Creating and Managing a Successful Technology Product Strategy .


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Developing and Managing a Successful Technology & Product Strategy . Professor Rebecca Henderson MIT Sloan School of Management Phone: (617) 253-6618, Email: Rhenderson@mit.edu, http://www.mit.edu/people/rhenders/home.html. Who are you, and why did you come?. Who am I?.
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Creating and Managing a Successful Technology & Product Strategy Professor Rebecca Henderson MIT Sloan School of Management Phone: (617) 253-6618, Email: Rhenderson@mit.edu, http://www.mit.edu/individuals/rhenders/home.html

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Who are you, and why did you come?

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Who am I? Eastman Kodak LFM Professor, MIT Sloan School SB in Mechanical Engineering, MIT PhD in Business Economics, Harvard Research center: Building on innovation to create development: why is it so hard and what should be possible? Work in: Semiconductor capital gear, Aerospace, Automotive, Branded Consumer Goods Pharmaceuticals & Biotech, IT, Telecommunications

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What is a "system" at any rate?

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Effective systems answer three key inquiries: How will we Create esteem? In what manner will we Capture esteem? In what manner will we Deliver esteem?

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How will we make esteem? In what manner will the innovation advance? By what method will the market change? In what manner will we catch esteem? In what manner would it be advisable for us to plan the plan of action? Where would it be advisable for us to contend in the esteem chain? In what capacity would it be advisable for us to contend if measures are essential? In what manner will we convey esteem? How would we deal with the center business and development all the while? How would we utilize our technique to drive genuine asset distribution?

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Outline: Why do I require a development methodology? In what capacity will we make esteem? In what capacity will we catch esteem? By what means will we convey esteem? Doing technique practically speaking

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Why have a system?

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Why have a procedure? 1. To settle on decisions

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Is This Your Project Pipeline?

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Resources Required for Completion (months) Implied Development Resource Allocation (months) Active Projects Months to Completion (wanted) (formal advancement extends by number) This year Next Year after that 1 2 3 4 5 . . . 26 27 28 29 30 54 123 86 286 24 352 75 215 153 29 8 24 12 20 4 36 9 30 18 3 40 38 50 92 24 48 62 40 60 29 14 62 36 172 0 150 13 80 93 0 23 0 22 0 120 0 95 0 All Other Support Activity –– 430 (client bolster, investigating) Total Development Requirements –– 2783 2956 2178 Available Resources (months) –– 960 Rate of Utilization (percent) –– 289.9 307.9 226.9 Overload at PreQuip

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Overcommitment decimates profitability Average Value-Added Time on Engineering Tasks 100% 80% 60% 40% 20% 0% 1 2 3 4 5 6 Number of Projects for each Engineer

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ACTUAL MANAGEMENT ACTIVITY PROFILE The Timing and Impact of Management Attention Phases Knowledge Concept Basic Prototype Pilot Manufacturing Acquisition Investigation Design Building Production Ramp-Up High ABILITY TO INFLUENCE OUTCOME Index of Attention and Influence Low

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Why is it so difficult to kill extend #26? It\'s a "decent" venture! Great supervisors can meet extend objectives (and I\'m a decent director) Making troublesome choices requires some serious energy & vitality It\'s difficult to slaughter ventures without a system

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Reasons to have a procedure: 2 . To have the capacity to change it

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A Key Framework: The industry life cycle Era of Ferment/Discontinuity Maturity "Prevailing outline" develops Incremental Innovation

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The Industry Life Cycle as a S bend Performance Maturity Discontinuity Takeoff Ferment Time

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The S-bend Maps Major Transitions Maturity Performance Discontinuity Takeoff Ferment Time

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Transitions regularly challenge existing associations extremely

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But they additionally make significant open door Corning glass Cookware to optical fiber HP Instrumentation to PCs IBM Mainframes to PCs to Services Eli Lilly "Arbitrary" medication disclosure to hereditary qualities and genomics

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Discontinuities are hard! Answers to the key inquiries: How would we make esteem? How would we catch esteem? How would we convey esteem? CHANGE!

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Course Outline: First Day: How will we make esteem? In what manner will the innovation advance? By what method will the market change? In what manner will we catch esteem? By what means would it be advisable for us to plan the plan of action? Where would it be advisable for us to contend in the esteem chain? In what capacity would it be a good idea for us to contend if norms are critical? Second Day: How would it be advisable for us to convey esteem? How would we deal with the center business and genuine development all the while? How would we utilize our procedure to drive genuine asset portion?

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How should we make esteem?

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The first of 3 key inquiries How will we Create esteem? In what capacity will we Capture esteem? In what manner will we Deliver esteem?

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Creating Value: Understand how innovations will advance (Both your own and those on which you depend) Understand how client needs will advance Develop world class items and administrations that address client issues

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Agenda Predicting Technological Change The Delphi Model Trend extrapolation Predicting the Evolution of Customer Needs Basic division Crossing the gap New advances, new needs

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Can one figure the way of mechanical change? No But Delphi models Forecasting by similarity Trend extrapolation

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Delphi Models Ask the specialists! A council? Organized surveys? Aces Field specialists are frequently years in front of everyday practice: advancements don\'t "originate from no where" Cons They here and there have little learning of conceivable applications They can be enthusiastic

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Forecasting by Analogy The Internet will resemble: Personalized drug will resemble: The Xbox will resemble:

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Forecasting by Analogy Is nanotechnology like semiconductors? On the other hand like biotechnology? Then again like something else out and out?

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m 10 - 10 - 9 10 - 8 10 - 7 10 - 6 10 - 5 10 - 4 10 - 3 10 - 2 red platelet ~5 m (SEM) diatom 30 m Dimensions in Silicon and in Biology DNA proteins nm Simple atoms <1nm microscopic organisms 1 m SOI transistor width 0.12 m semiconductor nanocrystal (CdSe) 5nm Circuit plan Copper wiring width 0.2 m Nanometer memory component (Lieber) 10 12 bits/cm 2 (1Tbit/cm 2 ) IBM PowerPC 750 TM Microprocessor 7.56mm×8.799mm 6.35×10 6 transistors control natural machines

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Is nanotechnology like biotechnology?

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Is nanotechnology like biotechnology?

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Trend examination what\'s to come is regularly much like the past, just more so

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Trend extrapolation: Semiconductors

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Issues in Trend Extrapolation Which parameter might I foresee? Benefit all things arrive at an end? Investigating the contrast between advance as a consequence of the progression of time, and advance as the aftereffect of profits to exertion Predicting progress in corresponding advances

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Do every good thing arrive at an end? Mechanical fatigue Physical point of confinement? Execution Performance is eventually compelled by physical points of confinement E.g.: Sailing ships & the force of the wind Copper wire & transmission capacity Semiconductors & the speed of the electron Time

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Evolution of Measurement-While-Drilling devices S-Curve Physical cutoff: flag weakening Continuous M.P. - FSK 3G Continuous M.P. - BPSK 3G Performance = Data Transmission Rate (bit every second) Continuous M.P. - 2G Shallow wells just All well conditions Continuous M.P. - 1G Positive Mud Pulse second Generation Negative Mud Pulse Positive Mud Pulse Dominant Design = Continuous Mud Pulse Telemetry R&D Effort (measured in Generations = +/ - 3 years )

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MediLux 48 pounds The Evolution of Palomar\'s Products: Laser Based Skin Treatment E2000 Ruby Laser Material Product Price Cost Year EpiLaser ™ $150K $80K 1996 E2000 ™ $130K $60K 1997 LightSheer ™ $100K $40K 1998 SLP1000 ™ $65K $25K 2000 EsteLux ™ $40K $ 4K 2001 MediLux ™ $50K $ 4K 2003 NeoLux ™ $30K $ 4K 2003 StarLux ™ $80K $ 5K 2004 Lux Handpieces $10K $ 1K 2002-4 Home Devices ? ? LightSheer 400 pounds 120 Pounds

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Moore\'s Law at Work $1,000,000,000.00 10x diminishment $100,000,000.00 like clockwork $10,000,000.00 $1,000,000.00 $100,000.00 10x lessening at regular intervals $10,000.00 Dollars per MIP $1,000.00 $100.00 $10.00 $1.00 $0.10 $0.01 1959 1969 1979 1989 1999 2009 [Source: Hans P. Moravec 1998-2003]

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Modeling the profits to exertion versus time Performance might be a non direct capacity of exertion exhausted: in develop enterprises increasingly exertion may prompt less and less advance, while advance in rising businesses might be "shockingly" quick Effort

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Reflections on the S Curve Which unit of examination? Industry? Firm? Innovation? Item? Which measurement of execution? Exertion versus time? Could execution cutoff points be anticipated? The S bend is best seen as an apparatus for activating discourse, not as a "logical reality"

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The Evolution of Markets or Predicting the example of client needs

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Market Evolution over the Life Cycle Market division Crossing the gorge New markets, new needs: The Innovator\'s Dilemma

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The Key Question: Who purchases an innovation as it develops? Execution Time

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Understanding business sector elements: Basic division (Rogers) Units Bought Early Majority Late Majority Early Adopters Laggards Innovators Time Adopters contrast by, for instance, social, monetary status - especially assets, proclivity for hazard, learning, integral resources, enthusiasm for the item

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Understanding business sector flow: Crossing the gap: (Moore) Units Bought Crossing the abyss? Early Majority Late Majority Early Adopters Laggards Innovators Time Making the move from "early adopters" to "early dominant part" clients frequently requires the improvement of very extraordinary abilities: e.g. benefit, bolster capacities, significantly more broad preparing.

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Managing clients at snapshots of irregularity Who

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