Aerospace in Minnesota - Minnesota Precision Manufacturing ...

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THE FUNDAMENTALSMarket-driven technology innovations can be big orsmall, twig waving or earth shaking. And all innovations canbe viewed as either evolutionary or disruptive. Of course,evolutionary technology innovations are far more common.Extending product lines, honing manufacturing processes andmaking marginal improvements in current products are theinnovation analogies to playing a “small ball” style of baseball.It’s an innovation strategy that focuses on teamwork and goodexecution: Keep the ball in the infield, and win with walks,base hits, bunts and stolen bases.“Baseball is 90 percentmental – the other halfis physical.”– Yogi BerraDisruptive technologies, to continue with the baseballmetaphor, are home runs: fast-acting, game-changing reversals.Truly disruptive technologies are rare, but when they do arise,they are far reaching with enormous implications for technologycompanies. 1Clayten Christensen, a professor of business administrationat the Harvard Business School, first discusses the principlesof disruptive technology in his book, The Innovator’s Dilemma:When New Technologies Cause Great Firms to Fail (1997).Christensen proposes two categories of disruptive technologies:new-market-creating technologies, which compete againstnon-consumption (PC, Internet, iTunes, multi-touch interfacetechnology) and low-end-disruptions, which are of lower quality,perhaps, but compete because they have other more relevantqualities such as convenience or lower cost (MS SQL versusOracle’s Database, MP3s versus CDs, phone cameras versusdigital cameras). 2STEALING HOMEDisruptive technologies are a steal home when the pitcheris concentrating on second. They interrupt, they blindsidecompanies that do not recognize them for what they are,and they create growth in the industries they penetrate,and sometimes create entirely new industries through theintroduction of products and services that can be dramaticallycheaper, better and more convenient – or not.“I never blame myself whenI’m not hitting. I just blame thebat, and if it keeps up,I change bats. After all, ifI know it isn’t my faultthat I’m not hitting, howcan I get mad at myself?”– Yogi BerraThey certainly are not necessarily cheaper (such as theautomobile or digital photography); not always “better”(MP3s have replaced CDs in popularity because of theirconvenience, not their superior quality), and not immediatelyconvenient (wireless and Linux, among other technologies,depend on other compatible products, platforms and access toexpand their reach).Examples abound of technologies that, while cool, often aremore expensive or otherwise have some important “negative”factor that allows the producers of the standard technology toignore the upstart until it is too late. The disruptive technologyis not necessarily lower performance, either. It is just that,taken in total, the negatives are significant enough to allow thetechnology to be ignored at first. Can you say mobile phones?iPod?SWING FOR THE FENCE –AND KEEP YOUR EYE ON THE BALLDisruptive technologies seem intuitive – after the fact.However, they are disruptive only to the competing firms,that for reasons of their own, fail to compete for the new nichemarket that the “disruptive technology” is attempting to fill.How do we keep our eye on the ball?“The other teams couldmake trouble for us ifthey win.”– Yogi BerraHere’s a challenging question: why do some companies refuseto swing the bat – take a chance? The trouble could be corporateculture. A company sees change coming but cannot figure outwhat they will do with it – what they will sell. They are afraid.Often there are more people within a company trying to makeinnovation fail – because they are afraid of what it might mean.Doug Olson, general manager of Microsoft’s ExpressionProducts Division, says, “Companies need to get out of thetraditional ‘incremental growth’ paradigm wherever possible.Instead of being afraid of change, managers should realize thatnew ideas can be revolutionary. Companies like Apple, Google,and Microsoft all are about hiring creative people and ‘lettingthem loose.’ Management always, always needs to be willing tolisten to people who have crazy ideas.”“If it’s a great idea, run with it as if it were your own,” saysOlson.“If you come to a fork inthe road, take it.”– Yogi Berra
EXPANSION TEAMS -These five new emerging technologies that specificallyimpact the manufacturing industry promise to fundamentallychange the way you do business. Are you ready to innovate?(Excerpts reprinted with permission from MinnesotaTechnology, Inc.)The National Council for Advanced ManufacturingTechnologies is a Washington, D.C.-based policy and researchorganization whose mission is to improve the competitiveposture of U.S.-based manufacturing. The organizationcompiled a list of several emerging technologies believed tohave the potential to be disruptively innovative within fiveto 10 years. Which of these ultimately will result in cheaper,faster and better products for Minnesota’s manufacturers?DISRUPTIVE TECHNOLOGY #1:Embedded SensorsSensors have been around since Galileo invented thethermometer in 1593. But early in the 21st century, manytechnology experts predict that advances in sensor technologywill significantly extend the capabilities and utility of anextremely wide range of manufactured products. Why? Largelybecause sensor technology is changing rapidly from externallyapplied sensors, such as immersion thermometers and surfacemountedstrain gauges, to embedded sensors. In other words,they are becoming installed devices built permanently intothe frameworks or internal structures of products. Embeddedsensors encompass a wide range of capabilities, ranging fromelaborate process-control monitoring to simple electronic popupalerts that would go the traditional turkey timer one better.Will embedded sensors become a disruptive technology, onethat moves past mere invention to moneymaking innovation?Many feel the potential is there. Applications for embeddedsensors range from control of large, hydraulically poweredmachinery to tiny, cutting edge micromachines made frommaterials such as carbon nanotube-reinforced composites.Research on sensor networks is under way as well. For example,embedded sensor matrices could be placed under highways,opening a world in which cars drive themselves.DISRUPTIVE TECHNOLOGY #2:Micro- and Nano-ManufacturingDale Wahlstrom, CEO of BioBusiness Alliance ofMinnesota, recently had this to say about nanotechnology:“The whole issue around nanotechnology, the science andmanufacturing of materials a billionth of a meter in size, is howyou deal with dimensions that are so infinitesimal. Everything isdone microscopically with unique handling systems.”Research continues to develop manufacturing processesso small that they operate on the level of molecules. Althoughdevelopment of micro- and nano-manufacturing remains inits infancy, the expectations for it are high. Concepts suchas micromachine design, nanomodeling and molecule-levelmanufacturing represent a promising future approach toturning raw materials into precision finished products.Micro- and nano-technologies have the potential todramatically disrupt entire industries and make enterprisesfar more agile across every industrial sector.WHAT YOU SHOULD KNOW ABOUTDisruptive TechnologiesTechnology just keeps getting better. In every market,technology advances and improves—driven by a setof behavioral, economic, regulatory and institutionalfactors. Companies take advantage of this by offeringbetter products at higher prices, and by listening to andtargeting mainstream and high-end users.Customers will use a technology, up to a point.Technological progress inevitably reaches a point whereit is far above what customers actually need and use.For example, Microsoft’s Excel is a very useful pieceof software, but how many of us use all of the bellsand whistles that are packaged in it today? Many of usprobably only need the basic functionality that enablesus to create simple spreadsheets and perform noncomplexcalculations.Overshooting customer needs enables disruption.When the level of technological progress is far abovewhat customers actually need and can use, thephenomena of overshooting creates the opportunity foran upstart to come in with something that’s cheaper,simpler and good enough for a set of customers whodon’t need the advanced technology. Once the entrantcarves out a piece of the market on the low end, theyimprove the “good enough” product, march upstreamand can take a signifi cant piece of market share awayfrom incumbents.But it’s not really about the technology. It’s about thebusiness model. Small, nimble, disruptive fi rms cansucceed with business models that are unattractiveto incumbents. If an incumbent requires a 40 percentmargin on a product in order to support its operationsand remain profi table, would they really encouragea product that might only have a 20 percent return?Whereas, for an upstart, that 20 percent might makethem extremely profi table. But incumbents, don’t giveup! If you organize your operation properly, disruptionactually will lead you to tremendous growth. 3
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