Motivations (Sources) of Innovation
with The Discipline of Innovation by Peter F. Drucker
Rev: Sep, 2012
Euiho (David) Suh, Ph.D.
POSTECH Strategic Management of Information and Technology Laboratory
(POSMIT: http://posmit.postech.ac.kr)
Dept. of Industrial & Management Engineering
POSTECH
Contents
1.
Unexpected occurrence
2.
Incongruities
Within a company/industry
3.
Process Needs
4.
Industry & Market Change
5.
Demographic Changes
6.
Changes in Perception
7.
New Knowledge
Social and Intellectual Environment
Motivation Of Innovation - Unexpected occurrence (1/3)
■ IBM
– In the early 1930s, IBM developed the first modern accounting machine,
which was designed for banks
• But banks in 1933 did not buy new equipment
– Unexpected success !
• The New York Public Library wanted to buy a machine
• Business unexpectedly showed an interest in a machine that could do payroll
 IBM redesigned what was basically Univac’s machine for such mundane applications as payroll,
and within 5 years became a leader in the computer industry
3
Motivation Of Innovation - Unexpected occurrence (2/3)
■ Influenza A(H1N1)
– Occurred unexpectedly & diffused rapidly.
– Demand of hand sanitizer, which help preventing Influenza A, increased extremely
Unexpected Occurred !
Influenza A
Sales of Hand sanitizer
4
Motivation Of Innovation - Unexpected occurrence (3/3)
■ Ford Edsel (unexpected failure)
– The biggest new-car failure in automotive history
– The most carefully designed car to that point in American automobile market
• all the planning, market research, and design had gone into it
 Unexpected failure!
• Something happened in the automobile market that ran counter to the basic assumptions on which GM
and everyone else had been designing and marketing cars
– Market was segmented primarily by income groups, with a new principle “lifestyle”
 Introduced Mustang afterwards
5
Motivation Of Innovation – Incongruities (1/4)
■ The cataract operation (Incongruity in the logic of a process)
– During the past 300 years, doctors systematized it to the point that only step left was the
cutting of a ligament. But it was so different a procedure from the rest of the operation, they
often dreaded it
– An enzyme could dissolve the ligament without cutting
 Just by adding a preservative to this enzyme that gave it a few months’ shelf life
 Alcon found itself with a worldwide monopoly
6
Motivation Of Innovation – Incongruities (2/4)
■ Mini mills (Incongruity between economic realities)
– 1950 – 1970, in steel industries of developed countries
– Whenever an industry has a steadily growing market
but falling profit margins !
 The innovative response: mini mills
7
Motivation Of Innovation – Incongruities (3/4)
■ Ocean shipping (Incongruity between industry’s assumptions and its realities)
– For 50 years after the turn of the century, shipbuilders and shipping companies worked hard
both to make ships faster and to lower their fuel consumption
– The real cost did not come from being in the sea but from not sitting idle in port
 The innovation: the roll-on and roll-off ship and the container ship
 Ocean shipping turned to be one of the major growth industries of the last 20 to 30 years
8
Motivation Of Innovation – Incongruities (4/4)
■ Matchmaker
– In past, there were many matchmakers offline
• Not enough information or options to meet right people
– Online matchmaker company
• Connect many couple with optimized data from large information pool
• Fast! Optimized! More Chance!!
Matchmaker offline
Matchmaker online
9
Motivation Of Innovation - Process Needs (1/3)
■ Reflectors on highway
– Japan had no modern highway system, its roads still follow the paths laid down for-or byoxcarts in the tenth century
 Adaptation of the reflector used on American highways since the early 1930s
• The reflector lets each car see which other cars are approaching from any one of a half-dozen directions
 Enabled traffic to move smoothly and with a minimum of accidents, exploited a process need
10
Motivation Of Innovation - Process Needs (2/3)
■ Highway
– Inter change in highways
• There were many traffic problems because we should pay money just one by one
– By using high pass technology
• We do not have to stay in front of interchange to paying money
High pass technology
Inter change in highways
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Motivation Of Innovation - Process Needs (3/3)
■ The media
– Had its origin in two innovations developed around 1890 in response to process needs
– Ottmar Mergenthaler’s Linotype
• Made it possible to produce newspapers quickly and in large volume
– Modern advertising
• Made it possible for them to distribute news practically free of charge, with the profit coming from
marketing
“When it rains it pours”; Morton Salt, 1912
12
Motivation Of Innovation - Industry & Market Change (1/2)
■ Brokerage firm of DL&J in 1960
– they realized that the structure of the financial industry was changing as institutional investors
become dominant
 lead the move to negotiated commissions and one of Wall Street’s stellar performers
13
Motivation Of Innovation - Industry & Market Change (2/2)
■ Floppy Disk vs. CDs
– The Floppy Disk was popular portable storage hardware
• CDs can contain much more data compare to Floppy Disks with better durability
– Demand for Floppy Disks
• Decreased Rapidly
Floppy Disk
CDs
14
Motivation Of Innovation - Demographic Changes (1/2)
■ Robotics in Japan
– 1970, a ‘baby bust’ and ‘education explosion’, young people were staying in school beyond
high school
 The number of people available for traditional blue-collar work in manufacturing
was bound to decrease and become inadequate by 1990
 Japan pay attention to demographics and now have a ten-year lead in robotics
15
Motivation Of Innovation - Demographic Changes (2/2)
■ Mobile game
– The size of mobile phone market
• Increased rapidly since the demographic size of mobile phone user enlarged
– Demand for Mobile game
• Increase as the population using mobile phone increase
• People can enjoy mobile game wherever and whenever they want to
Mobile game
The Global Mobile Game Market Size
16
Motivation Of Innovation - Changes in Perception (1/3)
■ Cosmetic surgery
– People felt ashamed having cosmetic surgery
– The perception has been changed
 People are rather confident with cosmetic surgery nowadays
 The market of the surgery enlarged!
The
market of the
surgery enlarged!
People felt ashamed having cosmetic surgery
More confident with cosmetic surgery
17
Motivation Of Innovation - Changes in Perception (2/3)
■ Food
– Fast food, junk food
• Overweighting
– Green food
• Vegetables, fruits
• Fast
Fast food
Green food
18
Motivation Of Innovation - Changes in Perception (3/3)
■ Health care
– In the last 20 years, collective hypochondria grips the USA, everything seems to cause cancer
or degenerative heart disease of premature loss of memory
 Rather than rejoicing in great improvement in health, Americans seem to be emphasizing how
far away they still are from immortality
 Health care magazines, exercise classes, jogging equipment, and all kind of health food
19
Motivation Of Innovation - New Knowledge
■ J. P. Morgan & Company in New York
– J. P. Morgan, put together the French theory of entrepreneurial banking and the English theory
of commercial banking to create one of the first successful modern banks
20