Topic: Reinventing an Older Product Segment by Implementing State-of-the-Art Technologies

Speaker: Carsten Dickmann, Head of Marketing and Product Management, POWER WIND

Carsten addressed the question, “What is the difference of development between a product and a service?” The answer is there is no difference because both bring solutions to clients to enable them to solve their problems. It is not enough to develop innovation; you need both hardware and software.

Consider this product segment that has been reinvented. This is the agenda.

1. Wind energy market’s development
2. PowerWind56: reinvention of the sub-MW Segment
3. Comparable approaches; food for thought
4. PowerWind56’s Market success

Wind Energy has had an impressive development into a global business. There has been commercial use of wind turbines for 20 years. There is a continuous race for more power output and yield. On the political landscape there is increasing support for wind energy due to climate change, energy independence, and the satisfaction of growing energy needs.

There are emerging new markets worldwide beyond traditional wind energy countries. There are exceptional growth rates and development is expected to continue. The installed capacity of wind energy is greater than nuclear power plants in Germany.

Over the years wind turbines have evolved from the experimental stage to having power plant characteristics. Systems today differ significantly from earlier concepts. To fulfill all of today’s requirements, turbines have to keep up with technical developments. One key factor is grid integration.

Usually, technological progress is implemented in the next bigger generation. Thus, main development direction has been toward bigger, higher, and more rated output. Within 20 years the wind turbines’ yield was increased by a factor of 100. 5 MW turbines will increase yields by another factor of 5.

Here are some comparable approaches.

Option 1: Make it bigger and create differentiation by being the first player beyond the existing power range. The plus side of this approach is clear; you are easily distinguished as a pioneer. The minus side means you are facing lots of challenges and an unknown terrain. There are high tech risks with high loads and weights. There is a need for parallel R&D with suppliers and for new components. Missing is the supporting infrastructure with logistics and cranes. There is an unclear situation regarding site permissions involving a complex certification process. The technology clearly is not proven. Project financing is complicated.

Option 2: Make it smaller by reinventing an older product segment by implanting state-of-the-art technologies. The minus side includes facing existing competitors and products. On the other hand the plus side is the transfer of known and proven technologies into an unattended segment. Risk is reduced with lower loads and weights. The supply chain is secure. There is less development time and associated costs. You can leverage the implicit benefits such as easy logistics. This is a situation where they are facing obsolete competitive products with the competitor‘s R&D focused on the race for size.

Power Wind selected Option 2 and did a reinvention. They transferred state-of-the-art technologies from the latest multi-MW turbines back to the older sub-MW segment: the PowerWind 56 approach. Benefits included: higher yields, increased component and machine lifetime, lower Q&M costs, high reliability due to the combination of technically proven components, compatibility with a majority of the grid requirements enabling additional grid services beyond a simple energy supply. PowerWind 56 expands the application range by enabling access to emerging wind markets. Their most important market is Italy.

These comparable approaches are food for thought. Consider the car market where the technological trend is for bigger, faster, and for better energy efficiency. It is a race for size with new technologies applied in the next bigger class.

Now contrast this to mobile phones where the technological trend is for smaller, more functions, better network integration, and longer standby-time.

Features do pay off.

Topic:
Service Innovation and New Markets …Key Elements of Time: Matters’ Growth Strategy
Speaker: Franz-Joseph Miller: CEO TIME-MATTERS-A LUFTHANSA SUBSIDIARY

You will get innovation from the view of a mid-size company. They provide special speed solutions for the “planned emergency.”

He then gave several examples where speed of delivery is essential. This includes a Formula 1 race, where there was an engine failure but the needed spare parts were stored in Cologne. There are only 36 hours until the race begins.

Another example is when a bone marrow transplant is in Jacksonville, the donor is in Cologne and there are only a few hours to change and or save lives.

Building trust is the key. He hires “freaks” who can figure out the logistics to transport emergency parts for nuclear power plants while minimizing the risk, yet keeping cool while managing the logistical complexity. They have a solution focus and take on the responsibility to deliver when time matters. The company culture encourages and supports them to be fast, flexible, excellent, obsessed, fearless, unconventional, extreme, rule breakers, passionate, and unique.

They serve a market for “When tomorrow is too late …” or standard not enough! They are asset free. They can deliver in hours worldwide. The business is rather complex and the industry is fragmented, especially on an international scope.

Standard delivery is based on price. Special speed solutions are based on value and trust. There are many competitors in the local market but there are few competitors internationally. The projections for special speed solutions are between 10-20%.

Growth is driven by global trends. The key industries are: automotive, aviation and aerospace, machines and tools, oil and gas, life sciences, and medical.
Time:Matters works by coordinating the market, customer, operations, customer service, as well as the processes and or networks.

In 2005 they embarked on a growth strategy focusing on service expansion and internationalization through buy and build. Strategic targets included: internationalization, target market expansion, network and service expansion.

Their strategy was matched to the market trends. Drivers of growth included these factors: global, reduce complexity, risk management/contingency, outsourcing, standardization, warehouse centralization, cost/service pressure, niche markets, emerging markets, lean production, JIT, and after sales service.

Every solution can be a service expansion. Their challenge is to transform ad hoc solutions created under high pressure into a standard. They turn tailor made solutions into a modular product tool-box. They develop a collaborative and learning organization with long term planning and a daily exchange. There is regional flexibility with central steering.

With service and network expansion and internationalization Time:Matters has realized a greater than 140% growth since 2005.

Key learning’s:
1. Innovation process = project management
2. Expectation management…upfront target and results planning, clear and reasonable milestone and timelines
3. Quick results …feasibility test and motivation booster
4. One leader..clear responsibility for results with one person
5. Ensure support…engagement of all teams (include Young potentials).
6. Incentives…new services development results as part of corporate target setting.
7. Learn and adapt…team member’s work on innovation parallel to a minimum of tasks.
8. Prototype before launching.. pilot phases with real customers
9. Discipline! realize when it’s time to pull the trigger …and pull it
10. And avoid consultants…why would they be better than your own people?

Topic: Corporate Leadership Forum on Innovation Strategy – A Two Part Presentation

Speakers: Krijn Rietveld, Senior Vice President of the Nutrition Innovation Group, Royal DSM N.V. & Patrick O’Riordan: Global Director, Insights & Innovation, Anheuser-Busch InBev

DSM has existed over 100 years. It began as a coal mining company and is now in fertilizers, petrochemicals, performance materials, etc. Global trends drive DSM’s innovation strategy. These include climate and energy, health and wellness, functionality and performance, and emerging economies.

DSM has a strategic commitment to (open) innovation and they have a top 50 project list. Their innovation scope includes fitness, wellness, obesity, diabetes, novel pharma process, eco-friendly materials, safety and protection, next generation plastics, biomedical materials, specialty packaging, etc.

Their new business development includes: biomedical, incubators, personalized nutrition, sports, specialty packaging, venturing, white biotechnology, and licensing.

They have an incubator for radical innovation to focus on new business models, etc. They are steering the innovation pipeline and have open innovation throughout the pipeline. Acquisitions boost innovation speed. They exit businesses which do not fit their strategy.

They are advocates of “proudly found elsewhere” strategy and have a regular sanity check of innovation projects.

Their key focus areas include:

1.) Boost commercialization and launch skills with a dedicated product launch support team.
2.) They have a toolkit for commercialization.
3.) They identify and spread best practices.
4.) They recruit and hire individuals from other industries to speed up commercialization.
5.) They stimulate employees to innovate by providing high level jobs and career paths in innovation. They train people and virtual teams around innovation at multiple levels and functions. This includes a business plan competition for top potentials. The teams are cross discipline, cross business entities, as well as cross countries.

Their focus is on opportunities at the intersection of life sciences and materials sciences. They are the winner of 2009 OCI Award and have had continued innovation growth despite the recession.

Core elements include: a strong strategic commitment, a tailored organizational structure, a focus on building relationships with external partners, a continuous drive to improve from good to great and creating sustainable growth for all stakeholders.

Part Two:
Speaker: Patrick O-Riordan, Global Director, Insights & Innovation, Anheuser-Busch InBev

Anheuser-Busch InBev is the leading global brewer with a ranking of the #1 or #2 positions in over 20 markets. They are a consumer-centric, sales-driven organization with 320 brands.

Every second 16’912 glasses of beer are drunk; this is 169 times the volume of the Empire State building. However the industry and world is changing. Before the majority of their consumers were in the westernized market. In the next 5-10 years there will be a consumption shift to developing nations such as Brazil, India, and China.

The most difficult and important part is to understand the consumer. They connect the brand experience in a meaningful way, while providing a balance of heritage and innovation. This is done in a responsible way.

This leads to the concepts of Renovation and Innovation. This is a modernization of a product or tactical launch of short lived products to defend share. The innovation, package can include a significant modification of the liquid delivery or the container. It could be the creation of a new liquid within the beer segment and or across categories.

The philosophy is that for brands to have maximum effect they need renovate and innovate to fulfill their promise. For R&I to have maximum effect, it needs the brand to consider provision, focus and direction.

Key learning’s are:

1.) To build the story of the brand
2.) Pathways of timed introductions
3.) Connected pipeline – collective potential of initiatives
4.) Complementary short-, mid- & long-term focus
5.) Have a framework for innovation; they have done most of their work at the front end of innovation.
6.) R&I process (WCCP). This is the where, what, and how.

Their common strategy and process is:
1.) Secure and protect the core.
2.) Drive share & volume.
3.) Expand category share at expense of SOT. They are now in ten global markets.

LIVE Front End of Innovation Europe 2010

Speaker: Scott Anthony: Author, The Silver Lining An Innovation Playbook for Uncertain Times
Topic: Seizing the Silver Lining

In telecommunications it is about that last mile for success. The same is true for innovation in looking at that first mile.

Here are ten reasons that will get you fired.

1.) When the discount rate turns to infinity. Innovation needs some short term returns.
2.) When you have the thousand monkey problem. If you give them all typewriters will you get War and Peace or defecation and broken keys?
3.) You must recognize, that if this is new to me but known to world then you must tap into that knowledge. Do not do strategy and then allocate resources. If you look at slack then you can tell a company’s strategy. The best innovation teams are small and focused.
4.) You get swarmed by zombie projects. You wish could innovate more but you do not have the money or the bodies. People are working on the wrong things. Your company is fractionalized and working on dead projects. Your capacity gets strained.
5.) You engage in the Raider’s of the Lost Ark problem. Inside a lot of companies, if a project fails, it is put in box or closet and never spoken of again. It may fail through no fault of our own. It requires deep cultural change to learn from failure.
6.) You have the curse of abundance. During the early stage of an idea, the questions begin about competitors, market demand, etc. This results in gathering more data, doing more analysis, and more tests, before the project goes forward. Abundance is an inhibitor of innovation.
7.) You are in the Land of Misfit Toys. You empower a leader to go build new teams. They need people and get the people who are not busy and whom no one else wants. Think carefully about the team you assemble.
8.) You get hung upon Fitzgerald failures. Senior leaders must think about operational excellence. Leaders must hold opposed ideas in their mind at the same time. Senior leaders use their old mind set and do not make good decisions.
9.) Educate leaders to ask right questions and borrow selectively from the core business. He gave the example of Microsoft, which had the ability to do Google type service, but was concerned about product cannibalism.
10.) Be careful of the wolf in sheep’s clothing — friends can be your enemies.

Scott Anthony summarized with these recommendations:

1. Be relentless in looking outside where you will find new ideas and capabilities. Collaborate and involve people from outside your market.
2. Allow for an innovation minor league. Draft young people and immediately bring them in to the big leagues. Use them to test ideas.
3. Constrain like crazy.
4. Work on the collective innovation muscles. Read HBR The Innovative DNA.

Topic: The Trend Radar – Managing Trends and Innovations Through Corporate Foresight

Speaker: Dominik Tappert: Head of Innovations, Kaefer Aerospace

Dominik Tappert began by posing this question, “Why do we need innovation and early trend detection?” The answer is to be prepared for that special moment.

Kaefer Aerospace is a worldwide leading integrator of insulation and interior solutions within the aerospace business. Our mission is to support our customer’s success by supplying comprehensive and innovation insulation systems and interior solutions. They are active in 3 countries and 7 locations.

One of the most significant trends in business is digitalization. The Internet totally changed the terms in different industries. You must recognize that the cost structure, the value chain and the hierarchy within those industries are now drastically changed.

The big traditional players did not anticipate these trends. Consequently companies outside the industry used their opportunities successfully.

Kaefer Aerospace does trend analysis and then turns these trends into business. A net of sensors build up the radar team which includes background, employee, radar-team, radar-head, and GEC.

Trend radar in the company leads to the innovation development process. This includes: exploration, project proposal, project execution, and result/know-how transfer. This is the process of creation. Then an innovation assessment is done with these categories: nominate, select, quality, research, and analyze.

In the next stage we look at these factors: trend proposal, trend candidate, trend draft, trend, and focus trend. The radar screen is systematic. It is divided into several sectors in terms of relevancy for our customers in terms of percentage.

Sector 1 (1-3 years) established trend
Sector 2 mid-term trend (1-3 years)
Sector 3 long term trends (greater than 3 years)

This is influencing the company by using radar methodology. We identify drivers, topics and trends evaluated, if our own platform supports collaboration, review of trends quarterly, and then make recommendations to the executive board for further decisions.

Kaefer Aerospace uses communication fact sheets with various descriptions of trends. This is given to different groups and departments. This dialog inspires development of the overall service offering and leads to concrete projects

For advancement in internationalization, the process is that each subsidiary in each country is appointed for the radar team. They utilize this methodology for the review of published trends for the identification of new trends. Small radars are arising which will result in a total radar.

For advancement with peer-review, the process is to warrant an independent estimation of trends. Internal experts estimate the relevance and degree of maturity of the trends. This results in an integrated second opinion. Then on the basis of collective discussions, the trend will be approved or rejected. Peer-Review is an instrument, and no longer the focus.

If you have questions, Dominik Tappert said that you are welcome to contact him.

Topic: The Trend Radar – Managing Trends and Innovations Through Corporate Foresight

Speaker: Dominik Tappert: Head of Innovations, Kaefer Aerospace

Dominik Tappert began by posing this question, “Why do we need innovation and early trend detection?” The answer is to be prepared for that special moment.

Kaefer Aerospace is a worldwide leading integrator of insulation and interior solutions within the aerospace business. Our mission is to support our customer’s success by supplying comprehensive and innovation insulation systems and interior solutions. They are active in 3 countries and 7 locations.

One of the most significant trends in business is digitalization. The Internet totally changed the terms in different industries. You must recognize that the cost structure, the value chain and the hierarchy within those industries are now drastically changed.

The big traditional players did not anticipate these trends. Consequently companies outside the industry used their opportunities successfully.

Kaefer Aerospace does trend analysis and then turns these trends into business. A net of sensors build up the radar team which includes background, employee, radar-team, radar-head, and GEC.

Trend radar in the company leads to the innovation development process. This includes: exploration, project proposal, project execution, and result/know-how transfer. This is the process of creation. Then an innovation assessment is done with these categories: nominate, select, quality, research, and analyze.

In the next stage we look at these factors: trend proposal, trend candidate, trend draft, trend, and focus trend. The radar screen is systematic. It is divided into several sectors in terms of relevancy for our customers in terms of percentage.

Sector 1 (1-3 years) established trend
Sector 2 mid-term trend (1-3 years)
Sector 3 long term trends (greater than 3 years)

This is influencing the company by using radar methodology. We identify drivers, topics and trends evaluated, if our own platform supports collaboration, review of trends quarterly, and then make recommendations to the executive board for further decisions.

Kaefer Aerospace uses communication fact sheets with various descriptions of trends. This is given to different groups and departments. This dialog inspires development of the overall service offering and leads to concrete projects

For advancement in internationalization, the process is that each subsidiary in each country is appointed for the radar team. They utilize this methodology for the review of published trends for the identification of new trends. Small radars are arising which will result in a total radar.

For advancement with peer-review, the process is to warrant an independent estimation of trends. Internal experts estimate the relevance and degree of maturity of the trends. This results in an integrated second opinion. Then on the basis of collective discussions, the trend will be approved or rejected. Peer-Review is an instrument, and no longer the focus.

If you have questions, Dominik Tappert said that you are welcome to contact him.

Topic: Engaging with the Future Differently

Speaker: Josephine Green: Senior Director Trends and Strategy, Philips Design

Josephine Green worked at Philips for 15 years and looked at the future by studying people, cultures and society. She asks us to consider a change from technology as a driver to technology as an enabler. What if innovation is a circular process instead of a linear model?

The 21st century will be about social innovation. In the 20th century the economy was based upon mass markets, economies of scale, and mass products to drive growth. It was a techno-market era with a top down command and control structure–a pyramid.

People are now enabled by technology to be creators of their own lives and designers of our own lifestyle. The World Wide Web allows people to move from back end to front end of innovation. It is not about consuming anything. It is about living side by side. It is all about customized personalization in an eco system.

The techno-market era is about people, technology, and the environment. We are a transition group and we are moving to a socio-ecological era. We are going from a model of a pyramid to a pancake (circular). At the bottom of the pyramid are women and children. Men are at the top.

The pancake model is quantum soup. Many walk to the center. It is not based on mass anything, it is based upon customized, personalized, context aware solutions. It does not have lines of command and control. The pancake model has systems thinking, it is connected.

We must embrace new stories with new metrics to measure the new economics that goes beyond growth. One idea is ISEW instead of GDP.

GDP) Gross Domestic Product versus (ISEW) Index of Social and economic welfare.
1. New production and consumption, beyond big.
2. New lifestyles, beyond materialism.
3. Move away from concepts of ownership to sharing.
4. New social industries, driven by social need, beyond product.

20th century, has the pyramid model with centralizing innovation, market innovation, R&D and technology, consumer needs/insights, and experts/professionals.

21st Century, will go towards a pancake model with social and sustainable innovation, people, communities/systems, stakeholder needs/insights, partners and value networks.

Josephine Green recommends these websites:
www.socialinnovation.org

http://Urbanecomap.org

http://www.Patientopinion.org.uk/

www.Kiva.org/

New skills and competencies are needed. We will need to develop the non rational skills such as intuition, sensing, and feelings. We will need to work across disciplines and across functions. We must re-think our organizations and culture.

In the Pyramid World the skills required include: management: planning, budgeting, measuring, evaluation, organizing, structuring, and controlling. In the Pancake World the skills required include: innovation, questioning, challenging, dreaming, imagining, experimenting, learning and enterprising. We must reinvent language.

In the pancake world we are distributing complexity which enables people to think and act with agility in the moment, to create, and to innovate. We need transitional leadership with courage to do the following:

1.) Embrace that the future is social
2.) Maximize innovation and mission
3.) Create the space for longer term investment and returns
4.) Decentralize the organization
5.) Let go

Women and generation Y are already in the pancake world. Distributing complexity means distributing power and this leads to a greater democratizing of the future.

Featured Keynote:
LIVE! An Exclusive Preview of BMW’s New Concept Car
The Future Sustainability and the Joy of Mobility

Speaker: Adrian van Hookydonk: Director Design, BMW Group

The joy of mobility is deeply ingrained in us. Imagine a dog with his nose in the wind, he enjoys the speed. Kids begin on tricycles. Even Einstein enjoyed speed on a bicycle. People give a personal spin to mobility.

We see extreme sports with motorcycle racing. Automobile racing is not just about moving but it is also about going fast. Speed allows us to experience different things and experience different people. This is the joy of mobility.

BMW is heavily driven by engineering and technology. We watched the movie that is the “Manifesto” for BMW. The message is about shaping the future, with an emphasis on the importance of how you make people feel. Joy is core brand value. The key reason for purchase is emotional.

We dream of blue sky, empty landscape, and a great view. There is a contrast to the reality of crowded highways and grey skies.

What can designers do? This requires a change, not a change back. We will not forget the joy of movement. The profession of car design is a form of art. Beauty and sensuality is associated with our profession as well as sex appeal or timelessness.

They begin with sketches, and then they bring the lines onto a technical drawing. They can shape every millimeter of the vehicle. Now they are trying to create this in 3D by digitizing data. This process takes one year then they select the shape and it takes another two years for the prototype.

Design is the promise. They do not like to do retro design. They want modern designs that take the brand into the future. The car is designed to explain itself with the technology it carries. Weight and aerodynamics will be the key in the future because this extends the driving range. Sustainability is kept in mind with the materials selected.

The differentiating factor will be design. They came up with shapes to signify that the future has come. We can make the change so attractive people cannot resist and will connect to mobility.

He leaves us with this quote: “The most thrilling periods in design history are the ones of the greatest change, when designers interpret shifts in science, technology, behavior and politics for the rest of us.”
The New York Times by Alice Rawsthorn

Speaker: Roberto Payer: General Manager, HILTON AMSTERDAM

Topic:
Interactive Collaborative Design Workshop: Destination Innovation.
How the Hilton Amsterdam Reinvented Itself

Roberto began with the photo of a gorgeous peacock. He tells us a peacock cannot fly. This is something many people do not know or notice. There is a currently a new socio-economic landscape with 18 different cultures in the country.

Technology cannot do everything. There is the power of the human touch. We now have tribes with followers. How do you provide value when your hotel is losing $3 million per year? What do we need to change? Is it the organization or is it money? Perhaps we need to determine what turns people on?

The Hilton Hotel was built in 1958. It was the first public/private partnership in 1960’s. People come to see philosophy, architecture, green, and water. Structures are changing and there was a need to change the structure.

Emotions both for and against can kill your ideas. This is mindset. He needed the freedom to be “what I want to be.” This is a soft business, and we have to change every nine months. He said that society is very fragmented and they have to be quick to receive their return on investment.

Some of the unique ideas that Roberto Payer brought to the Hilton Amsterdam included bringing in boats when Amsterdam had none. The goal was to be the best downtown. He created green spaces with open windows even when he had no budget. He created an Italian restaurant, called Roberto’s. It was the only Italian restaurant in 1992, again with no budget. The ROI on the restaurant is 15%.

To attract people, they created the Marina, Hilton Yacht Club. Since John Lennon and Yoko Ono had stayed at the Hilton Amsterdam, they made this suite into the most spoken about suite in the world.

Roberto is heavily involved in political and community groups. He also serves as advisor to two schools. In 1993 they did a special dinner especially designed for 1,000 children where children served as the waiters. This is a business hotel but it also has a family orientation. They have also done a children’s Christmas hotel. He got the idea from a trip to Martha’s Vineyard where this was done for the elderly.

Another idea is to connect the hotel through partnerships with museums. He created the Van Gogh room. They had an opening with the Queen in attendance and invited 400 decision makers.

An upcoming project involves the Modern Art Museum. There are 14 million Hilton Honors members. When someone Googles the Modern Art Museum, he wants the Hilton Amsterdam to be the sole partner.

He leaves us with these tips for success:
1.) Look around.
2.) Develop partnerships with other people.
3.) Look for uniqueness that cannot be copied.

Speaker: Bas Roelofs: Former Director of Marketing & (New Business) Development BERG TOYS and Director of RCT

Topic: What a Designer Can Bring a Child & What a Child Can Bring a Designer

Bas Roelofs has several observations about the toy market. Children are neglected in the toy industry. There is a new regional initiative, by entrepreneurs for entrepreneurs to increase innovation power and competitive advantage.

Berg Toys was founded over 50 years ago, and the company began in an old farmhouse. The 2004 market demand was flattening due to saturation. His challenge was to transform the company from a technically oriented to a market oriented viewpoint. He needed to change the corporate culture which had a slogan, “Act normal, you are being sufficiently silly.”

This kills creativity. By 2008 the company had been transformed. Now the mindset was, “Let’s Play Outside!” They created a tool kit for kids to make their own soapbox racers. This positioned the company in the minds of the international audience. They also made John Deere toys which appealed to the U.S. market.

The owner is now a multimillionaire. However, Bas has two key observations:

1.) Today’s toy market is rotten, the child is neglected.
2.) Designers can make a difference.

Toy awards are given on the basic principle of which toy has the highest turnover. Retailers decide which toy will have highest turnover. We are feeding our kids toy junk. Shareholder value is best served by turnover of materials, so kids buy more toys. Read the book, “Consumer Kids.”

Alternative toys will never see daylight because they do not have high turnover. They are designed with an adult viewpoint. We have the layered customer that includes: child, parent, shopkeeper, teachers, governments, and others. The focus needs to be on the child. There are commercial offers versus alternative offers.

This is what a designer can learn from a child.

1.) Be a child, child!
2.) Go on! Get some bruises
3.) Materials matter
4.) You can’t always get what you want
5.) Be bored

This is what a child can learn from a designer

1.) Be bored (stop being busy)
2.) Stay amazed
3.) F… the rules!
4.) Play!
5.) Stay extreme and wild!

Today’s toy market leaves room for improvement. The child can be better served.