the hood of your car and see a black, "swirly" finished plastic, this is low grade, downcycled plastic.) Like all supply and demand balances, if all plastics are recycled into black, low-quality plastics of limited marketable use, the price per ton is going to be suppressed.

Needless to say, if plastics can not only be recycled and repelletized by type, color, and other properties, it would represent a revolution in recycling and plastics. This is what MBA Polymers can do, and has roughly 60 patents to cover the process by which it does so.

From an excellent Pop Sci article on Mike Biddle:

"But by the time he saw Puckett's film, Biddle had quietly achieved what most thought impossible: He had discovered how to separate certain mixed plastics completely. This was no mere down-cycling. Biddle could take the plastic from, say, a laptop, reduce it to its purest form, and sell it back to a computer company to make another laptop. What's more, at his facility in Richmond, California, Biddle could produce recycled plastic with as little as 10 percent of the energy required to make virgin. In a world where people use 240,000 plastic bags every 10 seconds, where passengers on U.S. airlines consume one million plastic cups every six hours, where consumers in total discard more than 100 million tons of plastic annually, closing the loop on production and recycling could reduce global dependence on oil, the source material for virgin plastic. It could conceivably influence not only the price of oil, but global flows of trade as well. And it could dramatically reduce the wholesale smothering of communities across Asia and Africa with hazardous e-waste. If Biddle could convince people to give him waste rather than dump it around the globe, he could conceivably change the world."

Please watch the following 10:51 video. If the video is not displaying on the page, please view the video on the external site. The transcript is also available on the external site.

Video: We can recycle plastic (10:51)

Credit: Mike Biddle. "We can recycle plastic." TED.

I'm a garbage man, and you might find it interesting that I became a garbage man because I absolutely hate waste. I hope within the next 10 minutes to change the way you think about a lot of the stuff in your life. And I'd like to start at the very beginning. Think back when you were just a kid. How did you look at the stuff in your life? Perhaps it was like these toddler rules. It's my stuff if I I saw it first. The entire pile is my stuff if I'm building something. The more stuff that's mine, the better. And of course, it's your stuff if it's broken. Well, after spending about 20 years in the recycling industry, it's become pretty clear to me that we don't necessarily leave these toddler rules behind as we develop into adults. And let me tell you why I have that perspective. Because each and every day at our recycling plants around the world, we handle about one million pounds of people's discarded stuff. Now, a million pounds a day sounds like a lot of stuff, but it's a tiny drop of the durable goods that are disposed each and every year around the world, well less than one %.

In fact, the United Nations estimates that there's about 85 billion pounds a year of electronics waste that gets discarded around the world each and every year. And that's one of the most rapidly growing parts of our waste stream. And if you throw in other durable goods like automobiles and so forth, that number well more than doubles. And of course, the more developed the country, the bigger these mountains. Now, when you see these mountains, most people think of garbage. We see above-ground mines. And the reason we see mines is because there's a lot of valuable raw materials that went into making all this stuff in the first place. And it's becoming increasingly important that we figure out how to extract these raw materials from these extremely complicated waste streams. Because as we've heard all week at Ted, the world's getting to be a smaller place with more people in it who want more and more stuff. And of course, They want the toys and the tools that many of us take for granted. And what goes into making those toys and tools that we use every single day? It's mostly many types of plastics and many types of metals.

And the metals we typically get from ore that we mine in ever widening mines and ever deep mines around the world. And the plastics we get from oil, which we go to more remote locations and drill ever deeper wells to extract. And these practices have significant economic and environmental implications that we're already starting to see today. The good news is we are starting to recover materials from our end-of-life stuff and starting to recycle our end-of-life stuff, particularly in regions of the world, like here in Europe, that have recycling policies in place that require that this stuff be recycled in a responsible manner. Most of what's extracted from our end-of-life stuff, if it makes it to a recycler, are the metals. To put that in perspective, and I'm using steel as a proxy here for metals because it's the most common metal, if your stuff makes it to a recycler, probably over 90% of the metals are going to be recovered and reused for another purpose. The plastics are a whole 'nother story. Well less than 10% are are recovered. In fact, it's more like 5%. Most of it's incinerated or landfilled. Now, most people think that's because plastics are a throw away material, have very little value.

But actually, plastics are several times more valuable than steel. And there's more plastics produced and consumed around the world on a volume basis every year than steel. So why is such a plentiful and valuable material not recovered at anywhere near the rate of a less valuable material? Well, it's predominantly because metals are very easy to recycle from other materials and from one another. They have very different densities properties. They have different electrical and magnetic properties, and they even have different colors. So it's very easy for either humans or machines to separate these metals from one another and from other materials. Plastics have overlapping densities over a very narrow range. They have either identical or very similar electrical and magnetic properties, and any plastic can be any color, as you probably well know. So the traditional ways of separating materials just simply don't work for plastics. Another consequence of metals being so easy to recycle by humans is that a lot of our stuff from the developed world, and sadly to say, particularly from the United States, where we don't have any recycling policies in place, like here in Europe, finds its way to developing countries for low cost recycling.

People, for as little as a dollar a day, pick through our stuff. They extract what they can, which is mostly the metals, circuit boards and so forth, and they leave behind mostly what they can't recover, which is, again, mostly the plastics. Or they burn the plastics to get to the metals in burnhouses like you see here, and they extract the metals by hand. Now, why this might be the low economic cost solution? This is certainly not the low environmental or human health and safety solution. I call this environmental arbitrage, and it's not fair, it's not safe, and it's not sustainable. Now, because the plastics are so plentiful, and by the way, those other methods don't lead to the recovery of plastics, obviously. But people do try to recover the plastics. This is just one example. This is a photo I took standing on the rooftops of one of the largest slums in the world in Mumbai, India. They store their plastics on the roofs. They bring them below those roofs into small workshops like these, and people will try very hard to separate the plastics by color, by shape, by feel, by any technique they can.

And sometimes they'll resort to what's known as the burn and sniff technique, where they'll burn the plastic and smell the fumes to try to determine the type of plastic. None of these techniques result in any amount of recycling in any significant way. And by the way, please don't try this technique at home. So what are we to do about this space-age material, at least what we used to call a space-age material is plastics. Well, I certainly believe that it's far too valuable and far too abundant to keep putting back in the ground or certainly stand up and smoke. So about 20 years ago, I literally started in my garage tinkering around, trying to figure out how to separate these very similar materials from each other, and eventually enlisted a lot of my friends in the mining world, actually in the plastics world. And we started going around to mining laboratories around the world because after all, we're doing above-ground mining. And we eventually broke the code. This is the last frontier of recycling. It's the last major the material to be recovered at any significant amount on the Earth. And we finally figured out how to do it.

And in the process, we started recreating how the plastics industry makes plastics. The traditional way to make plastics is with oil or petrochemicals. You break down the molecules, you recombine them in very specific ways to make all the wonderful plastics that we enjoy each and every day. We said there's got to be a more sustainable way to make plastics, and not just sustainable from an environmental standpoint, sustainable from an economic standpoint as well. Well, a good place to start is with waste. It certainly doesn't cost as much as oil, and it's plentiful as I hope that you've been able to see from the photographs. And because we're not breaking down the plastic into molecules and recombining them, we're using a mining approach to extract the materials. We have significantly lower capital costs in our plant and equipment. We have enormous energy savings. I don't know how many other projects on the planet right now can save 80 to 90% of the energy compared to making something the traditional way. And instead of plopping down several hundred million dollars to build a chemical plant that will only make one type of plastic for its entire life, our plants can make any type of plastic we feed them.

And we make a drop in replacement for that plastic that's made from petrochemicals. Our customers get to enjoy huge CO₂ savings. They get to close the loop with their products, and they get to make more sustainable products. In the short time period I have, I want to show you a little bit of a sense about how we do this. It starts with metal recyclers who shred our stuff in the very small bits. They recover the metals and leave behind what's called shredder residue. It's their waste. A very complex mixture of materials, but predominantly plastics. We take out the things that aren't plastic, such as the metals they miss, carpeting, foam, rubber, wood, glass, paper, you name it, even an occasional dead animal, unfortunately. And it goes in the first part of our process here, which is more like traditional recycling. We're sieving the material, we're using magnets, we're using air classification. It looks like a Willy Wanka factory at this point. At the end of this process, we have a mixed plastic composite, many different types of plastics and many different grades of plastics. This goes into the more sophisticated part of our process and the really hard work, multi-step separation process begins.

We grind the plastic down to about the size of your small fingernail. We use a very highly automated process to sort those plastics not only by type, but by grade. And at the end of that part of the process, come little flakes of plastic, one type, one grade. We then use optical sorting to color-sort this material. We blend it in 50,000-pound blending silos. We push that material to extruders where we melt it, push it through small dye holes, make spaghetti-like plastic strands, and we chop those strands into what are called pellets. And this becomes the currency of the plastics industry. This is the same material that you would get from oil. And today we're producing it from your old stuff, and it's going right back in to your new stuff. So now, instead of your stuff ending up on a hillside in a developing country or literally going up in smoke, you can find your old stuff back on top of your desk in new products, in your office, or back at work in your home. And these are just a few examples of companies that are buying our plastic, replacing virgin plastic to make their new products.

So I hope I've changed the way you look at least some of the stuff your life. We took our clues from Mother Nature. Mother Nature wastes very little, reuses practically everything. And I hope that you stop looking at yourself as a consumer. That's a label I've always hated my entire life. And think of yourself as just using resources in one form until they can be transformed to another form for another use later in time. And finally, I hope you agree with me to change that last toddler rule just a little bit to, if it's broken, it's my stuff. You for your time. Thank you.

Vortic

I had the pleasure of judging an entrepreneurship competition at Penn State when Vortic, as a business venture, was but a glimmer in the eye of a team of upperclassmen, but even then, their focus, determination, and innovation was quite evident.

Vortic's core business is taking a uniquely stylish (and patent pending) approach to watchmaking, by upcycling century-old pocketwatch movements into beautiful, Corning Gorilla Glass-faced watches. Because of the variation of these old pocketwatches, they created a proprietary case design and fit process for each individual movement, which is then 3D printed and machined individually.

Their decidedly high-end and high-tech approach to upcycling resulted in their Kickstarter reaching its $10,000 goal within 12 hours, eventually landing at $41,035. Since then, the popularity of their watches means that you now have only the opportunity to purchase a backorder slot for your own Vortic... starting at $1,395.

Please watch the following 8:35 video:

Video: How Watches Are Made: Vortic Watch Co. (Fort Collins, Colorado) (8:35)

Credit: Worn & Wound. "How Watches Are Made: Vortic Watch Co. (Fort Collins, Colorado)." YouTube. August 8, 2018.

TYLER WOLFE, CO-FOUNDER: Most of what I do here was definitely not training that I got in a classroom. For the most part, everything that I know that I do I learned hands-on. Here we're going all the way from computer model to finished product under one roof. I do something new every single day. Every single watch is different.

R.T. CUSTER, CO-FOUNDER: We wanted to start Vortic because we wanted to make a truly American-made watch. We figured we could make the cases and crowns and everything else but we needed an American-made movement and no one was making them for resale at that time. You know, this is 2013, 2014 we were talking about this and so as we did research, we found those old pocket watches that have been orphaned from their their original cases and we realized that people are literally throwing away those pieces of American history when they were scrapping those gold cases. We figured, you know, we can solve that problem and save those pocket watches and also make one heck of a product at the same time and so we put that idea on Kickstarter in 2014 and apparently it was a good idea because we still exist.

[MUSIC]

R.T. CUSTER, CO-FOUNDER: So in the beginning of Vortic, we decided to use metal 3D printing, and it's actually called direct metal laser sintering for our product because we couldn't afford the minimum order quantities from contract manufacturers. So, if I wanted to make a watch, and I wanted that one manufacturer to just make the case, we would have to order five hundred to a thousand watches worth of cases. The inherent problem with salvaging these pocket watches is they're all different sizes, they're all different configurations, and they were made by, you know, ten different companies across eighty years of production. And so, 3D printing actually solves a lot of those issues because we can make just a couple dozen at a time for a reliable and achievable cost, and then we could design all of our fixtures and post-processing to adjust those cases to fit the one-of-a-kind movements that we use. We kind of tripped into what seemed like a really good idea, and it's also been a lot of fun and a huge learning experience, as the 3D printing technology has come a long way since we started.

TYLER WOLFE, CO-FOUNDER: So step one to bring a lot of the manufacturing in-house was buying a couple manual machines, and that was our introduction into machining. So I would take a case, sit down there and use hand cranks to to move the machine around, and it would take me somewhere between three and four hours to do a case, and when I say three to four hours, that's three to four hours of hands on the machine. So with our Haas CNC Mills, I have to spend a lot more time setting them up. So, designing the fixture, and creating the tool paths, testing a program, but once I make one part it's essentially the press of a button to duplicate it. That's the huge difference. Manual machines are great for making one unique part, but the CNC machines can duplicate that part over and over and over again. Everything we do, I just I like to think we're combining old technology with the most efficient new technology to make something that's totally unique, beautiful, interesting with a story and not charge $50,000 for it.

[MUSIC]

R.T. CUSTER, CO-FOUNDER: Our American artisan series is what we call it right now, basically our pocket watch conversion, it was actually inspired by railroad grade pocket watches. Those railroad grade ones actually are lever set. What that means is there's a lever actuator system near one o'clock on the dial and you actually had to remove the whole front bezel including the glass of the pocket watch to pull that lever in order to set the time, and it was literally a safety mechanism on the railroads back then so you couldn't accidentally change what time it was, but for us it makes for a huge engineering problem that we had to solve. And so we invented this casing system for railroad grade pocket watches that we call the railroad edition of the American artisan series. We decided to mill this railroad edition from a block of titanium so that we could make sure absolutely everything is perfect, and we could control the entire process on our CNC Mills. Really, what we're able to make now is the product we originally wanted to make, this amazing railroad grade pocket watch. Now we have a home for those.

TYLER WOLFE, CO-FOUNDER: Due to the fact that this lever set system requires access to the movement it is a huge design issue. I don't know the number of iterations that we did before we got to this this final version, but it just, every day, we were like how are we gonna solve this. We use the big wave board and we just kind of sat down and said, what's possible? They would throw out a crazy idea, and I'd say, I guess I can try and make that see if it works, let's see if this works, see if that works. It'd be very strange to sell a watch where a customer can touch the dial, and it'd be very strange to sell a watch that's not water resistant. So those two things alone are really what motivate the removable bezel. First of all, it uses a cam lock system instead of a thread. Before it was very difficult to get the front of the watch off and when you take off that bezel the crystal is still in the watch so the customer who does not have any access to the dial. This product is definitely a result of iteration and thinking outside of the box.

R.T. CUSTER, CO-FOUNDER: What's next for us is fully modern watches, and we're still going to make the artisan series with the old pocket watches, but we can layer on a new product line that we can completely design from the ground up, work with the Swiss experts making modern movements for us, and build a product that is truly Vortic, that says it on the dial. And I think that all really ties in well to what we stand for and our tagline, which we say America wasn't assembled, it was built. And we say that because every watch we make is built here. We try to make as much of it in Colorado, in this building, as we possibly can, and I think that's what separates us from companies that make thousands of the same thing is that every watch is handmade just for you and that to me is the difference between built and assembled.

Product Performance Innovation

Product Performance Innovation jls164

Introduction

Product Performance innovation is another classic (and rather broad) form of innovation, as it covers those innovations that allow you to outperform competitors on the attribute or benefit level. As the authors briefly allude to, attributes in and of themselves are difficult to defend. As we have seen in our work with means end chains, strategy comes from chains of meaning and are therefore highly defensible. When unidimensional, "one-trick pony" brands are surpassed by competitors on that "one trick," it can be extremely hard to recover. In fact, it could be argued that a competitor can simply leverage all of your past marketing to slingshot past you on that attribute. Product performance is certainly a core type of innovation, but one which must be used judiciously.

From The Ten Types of Innovation:

Product Performance innovations address the value, features, and quality of a company's offering. This type of innovation involves both entirely new products as well as updates and line extensions that add substantial value. Too often, people mistake Product Performance for the sum of innovation. It's certainly important, but it's always worth remembering that it is only one of the Ten Types of Innovation, and it's often the easiest for competitors to copy. Think about any product or feature war you've witnessed–whether torque and toughness in trucks, toothbrushes that are easier to hold and use, even with baby strollers. Too quickly, it all devolves into an expensive mad dash to parity. Product Performance innovations that deliver long-term competitive advantage are the exception rather than the rule.

Still, Product Performance innovations can delight customers and drive growth. Common examples of this type of innovation include: simplification to make it easy to use an offering; sustainability to provide offerings that do no harm to the environment; or customization to tailor a product to an individual's specifications.

As evidenced throughout this Lesson, we might tend to disagree with Keeley and the other authors who take a narrow view of sustainability and represent it as only a part of product performance. Sustainability can infuse strategy everywhere, open entirely new opportunities, and represent new spaces for innovation in many cases.

Product Performance Innovation in the Sustainability Space

Toyota Prius

It may seem like almost a lifetime ago, but there was a time when hybrid drive technology, first commercialized by the Toyota Prius, was downright revolutionary. Toyota had enough of a product performance advantage, and perhaps more importantly, committed to the Prius' success, that the Prius model continues to account for about half of all hybrids sold in the US, with Toyota owning nearly 64% of the US hybrid market.

Please watch the following :50 Prius commercial.

Video: Toyota Prius - Commercial (:50)

Credit: amarad. "Toyota Prius - Commercial." YouTube. July 3, 2006.

They thought it impossible for the world to be round.

They laughed when somebody dreamed that man could fly.

They said that no one would make a car with an electrical motor while there was still a drop of oil on this planet.

Or that someone in a wheelchair could never cross a city.

Or that a car can't be made that produces water instead of smog.

So we say thank you, because when something is impossible, we make it reality.

Toyota.


FLIR One

FLIR has dominated the worldwide thermal imaging market for decades, typically selling highly specialized imaging solutions for thousands or tens of thousands of dollars each. FLIR describes their approach to core markets as such:

Pioneers in thermal imaging, we were founded in 1978, originally providing infrared imaging systems that were installed on vehicles for use in conducting energy audits. Today our advanced systems and components are used for a wide variety of thermal imaging, situational awareness, and security applications, including airborne and ground-based surveillance, condition monitoring, navigation, recreation, research and development, manufacturing process control, search and rescue, drug interdiction, transportation safety and efficiency, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives threat detection.

What FLIR accomplished with the FLIR One was taking technology that was overwhelmingly inaccessible to the average consumer and making it available (first) as an add-on hardware component for the iPhone for around $200. While there was an initial early adopter "gadget geek" audience that knew FLIR, it eventually began to gain traction as a wider audience that recognized that the FLIR One could have far greater and more practical applications.

One of those applications is the ability to bring thermal imaging's application in energy auditing to the forefront. While professional energy audits might rely on thermal images of the interior and exterior of the home generated from one of FLIR's $10,000 units, more DIY-inclined homeowners began to realize that they could do ongoing energy audits using the FLIR One as they build, retrofit, or remodel their homes.

Please watch the following 9:51 video. Energy use application begins at 5:24 in the video.

Video: FLIR ONE Thermal Camera Unboxing and First Images (9:51)

Credit: BenjaminNelson. "FLIR ONE Thermal Camera Unboxing and First Images." YouTube. January 8, 2015.

Hi, everybody. I just got this FLIR ONE thermal camera. This is pretty cool. I'm very excited about this. What it is is it's a thermal camera accessory for iPhone 5 and 5S. I already happen to have that type of a phone.

I spent $250 for this. It's kind of neat. What it does is it comes with sort of a slimline case, so you put your phone in there. And then it has a hole on the back that lines up with this part right here. And then on the bottom, this really acts kind of like a dock. It really has a thunderbolt connection at the bottom, just like the cord for your iPhone 5 has on it. It's the same type of connection. And then you slide the phone right down into there, and it just clicks together.

Now, with the FLIR ONE thermal camera, it does have its own battery, and it does charge up separately. It comes with a mini-USB cable. Funny, though, it doesn't come with a little wall power adapter, but if you already have an iPhone, you probably already have one of these. So this is what I used. I just plugged it into this to charge it up. The other thing is that the FLIR ONE accessory itself makes the foam a little thicker and also just a little bit longer. The goofy thing is if you want to plug your headphones in while the camera's installed, they actually give you a little adapter. It's just a extension for the headphones, so that it literally just goes right through there so your headphone plug can reach if you want to listen to music while you're doing thermal photos, I suppose.

Basically, on the back, there's two cameras. One's the thermal, and one's visible light, and then the device puts the two together. Basically, the visible camera gives you the edges of the image. And the thermal camera isn't very high-resolution, but by putting together the thermal image and the visible spectrum image, you can tell what you're looking at.

Right here, this is the power switch. So right now it's off. And if I flip it to on, it also-- integrated right in here is sort of a little mini lens cover. So basically, turn the phone on, punch in your secret password if you have one, and then go to the FLIR app. This is a free app. You just download it off the App Store.

There's also a couple of other apps available for the FLIR camera, as well including a panorama and some other things. But we just go to the app. And what it's going to tell you is, make sure it's on, and then pull this down to calibrate it. Give it a second, then let go.

And now you've got your thermal camera. For example, I've got a coffee cup full of hot water here, and if I take a look at that through the thermal camera, it's pretty cool. Right away you can see that heat difference. It's also got little crosshairs in the middle listing temperature. It's in Fahrenheit. I could kick it over to centigrade if I wanted. Then on the settings for this, there are different color scales. So right now I'm looking at the iron, which is the default color scale, but we can flip through to different ones-- black and white, rainbow. And what they do is they kind of show the heat in different ways. You might be looking at the coldest part of the image, the hottest part of an image. There are different ways you might want to look at it. So it's nice that it has that available in there.

The other thing that's kind of neat is when you take an image here, it's going to save a photo. You can also set this up so that it saves it into your camera roll as well, which I thought was a neat feature. Now, it's not real high-res. It's only 640 by 480, so it's not super-megapixel here. Relatively low-res, but it gives you lots of information. Here's something kind of cool. I had the coffee cup sitting there for, I don't know, 30 seconds. Let's move the coffee cup. You can still see where I set the coffee cup on the table, and if I put my hand right there, I can feel that. I can feel the table's a little bit warmer. Pretty neat.

There are some other fun settings in here. That spot meter can be turned on and off. If you're in the dark, you can turn the light on the iPhone on. Settings-- let's change a few things, go from Fahrenheit to centigrade, some things like that.

Now, you can also shoot video with the FLIR ONE. All you have to do here is press this little button. It kicks it over to the video mode. It's just like taking video with your iPhone normally. The difference is it's only 640 by 480 video. It does shoot each 264, but it's a low frame rate. It's, like, six or seven frames per second, so it's going to be pretty jerky. It's not smooth video at all.

OK, we're now in my living room. You're looking at an outside wall. It's January. It's a couple degrees below zero Fahrenheit right now. We have a wood stove in my living room. This is the chimney pipe for my wood stove, but let's take a look at the wall through the FLIR ONE thermal camera.

And right away you can see some vertical lines and a horizontal line. Those are the studs in my wall. That's the actual house framing. Where the studs are it's a little colder, because that's solid wood instead of fiberglass insulation. So if I look around, I can actually use this as a stud finder, which is pretty amazing all by itself.

The dark spot there on the left-- that's my back door. It's a big glass door. Glass is not a very good insulator. And one thing I am glad to see is that the stove pipe here hardly shows up any different from anything else. That stovepipe isn't cold. That's good. It means it's not letting heat out of my house.

But up at the very top here-- that's the connection where the stove pipe leaves the house-- and if I look at that, that's that dark spot. That part's really cold. So that might be a good candidate to see if maybe I could insulate that. But just being able to take a look at framing in a building is pretty neat. You can see where there is and isn't insulation. Here's another neat thing if I look to the right a little bit. There's a window. The window is dark because it's cold. But the camera only has a certain thermal range. So just like an auto iris, if you put something really cold and something really hot next to each other, those colors are going to change. Like if I frame out the cold window, we go from the oranges back over to the purples. So a good way to use this device, actually, is kind of move it around a little bit. You get a much better sense of the differences between hot and cold by moving it around like that.

Here's something else that's fun to look at. In the upper left here, there's a bright spot and a dark spot. The dark spot is actually a heating vent, because my furnace is off right now and it's made out of metal, so it's cold. And that bright spot is a light, and it's a can light, and if you see it's a little darker on the left. That can light is basically up in the attic, and it looks like there's less insulation on the left side of it than on the right side of it.

So overall, the FLIR ONE camera is pretty easy to use. It adds a little bit of heft to the phone. It makes it a little bit larger. It fits in the hand pretty nice, but it's not the sort of thing that I would walk around with this on my iPhone all the time. It's a little bit of a pain that it uses the slimline case on the phone to line it all up. I'd liked the case that I had on my phone. And you would think it's a little bit of a pain to switch back and forth between the two cases, but typically, I think most people are going to use these a whole bunch but at a crack. You might swap the case and then use this all day, looking at where you do and don't have insulation in your house, for example. It does charge separately from the phone. In the latest firmware, it is set up now that when you plug in the mini-USB cable that comes with it, once the FLIR ONE is charged, it will then continue to charge the iPhone. That's an update they did recently, which looks like that's kind of a cool thing.

And still, here's that coffee cup with hot water in it-- pretty neat. This is great for looking at electronics, looking at heating, ventilation, and air conditioning. It was pretty interesting looking at my furnace and my water heater. I haven't done any external views of my house yet, but I have already found a spot in my attic where there's a strange circle of cold, and I think that may have been where there was a leak, for example.

But check out the FLIR ONE. It's pretty neat. And please head on over to EcoProjecteer.net to see my full blog review of this cool little thermal camera.

Product System Innovation

Product System Innovation jls164

Introduction

Product system innovations are those which have a unique way of retaining customers over time, as they create deep and tightly interwoven connections with the user.

Even in creating product system innovation, we can consider creating open product systems (think Google's android, or IFTTT, which we will examine in a moment) or closed product systems (think Apple's elegant connectivity between its devices... and only its devices).

From The Ten Types of Innovation:

Product System innovations are rooted in how individual products and services connect or bundle together to create a robust and scalable system. This is fostered through interoperability, modularity, integration, and other ways of creating valuable connections between otherwise distinct and disparate offerings. Product System innovations help you build ecosystems that captivate and delight customers and defend against competitors.

Product bundling, or taking several related products and selling them in a single package, is a common example of a Product System innovation. In the twenty-first century, technology companies in particular have used this type of innovation to build platforms that spur others to develop products and services for them–including app stores, developer kits, and APIs. Other Product System innovations include extensions to existing products, product and service combinations, and complementary offerings–which individually work just fine on their own, but are far better together (even ones as humble as peanut butter and jelly).

Product System Innovation in the Sustainability Space

IFTTT

First off, please know IFTTT is pronounced "ift" as if you are saying "gift" without the "g"... hopefully, this will save you improvising pronunciations that may sound somewhat like an angry cat.

If you're not familiar with IFTTT, it stands for "if this, then that," and is at the core of "the internet of things" you hear about. In essence, IFTTT is an open platform that allows connecting different apps and devices to each other to be used as triggers. These "if this, then that" statements are called "recipes," as they allow you to combine different devices, trigger and action ingredients, at will. Many of these recipes can be used in smart homes, and there are many ways IFTTT can be used to make smart devices in your home even smarter and more efficient.

For example:

IF my iPhone is farther than 20 miles from my home, THEN automatically turn the Nest thermostat in my home to Away Mode, thereby saving energy.

IF my Adam soil sensor shows soil moisture below a certain point, THEN to send my neighbor a text to check on my garden, as she is an expert gardener and can tell if it needs some water while I am away (instead of automatically triggering my drip irrigation from the soil sensor).

IF the summer evening forecast is to be less than 70 degrees, THEN change the color of my Philips Hue smart led bulb to a certain shade of blue to remind me to open the windows.

IFTTT is now the connecting logic hub for devices from Apple, Amazon (Alexa), Google (Nest, et al.), Samsung (Smartthings) and hundreds of others, so it is a massive system with amazing potential for making many facets of life more efficient and sustainable.

While this video covers the "Works with Nest" platform, all of the interactions they cover can be accomplished with IFTTT today. Please watch the following 4:12 video.

Video: Introducing Works With Nest (4:12)

Credit: Google Nest. "Introducing Works With Nest." YouTube. June 24, 2014.

[MUSIC BEGINS PLAYING]

MATT ROGERS: All around the world, the home is the center of people's lives. It's where you start your day and end your day. It's where you raise a family and make memories with the people you love.

So wouldn't it be cool if our homes could be more aware? If our homes could learn from us and help take care of us? At Nest, we do just that.

It all started with the Nest Learning Thermostat. Then, came Nest Protect. But for us, that was just the beginning. Our goal has always been to bring this kind of thoughtfulness to the rest of your life. That's what Works with Nest is all about.

Works with Nest makes it possible for your Nest thermostat and smoke alarm to interact with the things you use every day. Because we make connections between these different parts of your life, we can deliver personalized comfort, safety, and energy savings without you having to do a bunch of work. We've been working with companies big and small to make this a reality. And we're very excited about we've been able to do.

TRAVIS BOGARD: UP is a combination of a band that you wear on your wrist and an application on the phone that together help track your movement throughout the day. By connecting your UP and your Nest, you can have this complete, effortless experience. Because UP's right on the body, we have this rich, contextual set of information about what the person's doing in the moment.

So that means those days that you might wake up a little bit earlier, before you even get out of bed, we can let Nest know that. So it can then adjust the temperature in the room to start to be for my daytime.

This is about technology not for technology sake, but technology in service of a better life-- helping us be more human, allowing us to live our lives better.

MARC BITZER: Why would we ever bring the thermostat and washer together? That's a good question. If you look at it from a perspective of energy consumption, it's an easy one. These are big energy consumptions at the home, and these are also the ones which require a lot of day to day interaction with the consumer. You have already the thermostat communicating to the utility company, it's much easier if there's one signal going to the Nest. And that is disseminated through the household to all appliances to basically reduce consumption now, because we're the peak. It's just a tremendous consumer benefit that just happens in the background.

PHIL BOSUA: LifX is an LED light bulb that you control with your smart phone. When we first heard about the Nest developer program, we were really excited to be part of it. With Nest Protect and LifX, when the smoke alarm event is triggered, we can pulse your lights red, which can help you see in the dark, as well as give extra notification that there's a problem in the house, which is especially good if you're hearing-impaired. Nest brings this whole other dimension to LifX. Who would have thought by combining Nest products and LifX products, we could help save lives.

JOHANN JUNGWIRTH: Automotive industry is in a very deep change. I foresee that in the next 10 years, the changes are going to be more substantial than in the last 50. Likely your car today interfaces with your home through the garage door opener.

After learning about the Nest developer program, we thought about, how can we take this to the next level? How can we integrate the car better with your home? As you get into your car and drive home, the car will, in the background, send the estimated time of arrival to your Nest thermostat. So your home can be at the right temperature as you arrive at home.

Taking workload off of customers-- it will improve safety, it will increase comfort, because people just don't have to think about all these things. It's just great-- like magic in the background.

MATT ROGERS: At Nest, we believe these experiences are the future. We're able to connect things inside and outside your home to better anticipate your needs. We're already doing some pretty incredible things, but this is just the beginning. And we can't wait to see what's next.

[MUSIC CONTINUES PLAYING]

Canadian Refillable Beer Bottle

It may seem simple, but the Canadian refillable beer bottle product and service system begins with the Canadian beer industry agreeing in 1992 to unify on an Industry Standard Bottle (ISB 341ml AT2), a specific design, which can be refilled up to 16 times before being recycled. Although the Canadian brewers had partnered on refill programs since 1927, the AT2 can be given much of the credit for making the system efficient and modern.

This seemingly simple unified system approach to collecting and refilling beer bottles has resulted in Canada having a tremendously successful and beneficial program.

From the wonderfully detailed article by Isabel Teotonio at the Toronto Star:

The Beer Store, co-owned by Labatt Brewing Company, Molson Coors Canada and Sleeman Breweries, will take back anything it sells at its 447 Ontario locations: bottles, caps, cans, cases, kegs, plastic bags. About 94 per cent of all containers and 99 percent of all refillable beer bottles are returned.

The Beer Store's deposit return system began in 1927. Since then, it has recovered 75 billion beer bottles.

In 2007, the province introduced the Ontario Deposit Return Program and The Beer Store expanded its recycling program to accept containers purchased at the LCBO and wineries for a refundable deposit of 10 or 20 cents.

That first year, 63 per cent of containers were recovered. By 2012, the return rate was 81 per cent.

The fact that all of these beverage containers aren't being created from scratch is a boon to the environment — and wallet.

According to a TBS report, in 2011 both The Beer Store and the Ontario Deposit Return Program diverted 454,478 tonnes of beverage alcohol containers from Ontario landfills, saving 2.9 million gigajoules of energy, and avoiding 205,090 tonnes of greenhouse gas emissions, the equivalent of removing 40,210 cars off the road for a year.

Keeping those containers out of garbage bins and blue boxes saved Ontario taxpayers about $40 million in waste management costs. Please watch the following 1:26 video.

Video: A day with a beer bottle (1:26)

Credit: Toronto Star. "A day with a beer bottle." YouTube. June 27, 2013.

An empty beer bottle can be returned, refilled, and resold all in one day. Here's how. So, have a good day.

While the article notes some of the reasons why refillable bottles fell out of favor in the US–transportation to increasingly distant breweries being one–we can hope that the surging market share of craft and local breweries may bring back a renaissance of the refillable glass bottle.

Service Innovation

Service Innovation jls164

Introduction

In considering how organizations can innovate in the support and supplemental servicing of their primary offer, remember that the definition of "service" may actually be quite wide. Because of the potential breadth of this innovation, it is one which we many times see tightly overlapping other innovations, especially Customer Engagement.

Consider also the case of "halo services," those services which may be infrequently used by customers, but are invaluable to the brand and word of mouth of a company. One classic example of the halo service? Herrod's Department Store in London, which has a motto of "Omnia Omnibus Ubique"–"All Things for All People, Everywhere"–and which has cemented that reputation with myriad stories of being able to source anything for its customers. One of their latest offerings is being able to buy gold "off the shelf," up to and including a 12.5kg bar (Harrod's bank) (value of about 500,000 Euros).

From The Ten Types of Innovation:

Service innovations ensure and enhance the utility, performance, and apparent value of an offering. They make a product easier to try, use, and enjoy; they reveal features and functionality customers might otherwise overlook; and they fix problems and smooth rough patches in the customer journey. Done well, they elevate even bland and average products into compelling experiences that customers come back for again and again.

Common examples of Service innovations include product use enhancements, maintenance plans, customer support, information and education, warranties, and guarantees. While human beings are still often at the heart here, this type of innovation is increasingly delivered through electronic interfaces, remote communications, automated technologies, and other surprisingly impersonal means. Service can be the most striking and prominent part of the customer experience, or an invisible safety net that customers sense but never see.

Service Innovation in the Sustainability Space

AmazonSmile Program

A bit of an unexpected bonus in the service department is the AmazonSmile program, which donates .5% of all of your purchases made through smile.amazon.com to the charity of your choice. It really is that simple, as all of the products, prices, and navigation of the site is identical, the only difference is that the Amazon logo changes to the AmazonSmile logo, and "Supporting: [your chosen charity]" appears below the search box.

From the program's About page (Amazon Smile):

"AmazonSmile is a simple and automatic way for you to support your favorite charitable organization every time you shop, at no cost to you. When you shop at smile.amazon.com, you'll find the exact same low prices, vast selection and convenient shopping experience as Amazon.com, with the added bonus that Amazon will donate a portion of the purchase price to your favorite charitable organization. You can choose from nearly one million organizations to support.

[...]

The AmazonSmile Foundation will donate 0.5% of the purchase price from your eligible AmazonSmile purchases. The purchase price is the amount paid for the item minus any rebates and excluding shipping & handling, gift-wrapping fees, taxes, or service charges. From time to time, we may offer special, limited time promotions that increase the donation amount on one or more products or services or provide for additional donations to charitable organizations."

For those already making a significant amount of purchases through Amazon, it is a seamless way to donate to their favorite charity. Please watch the following 1:26 video.

Video: Amazon Smile Video (1:26)

When you shop at smile.amazon.com, amazon donates a half a percent of the purchase price to your favorite charity.

There are almost a million charitable organizations to choose from, including innovative research hospitals, international relief organizations, conservation charities, local pet shelters, school groups, and more.

Customers who shop at smile.amazon.com have already supported tens of thousands of different organizations, generating millions of dollars in Amazon Smile donations. Thanks to donations from Amazon Smile, charities are accomplishing amazing things.

JAMES SCHREDER, THE NATURE CONSERVANCY: When our supporters shop at smile.amazon.com, The Nature Conservancy is able to protect and restore incredible places all around the world.

SCOTT HARRISON, CHARITY:WATER: It’s thanks to these donations from Amazon Smile that we’re able to continue serving people with clean and safe water in Malawi.

ROBERT MACHEN, ST. JUDE CHILDREN’S RESEARCH HOSPITAL: Thanks to the support that we’ve received from Amazon Smile, we’ll continue to make sure that no family ever receives a bill from St. Jude Children’s Research Hospital.

Only purchases made at smile.amazon.com will result in donations. Start at smile.amazon.com every time you shop to support your favorite charity. It’s the same amazon you know: same products, same prices, and same great service. You shop, amazon gives. Smile.amazon.com. Bookmark it today. 

Subway Symphony & Heineken

Not every service has to be directly linked to the product offering and can instead be a service acting to reinforce what the brand stands for. In the case of Heineken's partnering with Subway Symphony, we could consider it more as a 'service to all subway goers'... and one which could also generate tremendous goodwill (and PR value) for Heineken. Imagine the conversations generated on the first day when subway travelers heard the change.

It is an attempt for Heineken, a brand overwhelmingly associated with youth, cities, and technological hipness, to partner with an organization to reinforce their identity and generate goodwill.* Please watch the following 2:35 video.

Video: LCD Soundsystem's James Murphy Makes Subway Sounds (2:35)

[MUSIC PLAYING]

[ON SCREEN TEXT]: What if the NYC Subway sounded like this?

JAMES MURPHY: I'm James Murphy. I am a musician who lives in New York. I used to be in a band called LCD Soundsystem which played its last show in New York at Madison Square Garden three years ago almost. I'm a DJ and a record producer and mad about town. It's kind of a tough city and expensive city, but the Subways are sort of like very, very egalitarian, purist, New York thing. Runs all night. So I have kind of have a love affair. It's like the best of New York, I think, the Subway. I'm sort of noticing that the Subway sounds quite brutal. I'm missing an opportunity at the turnstile. At the moment, there's this kind of unpleasant beep. I said given that all that information is already in the turnstile, why don't we just make it a nice sound? Just make it pleasant.

[ON SCREEN TEXT]: James Murphy's MTA audio concept. Turnstiles at each station generate different notes from a given harmonic set.

JAMES MURPHY: Recently when I read that the Subway system's going to move to a tap and ride rather than a swipe, I thought this is my chance, really. I wanted to be part of the installation of the Subway inherent, so it didn't cost any money. So, it's just... there's already going to be a thing that makes a sound, why can't it make the sound, the nice sound? The more I thought about it, it's an opportunity for music. Why not make the worst times in Subways, the best times? So, the more people going through, the more times the turnstiles gets turned, if you have different notes that are in agreement it would make music. It's just an opportunity to have something quite beautiful in a place where something beautiful seems impossible or unlikely.

Credit: Wall Street Journal. "LCD Soundsystem's James Murphy Makes Subway Sounds." YouTube. February 24, 2014.

*The feasibility of the program at all may be quite slim, as the MTA notes about James Murphy and the Subway Symphony program:

"We have heard from him, and as we've told him many times, we cannot do it. The tones are an ADA element for the visually impaired, and we won't mess with them — much less take turnstiles out of service and risk disabling them for an art project. (It would be a very cool project, don't get me wrong, but we can't mess with turnstiles that handle 6 million customers a day for it.)

[…] As a condition of filming [the promo ad] in the subway, we made them acknowledge that we can't and won't do it."

Perhaps the ADA compliance could be met by other means, but it may be difficult to satisfy the requirements if the tone is an aural identifier.

Channel Innovation

Channel Innovation jls164

Introduction

Channel innovation is another type which is far-reaching and frequently triggered with other types of innovation. When we examine channel innovations, consider not just the core offering, but also complimentary products or offerings which may undergo channel innovation as a byproduct of other innovations. A very basic example could be that the advent of the automobile allowed myriad channel innovation in the delivery and fulfillment of non-automobile related products, such as milk, ice, or beer. In a more modern example, we may someday see channel innovation in the delivery of emergency medical supplies as a byproduct of the advent of the modern drone.

From The Ten Types of Innovation:

Channel innovations encompass all the ways that you connect your company's offerings with your customers and users. While e-commerce has emerged as a dominant force in recent years, traditional channels such as physical stores are still important— particularly when it comes to creating immersive experiences. Skilled innovators in this type often find multiple but complementary ways to bring their products and services to customers. Their goal is to ensure that users can buy what they want, when and how they want it, with minimal friction and cost and maximum delight.

Channel innovations are particularly sensitive to industry context and customer habits. Flagship stores can be an extremely valuable Channel innovation, creating signature venues that showcase a firm's brand and offerings, while pop-up stores may be useful for a short, sharp splash at the holidays. In contrast, selling directly through e-channels or other means can reduce overhead costs, maximizing margins and cost advantage. Or you might pursue indirect distribution or multi-level marketing, either of which recruits others to shoulder the burden of promoting and/ or delivering an offering to the end customer.

Channel Innovation in the Sustainability Space

Vermeer BP714 Block Press

While a block press may sound terrifyingly uninteresting to the majority of us, Vermeer has created a tool born from the sustainability efforts of the Vermeer Charitable Foundation which allows those in need to create incredibly strong bricks on site using soil and a small amount of water and cement. This makes structurally-reliable buildings a possibility in places where the transportation of building materials–let alone brick–would have been virtually impossible in the past.

So we could consider the true innovation of the Vermeer BP714 to be that it changes the channel through which building materials can be acquired by those in remote or desolate villages.

From an Equipment World profile on the machine:

"The BP714 takes these materials and presses them into 4″x14″x7″ blocks that when cured nearly rival the strength of traditional concrete block. It cranks out three blocks a minute which are stacked and cured for 28 days. The blocks have an interlocking design so you don't need mortar to secure them. There are also cavities designed into the blocks for running rebar, roof tie downs, electrical conduit and plumbing. The blocks don't have to be fired to cure, so kilns and all the energy they require are not needed.

According to Terry Butler, operations manager for Vermeer, the Vermeer Charitable Foundation provided the impetus behind the project and currently has four projects going on around the globe. The foundation also supported the creation of a separate entity called Dwell Earth, which provides technical support and ancillary equipment necessary to set up and run a portable block plant."

Please watch the following 5:40 video.

Video: VermeerPress (5:40)

Okay we're making bricks. We've made, oh I suppose, around sixty or eighty this morning already. I’m told we’re making one every 35 seconds. You can see a number of them coming in here. I'll walk you through the whole process from beginning to end, and I'll show you the whole process. We’ve got a lot of people working here.

Moving around, there you see the machine working, but that's the end of the process. Let’s walk down here.

We begin the process down in this little hole. Here these guys - they're digging out the clay that we need for the bricks. Wave at the camera! All right! Wave at the camera! Yea, that’s right!

They’re digging the dirt out. Then they carry it over here and it gets put in the wheelbarrow. And then it gets sifted. This gentleman here is sifting it through a quarter inch screen. We have a screen on either side. Usually we have two people here. Barry’s down there digging up the extra to get rid of it. You can see we’ve got two sides to the screen. So we have one on either side sifting through the dirt.

At the same time we sift the sand right here. It’s a different kind of setup. But that's also a sifting unit. So we sift the sand. We need three buckets of dirt to one bucket of sand. Then we carry it up here. We mix the dirt and the sand all together on the board. And after they get it mixed up good, we put in cement and they mix the cement in. They just turn it over and over and over again until it’s mixed in good.

And after they get the cement mixed in, they’ll add water. We have a little problem with the water content.  When it’s sunny it dries out. When it’s cloudy, then we’re a little wet, so we’ve got to keep adjusting to get just the right amount.

They’ll shovel that over and over and over again until it’s all one color. Then they’ll add a little bit of water to it.

When they get the water done they’ll carry it up to the machine. We have two of those outfits going. Here’s another crew just finishing up with the mixture. They’ll pour it in the bucket. Then they’ll carry it up here to the machine. Then they put it in the hopper like he’s doing now. This young man is learning to run the machine. Wayne’s helping him.

There comes a brick. Wipe the excess off the top. And then these other two gentlemen carry the brick up and put it in place. Meanwhile he goes back to make a new brick.

And there comes another brick. Brush it off, and then we're back where we started. It gets carried up to the brick pile. We have to put plastic under it and then plastic over it. It can’t dry out too quickly. It takes seven days to cure. We’ve got, I think, 20 bricks in a line. 1, 2, 3, 4… Four complete lines and starting the 5th. So we’re approaching a hundred bricks. We’re at 80-some.

The idea is to keep the machine working all the time. The operator is still learning to do it. It looks like they had a broken brick here they’ll have to put back in the hopper.

We can see these guys. They've added the cement mix now. So they're going to be ready to add water. Looks like they’re gonna add water right now.

Okay, signing off.

Credit: ChristAidIntl. "VermeerPress." YouTube. September 29, 2013.

Kiva Microfinance

In developing countries, small business loans can be scarce, and those available may have obscenely high interest rates of 90% and higher annually. Needless to say, this can put small business owners in developing countries under the influence of what amounts to predatory loan rates. The goal of Kiva, and most microfinance, is to circumvent that predatory lending channel of finance altogether and allow small business in developing countries to thrive with reasonable loans.

While in existence for decades, microfinance, or the practice of small peer to peer lending, gained significant traction in 2006 when the founder of Grameen Bank, Muhammad Yunus, won the Nobel Peace Prize "for their efforts to create economic and social development from below."

Kiva is one of the most popular peer-to-peer, not-for-profit microfinance operations now, though it may seem that there could be a shift in coming years as for-profit microfinance has begun to appear in Mexico and other countries.

Please watch the following 5:05 video.

Video: The Power of Kiva (5:05)

Kiva.org is a website who’s mission is to connect people through lending to alleviate poverty. Kiva brings small loans to entrepreneurs all around the world who could use a little bit of money to start their own business and in the last six years has helped 800,000 small businesses in over 60 countries get started. Kiva is a word in Swahili that means unity.

When you make a loan to someone across the planet, and you help them out and then they pay you back over time it helps you see how interconnected you are with someone else even if you may never really visit them. 183 people lended to Jose with the connect the power of technology today I can now connect with a woman in Uganda who wants to buy a cow to start a dairy business. I can partner with her, not actually donate money to her, but actually partner with her as an investor. I can invest in the informal sector of the developing world which is forty to sixty percent of the developing world economy, on a personal one to one basis. Through that relationship she can economically empower herself and then pay back that loan and I can do this in 5 clicks or less.

What I get excited about is how technology can connect us in ways that were previously unimaginable. It's allowing people who previously left out in the financial services system to actually get access to quality, affordable, ethically provided financial services like a microloan through Kiva.org. Behind us you have some of the best banks in Nicaragua, but they will not make a loan to her. She seems too risky. But she’s now taken six loans through a Kiva field partner. She’s paid them all back in full.

If you're poor, you don't actually have a lot of options. If someone's going to give you an option at an affordable price, you’re going to steward that money very carefully, you are going to be very judicious about how it’s used, and you know that not only is your future loan access dependent on it but everyone else in your community is counting on you to pay it back so that they can get access to the Internet communities capital.

To give you a sense of the growth of Kiva, in their first year we raised four hundred fifty thousand dollars in twenty-five dollar increments from the Internet community and now we raise one million dollars every three days. It's accelerated in the last six years at an incredible rate and we're really hopeful that more and more people will want to get involved.

My name is Marvin. I am Nicaraguan. I have been running this farm for fifteen years I work 12 to 15 hours a day. My family is my wife and three children the youngest one is 4 years old. Her name is Jimena. As long as I am able to support my family, this is my struggle, my work, so that they have everything. In Nicaragua it is important to have outside help because if you're with your hands like this and you don't have anywhere to go, you can't do, you can't act. Kiva provided the loan that allowed me to increase my crop. I have more income and we are improving and that is why I feel grateful. Kiva is looking for the small ones to lift them up, to support them. It is a big deal because this does not happen here in Nicaragua.

What I can't tell, I feel here, I feel it here that Kiva is great. I feel that my daughter now has a future. When I go around the world and visit micro entrepreneurs, what you find is a ton in common with entrepreneurs right in Silicon Valley or New York City or all around the world who are building for-profit businesses that scale to you, affect hundreds of millions of people I think being an entrepreneur is fundamentally about believing tomorrow it's going to be better than today even if there's an insurmountable challenge whether it's feeding your family or actually changing the way something works that really needs to be improved. I think entrepreneurs are fundamentally optimistic people. They're willing to take risk and they're willing to bet on themselves and basically on humanity in order to create a better world.

Credit: Kiva. "The Power of Kiva." YouTube. November 29, 2012.

Brand Innovation

Brand Innovation jls164

Introduction

Think of a brand not as a static "thing" (and please, especially not a logo), but as a living, breathing persona which builds character, associations, and friends over time.

Compelling brands, like people, have a way of building this positive karma over time, and also, like people, attract those who share their interests or admire some quality in them. There are those people who you have a transactional relationship with, and those with which you proudly choose to associate. For a wide variety of reasons, from hiring top talent to corporate culture to long-term profitability, you want to be in that latter group.

Within innovating brands, the tactics can be virtually anything, and we may find an increase in brand equity (a la "karma") as a byproduct of virtually any positive innovation, and especially those which also happen in the sustainability space. In fact, it can be extremely difficult to separate what a brand stands for and its sustainability efforts, and I would argue that you shouldn't be able to.

From The Ten Types of Innovation:

"Brand innovations help to ensure that customers and users recognize, remember, and prefer your offerings to those of competitors or substitutes. Great ones distil a “promise” that attracts buyers and conveys a distinct identity. They are typically the result of carefully crafted strategies that are implemented across many touchpoints between your company and your customers, including communications, advertising, service interactions, channel environments, and employee and business partner conduct. Brand innovations can transform commodities into prized products, and confer meaning, intent, and value to your offerings and your enterprise.

Brand innovations include extensions that offer a new product or service under the umbrella of an existing brand. Alternatively, they might make a company stand for a big idea or a set of values, expressing those beliefs transparently and consistently. In business-to-business contexts, Brand innovations aren't limited to the final manufacturer or the consumer-facing producer of a product; branding your components and making customers aware of their value can build both preference and bargaining power."

Brand Innovation in the Sustainability Space

Shinola Watches

In the midst of Detroit's long bankruptcy, Shinola helped to reinvigorate a trade which has been long dormant in the United States: watchmaking.

The sustainability slant in this profile comes from the fact that Shinola did not just create a homebase in Detroit, it built full operations including marketing and operations, and, more importantly, had its watchmakers Swiss-trained in how to assemble watches. To say this is an investment in worker training would be an understatement, and you could consider that after receiving that training, you have a group of employees who are trained in a very valuable skilled trade, not just for Shinola, but for themselves.

Shinola is partially owned by Bedrock Manufacturing Company, LLC (co-founded by the founder of Fossil Watches) which also purchased storied outdoor outfitter Filson a few years ago, so we can certainly see that there is long-term strategy underlying the Shinola brand.

Please watch the following 3:06 video.

Video: A Visit To Shinola Detroit (3:06)

WILLIE HOLLEY: I've never heard of a watch manufacturer here in Detroit, let alone the United States. It's an honor to be a part that and to bring something like that to the city after all the little trials and tribulations that’s happened here. It's just amazing to bring jobs here to the city - especially, the city that I live in.

HEATH CARR: Well, we were talking about how we would create an American-made accessories brand with accessories that we were passionate about - one of those being watches and leather goods and bikes and journals. Detroit was a natural for us because of the manufacturing heritage here.

So we built a factory that we’re sitting in today that can manufacture 500,000 units a year. We had a partner in creating Shinola, which is Rhonda. They designed the factory and actually built all of the equipment. And it was all shipped from Switzerland.

JACQUES PANIS: The parts are brought in from Switzerland and are assembled right here in the facility in Detroit. Doing that in this country hasn’t been done in decades, so doing that, I think, is what really makes them very, very special.

DANIEL CAUDILL: The Shinola design is really about being simple. It's not about the bells and whistles. It's about great quality, beautiful materials, and simple design. A lot of detail underneath and on the inside, so the product that you buy today is something that you'll still want to wear ten years from now.

Obviously, there’s a huge movement right now in regards to American manufacturing. People want to know where their food is from, who's making their shoes, who’s making their bag. Shinola fits in that world.

HEATH CARR: Shinola for me and, I think, for the team here, is about a community of people who are focused on quality over quantity, and making an investment in a purchase of something that you'll have for a lifetime - whether that's a bike or a watch or a leather good. And we hope to convince folks that you can do this. You can make just about anything that you would dream up in the United States.

DANIEL CAUDILL: It really is about these people that we work with - from the people in the factory to the people in our bike factory to the designers - everyone coming together. This is a really big family.

JACQUES PANIS: People here are proud to be doing what they are doing. We all love this brand. This brand is something that has created blood, sweat, and tears among all of us.

WILLIE HOLLEY: Bringing a fresh new breed of manufacturing here to my city is a - that’s a big deal. I am honored that Shinola, itself, is willing to take a chance here in the city.

Credit: Hodinkee. "A Visit To Shinola Detroit." YouTube. May 7, 2013.

Seaqualizer

In the case of the Seaqualizer, it is starting its brand's life in a fairly fortuitous place at the intersection of government, NGOs, and sportsmen, and was actually hatched as part of a WWF crowdsourcing competition.

From Millie Kerr's article, "The Seaqualizer Gives Doomed Fish a Fighting Chance":

Hoping to find innovative solutions to the problem, the World Wildlife Fund launched the International Smart Gear Competition in partnership with industry leaders, scientists, and fishermen. As sophisticated as the competition sounds, its solutions aren't being made in a James Bond-esque lab: According to WWF, most are being pioneered by the people closest to the problem—fishermen themselves.

One of the most innovative tools to come out the competition is the SeaQualizer. Created by two fishing buddies from South Florida, this hydrostatic descending device returns victims of bycatch to their native depths. Unlike fish caught in shallow lakes, many deep-water dwellers won't survive if you simply toss them back, because as they ascend toward the surface, changes in pressure wreak havoc on their internal organs. By the time you reel them in, they're experiencing barotrauma and will only pull through with assistance.

Fishermen historically helped bycatch recompress by venting, a process that involves puncturing the fish's swim bladder to release the gas that built up during ascension. It's as barbaric as it sounds and often leads to injury or death, but until around four years ago fishermen had no alternative—in some places, venting was even required by law.

Jeffrey Liedermen and Patrick Brown, the duo behind the SeaQualizer, had heard about an interesting alternative: descending devices that lower fish to appropriate depths—no stabbing required. But early descenders lacked precision. Some were crates fishermen manually lowered to the seafloor; others required the user to constantly tug on the line. Liedermen and Brown saw an opportunity and took to Brown's parents' garage to build a solution.

The Seaqualizer is so effective that its use has drawn endorsements from both the World Wildlife Fund and NOAA, which "reopened portions of the Pacific after testing the efficacy of descending devices in partnership with the Sportfishing Association of California and WWF."

While the product may have opened the door, the brand has a tremendous opportunity to capitalize on the opportunity to become a responsible brand and a staple on boats worldwide. Perhaps, we will see a day not far in the future when day charter deep sea fishing tours will not only use this product, but proudly tout "We use SeaQualizer" on its materials.

Please note the first couple minutes of this NOAA video on the joint effort show fish with barotrauma, and so have bulging eyes and the occasional stomach swell. Just to be aware. Please watch the following 3:57 video.

Video: Recompression Devices: Helping Anglers Fish Smarter (3:57)

On Screen Text: Too many fish released by recreational fishermen are dying. NOAA Fisheries, state agencies, recreational fishermen, and the Pacific Fishery Management Council have come together to address this problem.

[music, images of rockfish fishing]

On Screen Text: Recompression Devices - Helping Anglers Fish Smarter

Pete Gray, Sport Fisherman and "Let's Talk HookUp" Radio Host: It's so important for us to care about the future of our resources. Nobody else is going to do it but the guys out there fishing.

Nick Wagner, NOAA Fisheries: The big problem with barotrauma is that these fish are at the surface and if you don't release them using one of these descending devices, they're going to die - they're going to get eaten by a bird or succumb to their injuries. Nobody wants to see that.

Jeffrey Liederman, Developer of the SeaQualizer: Barotrauma is the effects that are caused from bringing a fish up from deep water too fast. Most bottom fish have an air bladder to keep them buoyant and when you bring those fish up from the bottom, that air bladder expands, and it'll push his stomach out, his eyes will start bulging and once you release that fish at the surface he has so much gasses built up inside of his abdomen the fish can't swim back down.

Ken Franke, Sport Fishing Association of California: About a year ago, we were really impacted by a lot of closures out in California for rockfishing. When you catch a certain number of them statewide, the reaction is by the agency is to close the areas to fishing. So a number of private vendors developed devices called descending devices and said, "Hey, this is a cool device. That fish that you guys are so worried about, if you clip it onto this device and send it back down to the bottom, the device will release it free, and the fish will be alive and well."

Nick Wagner: There's several different types of recompression devices. They've all been invented mostly by the recreational fishing community who's concerned about this issue. And it's not necessarily that one device is better than the other, but they can be used in different circumstances and there's a lot of options for fishermen to choose from.

So, we're doing a tagging study offshore that looks at the survival of rockfish released using these recompression devices and our results so far show that 80 to 85 percent of the fish are living and that's a really big deal. So, even if you take a conservative estimate and say that 50 or 75 percent of the fish that you're releasing are not mortalities, are alive, that really changes the fish counts, the number of fish that are considered to die and that really affects how we manage our fisheries.

One of the things that we're doing and the purpose of today's trip is to test out the different devices, get the fishermen familiar with these devices and have them tell us how they think they're working and then share that with their friends.

Steve Lauriano, Recreation Fisherman: I didn't know anything about barotrauma before I came out here. I didn't know what was being done to get these fish back into the water safely so they can be released safely. I was very excited about that. It was nice to see the fishing guys - the boats, working with the scientists to come up with a solution for this problem so that we can all come out here for years to come and fish.

Ken Franke: The environmental groups brought these devices to us. The NOAA scientists volunteered as well as the Department of Fish and Wildlife in California to come and monitor the studies. The commercial passenger boats are bringing in the recreational fishermen, and we're working with the media to get the message out. It's kind of like one of those amazing stories that you just never hear. So we're pretty excited about it.

Nick Wagner: Everybody's a winner in this project, especially the fish. But the fishermen are happy because they're not wasting fish, they're releasing the fish that they don't want to keep. The fisheries managers are happy because it gives us more options potentially to manage the fishery, and environmentalists are happy because fish are not dying.

Credit: NOAA Fisheries. "Recompression Devices: Helping Anglers Fish Smarter." YouTube. June 13, 2014.

Customer Engagement

Customer Engagement axj153

Introduction

Customer Engagement is another type of innovation which can be quite far-reaching strategically and overlap with many other innovations. From driving relationships between customers by creating sharing communities to creating engaging store atmospherics that make shopping a more active experience, Customer Engagement innovation takes many forms.

Themes which you may tend to see within Customer Engagement are authenticity and knowledge. Authenticity is a highly desired, but somewhat scarce, resource for any organization, and having authentic interactions with customers can be valuable to the brand and the business. Knowledge can also be a core ingredient in these interactions, as those most valuable customer engagements tend to involve the exchange of information or ideas... and don't be surprised if the organization is on the receiving end of knowledge from customers, in many cases.

From The Ten Types of Innovation:

Customer Engagement innovations are all about understanding the deep-seated aspirations of customers and users, and using those insights to develop meaningful connections between them and your company. Great Customer Engagement innovations provide broad avenues for exploration, and help people find ways to make parts of their lives more memorable, fulfilling, delightful–even magical.

Increasingly, we see these innovations taking place in the social media space, as many companies move away from “broadcast” communications toward delivering more organic, authentic, and mutual interactions. We also see companies using technology to deliver graceful simplicity in incredibly complex areas, making life easier for customers and becoming trusted partners in the process. However, as ever, technology is only a tool. Even simple gestures like elegant and intuitive packaging can extend and elevate the experience customers have with a company— long after the point of purchase.

Customer Engagement in the Sustainability Space

MIT Trash | Track

Created from a joint initiative between MIT, Waste Management, Qualcomm, Sprint, and The Architectural League NY, Trash | Track sought to understand and visualize the paths 3000 items took from Seattle to their final destinations. The results have been used in classrooms and as conversation starters on hundreds, if not thousands of sites over the years, engaging people in discussions which may have never had a topic statement or stimulus in the past. The Trash | Track project certainly delivered in that aspect.

Where the Trash | Track project may have stopped short was in understanding the paths and the implications of those travels or pushing the discussion further... in essence, taking the next step to understand what can be improved in what they call the "removal chain" and undergoing, quite literally, the accounting of those items. For example, are there closer accumulation points for e-waste than Florida? When accounting for its travels cross country, is e-cycling that item still an intelligent decision? Please watch the following 2:18 video. Note that there is no narration in the following video.

Video: Trash | Track (2:18)

[Garbage rustling]

Nobody wonders where, each day, they carry their load of refuse.

Outside the city, surely; but each year the city expands, and the street cleaners have to fall farther back.

[machines droning]

"The bulk of the outflow increases and the piles rise higher, become stratified, extend over a wider perimeter." ~ Italo Calvino, invisible cities.

[lively orchestra music begins]

Imagine we could use smart tags to follow where our garbage goes...

We could reveal the final destinations of our everyday objects and increase awareness of sustainable practices.

Trash Tag Ver 2.0

Trash tag Ver 3.0 – Qualcomm InGeo

We invited 500 people in Seattle to tag their trash and followed a total of 3000 trash objects.

The day of deployment

After 2 days

* map showing trash travelling across the united states.

After 3 days, 4 days, 5 days, 6 days, 7 days,

After a week, 2 weeks, 3 weeks, a month

After 2 months

[upbeat orchestral music continues]

Credits

[music ends]

Credit: MIT Senseable City Lab. "Trash | Track." YouTube. January 22, 2011.

Cheng Concrete Exchange

Fu-Tung Cheng has been a renowned architect in Berkeley, California for decades, and had been using concrete countertops in his designs for years. In 2004, he built on his architectural and design experiences with concrete to create Cheng Concrete in 2004, a combined training/product company for concrete countertops. In doing so, his core model was one that would serve contractors, designers, and DIY equally by making the necessary components and most importantly, knowledge, well-packaged and available to the masses.

Instead of relying on private-labeled, pallet-sized shipments of specialized concrete mix (which would have been a nightmare on multiple fronts), Cheng Concrete packages and ships only the colorants and added components necessary to add to your locally-sourced concrete. Combined with the knowledge support of others, you will have a countertop or surface which will outlive your kitchen, if not your home, but is readily recyclable locally.

Where Cheng Concrete engaged customers was not only in opening this emerging interior material to the masses of homeowners, but also in highlighting designs and how they are created, both online and in print. If you search "concrete counter" on YouTube, you have more than 43,000 results, and much of this popularity is due to Fu-Tung Cheng's engagement of homeowners more than a decade ago. Please watch the following 4:10 video.

Video: Make a Concrete Barbecue Surround with CHENG Outdoor Concrete Mix (4:10)

In this video we're going to show you how to make the silo BBQ surround. It's easy to make because you're just taking one small curved section and repeating it four times. You stack them and, voila, you have something that’s permanent and really compliments the iconic American barbecue.

Hey! I'm Eric! Welcome to the Cheng fabrication shop. Here’s what you're gonna need for the silo barbecue surround: the form; decorative aggregate; Cheng outdoor pro formula; Sakrete five thousand-plus; clean water; rubber gloves; particle mask; safety glasses.

Step 1: mix the concrete. Step 2: pour the concrete.

We have a finished silo mold here. We're ready to pour. We can't get the concrete in between the form wall and the liner. Now we got it about halfway filled up. We’re getting the air bubbles out. Now that we're close to the top we're going to rod again. We're going to let that set up for a little bit and we're going to trowel in some decorative aggregates for the finished top.

Step 3: add decorative aggregate.

It’s been 15 to 20 minutes, and we’re all ready to add some decorative aggregates into the top. Just kind of sprinkle them. You want them to fall in sort of a natural pattern, and you probably won't see them all by the time we're done with it, so we’re going to add a little bit more than you think you're gonna want to see. Then we're going to take our trowel and kind of smooth them out. Then if the concrete covers them up a little bit it’s not a not a big deal because the idea here is we're going to come back and polish this, which will expose the aggregates just under that surface.

So now we're done pouring the silo mold, we're going to actually cover this with plastic and let it sit for three days.

Step 4: De-mold the concrete.

Basically just this front board is all we need to take off. After we do that we're going to actually turn it on its side so we can take the bottom off first. And then we're going to separate the two halves. And that’s it!

I've been working around concrete for about 25 years as a professional. I’ve worked in design and I’ve worked in fabrication but I started my career as a DIYer. Since then I've had many opportunities to expand the creative potential of concrete. My new product, Chang outdoor concrete formula, does just that. This unique formula transforms ordinary concrete into high quality designer concrete. It provides color for your project. It provides crack resistance. It holds up in extreme weather. And the creative possibilities are endless. Enjoy!

Credit: Concrete Exchange. "Make a Concrete Barbecue Surround with CHENG Outdoor Concrete Mix." YouTube. March 28, 2013.

Closing Remarks

Closing Remarks axj153

But to Be Untangled in the Real World

van gogh painting of boots
Credit: Van Gogh - Ein Paar Schuhe4 by Mefusbren69 via Wikipedia Commons is public domain

"And I can't work without a model. I'm not saying that I don't flatly turn my back on reality to turn a study into a painting — by arranging the colour, by enlarging, by simplifying — but I have such a fear of separating myself from what's possible and what's right as far as form is concerned. [...] But in the meantime I'm still living off the real world. I exaggerate, I sometimes make changes to the subject, but still I don't invent the whole of the painting; on the contrary, I find it ready-made — but to be untangled — in the real world." - Vincent van Gogh to Theo van Gogh, October 5, 1888.

As we have addressed throughout our time together, some fatal flaws in innovation efforts are those which work without a "model," that is to say those efforts which are artificially synthesized as opposed to being found and untangled in the real world.

The Ten Types of Innovation is a readily accessible framework to help us better refine and hone our strategies by further forcing us to apply a strategic lens. If we think of the Cognitive Map as representing the context in which our innovation will function–'the real world model'–then the Ten Types allow us to further refine and untangle our strategy.

Through taking on and truly engaging in the process of researching, mapping, testing, and crafting our initial strategies, we may begin to 'untangle the real world.' Perhaps most importantly, we will take what is, for some, a random and sporadic process of innovation, and instead understand where we are taking risks and where we are not. This may seem like a trivial detail, but it allows us a far more detailed and strategic view of our landscape.

For example, we may elect to choose what is a relatively gray space, and what is already a well-established path on the Map, and approach the initiative using a completely unique set of innovation types (e.g., Amazon's early days as an online bookstore). We may choose to take on what is a white space, build a substantially new path on the Map, and apply more time-tested and proven innovations (e.g., selling and marketing a product innovation through an existing model).

In each case, because we are able to layer the models, we know where we are being aggressive and taking risks, and where we are being a bit more conservative. Knowing that our innovation will likely go through rounds of refinement in the market, knowing how we can "twist the dials," so to speak, allows us paths for intelligent refinement.

Creating Meaning in the Real World, From the Real World

To refresh ourselves, our goals for this week's Lesson are to:

  • discern the ten types of innovation and how they may be blended;
  • assess how the ten types of innovation may be paired with white-gray-black space thinking to unearth potential innovation platforms;
  • integrate the ten types of innovation onto Cognitive Maps to provide additional strategic opportunities.

To these ends, this week's assignment will build on our last two weeks' efforts to create another view by which we may 'untangle the real world.'