Category: Innovation

Custom program helps global giant Schlumberger integrate product development and innovation technologies

Posted by MIT Sloan Executive Education - 6 days ago

Schlumberger integrate product development and innovation technologies

How does a legend in the oil field sector maintain its leadership position? Schlumberger--known for its industry-leading technology and deep expertise in the oil field sector--recently challenged itself with that question. The global company employs approximately 100,000 employees who hail from more than 85 countries and encompass 140 nationalities. With such a diverse workforce, the ability to share knowledge and ensure smooth teamwork is critical to the success of its business.

"Our personnel have grown much more diverse over the last few decades, and our increasingly decentralized R&D operations are regularly generating new product lines," explained Schlumberger's Management Development Director Joe Perkins. "The challenge for us is to find a common language that will enable us to look at innovation and product development as an integrated chain, from the field to the lab on through to our business operations."

With that goal in mind, Schlumberger executives decided to collaborate with MIT Sloan to develop a custom program, which was inspired by several Schlumberger senior executives who participated in the School’s popular program, Driving Strategic Innovation: Achieving High Performance Throughout the Value Chain (DSI). A joint program with IMD, the DSI program draws on an integrative value chain framework created at MIT and helps participants learn how to build organizational relationships that facilitate knowledge transfer within the firm and across the value chain.

While enrolled in the DSI course, the executives discovered that MIT Sloan's ability to integrate advanced research, new technology, and innovative business practices was exactly what Schlumberger needed to stay ahead of the competition. They also realized that the DSI course encompassed critical elements that could be applied at Schlumberger--from causal loops in the energy market to innovation, value chains, supply chains, and marketing.

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Mobile giant asks MIT to help it maintain its edge

Posted by MIT Sloan Executive Education - 19 days ago

china mobile

Although China Mobile is the largest mobile company in the world, several years ago the successful, high-ranking member of the global Fortune 500 realized it needed to up its game to compete in the world market. The telecom giant recognized that applying innovation to all aspects of its company--from new products and services to operations processes and marketing strategies--was the way to address the rapid changes occurring in the telecommunications industry and also ensure its long-term success.

"In order to maintain China Mobile’s leadership position in the world, we need our executives to think strategically, have a global perspective, and hone their innovation skills--all contributing to improved management capabilities," explained Mr. Zhang Xi, HQ HR, General Manager at China Mobile.

In an effort to expose the company's senior executives to the most progressive ideas about innovation, China Mobile explored working with leading U.S. universities known for their research in that area. In addition to Tsinghua University in Beijing, the MIT Sloan Custom Program was selected. "We believe that MIT has always been the cradle of the latest technology and scientific research in the U.S.," said Karen Li, Associate Director of Executive Education at Tsinghua University, adding that the two universities already have a long-term partnership in MBA programs.

At the outset of the program, China Mobile and Tsinghua University worked in tandem to leverage MIT's cutting-edge innovation research and identify critical business challenges facing the company. In particular, the China Mobile leadership team was interested in concepts that would help to propel the company as a whole--such as platform strategies and value chains. "Our main goal is to learn from the world-renowned faculty and best American companies and try to simulate best practices in our daily work," said Mr. Zhang.

To that end, executives in the custom program explored leading innovation and strategy research by MIT Sloan faculty, and visited research labs as well as companies in the MIT ecosystem. Program materials focused on general management concepts such as strategy and innovation. As the program progressed, the sessions combined content-rich lectures and small-group discussions on topics ranging from general management ideas about leadership and strategy to more industry-specific subjects like big data, mobile trends, and digital marketing.

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Insights for GE as it relocates to Boston's unique "innovation ecosystem"

Posted by MIT Sloan Executive Education - 7 months and 11 days ago

Formerly known as General Electric, GE announced this January that it is moving its corporate headquarters from suburban Connecticut to downtown Boston. In the Boston Business Journal's recent coverage of the story, GE Chairman/CEO Jeff Immelt said: "GE is a $130 billion high-tech global industrial company, one that is leading the digital transformation of industry. We want to be at the center of an ecosystem that shares our aspirations."

Formed by the 1892 merger of Thomas Edison’s company with Massachusetts' own Thomson-Houston Electric Company, GE is not alone in considering the Boston area as a world-class hub of innovation. Earlier this month, Bloomberg confirmed what many of us who live and work here know to be true: Massachusetts is the most innovative state in the nation.

So what does GE's move to Boston mean for the Commonwealth, for the City, and in particular for our innovation ecosystem? And what might GE like to know, even at this stage, as it thinks through how best to leverage the innovation and entrepreneurship that drive much of the activity in Greater Boston and beyond?

Let us start with defining the expression "innovation ecosystem" that has been so widely used in the discussions of GE's decision.  In our work at MIT, we define an innovation ecosystem as the connections among five key stakeholders: entrepreneurs (of course), universities (as you'd expect), and risk capital providers (beyond just VCs)--but also with key roles for government and large corporations. 

Innovation model

In our research on, and teaching about, such ecosystems around the world, we emphasize that an ecosystem relies upon the collective actions that these stakeholders take to contribute and share resources (talent, ideas, infrastructure, money, connections). 

Our work also shows that such innovation ecosystems are complex and sometimes fragile things.  Many places in the world wish to emulate such an innovation hub, but few pull off the alchemy necessary to launch or sustain such ecosystems.  As such, we have been increasingly highlighting (e.g., in BetaBoston,) the importance of a certain innovation diplomacy within and among the various stakeholder groups, recognizing the interests of the other parties, and taking actions that find opportunities for mutual long-term benefit.


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Is Greece missing an opportunity to turn to innovation-driven entrepreneurship?

Posted by MIT Sloan Executive Education - 9 months and 2 days ago

Projections for the economy in Greece are dire. Economic recovery is not certain, and when it comes, it will certainly be long and painful. And despite BloombergView stating, "While not out of the woods, Greece’s large banks seem to be showing signs of life," there’s still widespread unemployment and an overall bleak outlook.

Phil Budden, Senior Lecturer at MIT Sloan, argues in Fortune that the current fiscal crisis can be turned into an opportunity for the country. Budden recommends the country and its people follow the advice of Winston Churchill by "never letting a crisis go to waste." Greece might follow the example of other countries that have struggled economically, and it could begin to "gradually shift its focus away from macroeconomic problems and toward the task of creating an innovation ecosystem."

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Tesla--innovating innovation

Posted by MIT Sloan Executive Education - 10 months and 26 days ago

Tesla was recently named to the top of The World's Most Innovative Companies list, produced by Forbes magazine. This is despite the fact that the company will not be turning a profit this year. Of course, there is a strong expectation that the company will become profitable. But in the meantime, its approach to innovation is, in itself, innovative and somewhat counter to the standard operating procedures used by many so-called innovative companies.

Hal Gregersen, Executive Director of the MIT Leadership Center, and co-author Jeff Dyer, recently examined some of the unusual strategies and tactics used within Tesla in "Decoding Tesla's Secret Formula," an article that accompanied the Forbes' list. Here are some of the ways Tesla is defying convention--even the convention of innovation.

Forget the MVP

The Lean Startup methodology recommends companies focus on developing a minimum viable product (MVP) before creating a full-blown product. The idea is that the MVP is the core of a build-measure-learn feedback loop that helps guide a company to building a product that solves a real problem, and one that companies will buy. The measure-learn aspect of the loop addresses the "buy" aspect of developing a product.

According to Gregersen, Tesla takes a completely different approach. "Tesla never pursued the classic route of going after low-end, price-sensitive customers first with cheaper, inferior technology. It doesn't pursue nonconsumption, or customers who don’t currently drive cars," writes Gregersen. "Tesla has instead proved to be a different kind of disruptor, a high-end version that can be just as troublesome for the incumbents." 


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Why commonality sometimes fails

Posted by MIT Sloan Executive Education - 11 months and 19 days ago

Commonality, or the reuse and sharing of components, manufacturing processes, architectures, interfaces, and infrastructure across the members of a product family, is a strategy targeted at improving corporate profitability. Companies from Toyota to GE use product platform strategies to deliver more variety to their customers and compete more effectively. For example, Black and Decker uses shared motors and batteries across a range of power tools. Volkswagen models such as the Jett and TT share similar underbody components and other aspects.

Typical benefits of a commonality, or a product platform strategy, include:

  • Shared development costs
  • Common testing procedures
  • Production economies of scale
  • Amortized fixed costs
  • Reduced inventory

By definition, commonality seems like an obviously good thing. Why incur the cost of making different parts for different products if the parts do the same thing?  Because as it turns out, commonality is not always the right thing to do. And even when it is right, it can be difficult to achieve.

Dr. Bruce Cameron is a lecturer in MIT's Engineering Systems Division and a consultant on platform strategies. His research at MIT uses a healthy dose of systems thinking to tease out when commonality makes sense and how to get companies to pull it off. Cameron oversaw the MIT Commonality Study, which closely examined 30 firms over eight years. The study was the first work to uncover that many firms fail to achieve their desired commonality targets, showing weaker investment return on their platform investments. "That type of behavior and phenomenon is seen in studies that we did in automotive, consumer products, and transport," says Cameron.

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Simple Rules: A new book by strategy expert Donald Sull

Posted by MIT Sloan Executive Education - 1 year and 9 days ago

Simple Rules small

The world is highly complex, and we struggle to manage the complexity of it every day. Most os us accept this complexity as unavoidable, attempting to manage the complex systems we face with complicated solutions. But meeting complexity with complexity can create more confusion than it resolves. So how can people better manage the complexity inherent in the modern world?

Donald Sull, Senior Lecturer at MIT Sloan, swears by simple rules, whether in his personal life or in helping companies he consults with make better decisions. His latest book, Simple Rules: How to Thrive in a Complex World, co-authored with Stanford University's Kathleen Eisenhardt, aims to help more people put these simple rules in practice.

A decade ago, in the course of studying why certain high-tech companies thrived during the internet boom, the authors discovered something surprising: To shape their high-level strategies, companies like Intel and Cisco relied not on complicated frameworks but on simple--and quite specific--rules of thumb. The simple rules these companies had mapped out in order to manage complex processes helped them make on-the-spot decisions, adapt to rapidly changing circumstances, and bridge the gap between strategy and execution. All this even though they were in extraordinarily complex, challenging, and fast-moving industries.

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The path to new ideas: Tinkering, testing, and Play-Doh

Posted by MIT Sloan Executive Education - 1 year and 20 days ago

Play-Doh 2

Previous posts in our series on innovation* surveyed four of the five skills found in some of the worlds most innovative executives: Observation, associating, questioning, and networking. In this final post in the series, we’re sharing insights on experimenting--the final discovery skill that perhaps best differentiates innovators from non-innovators.

The argument that innovators are experimenters is certainly not new. According to Hal Gregersen, Executive Director of the MIT Leadership Center and co-author of The Innovator's DNA: Mastering the Five Skills of Disruptive Innovatorsit's the ways in which they experiment, however, that sets them apart. The innovators in his ongoing research--including founder entrepreneurs and CEOs at the most innovative companies in the world--often generate their best ideas when engaged in one of these three approaches to experimentation:

  1. Trying out new experiences through exploration (think Steve Jobs at an ashram in India)
  2. Taking things apart, either physically or intellectually
  3. Testing ideas through pilots and prototypes

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