Innovation by SIT

In the last decade, it seems that if there is any agreement about anything, it is that we need to save the planet, and take responsibility for the environment and our influence on it. Never before has the color “green” received such significance and value.

Considering the great resources governments and companies dedicate to the purpose of sustainable innovation, we should ask ourselves – how should we manage our innovation? Can we go “too far”?

Let’s try and answer this question, using one of Boeing’s latest and most innovative projects as a case study: the new 787 Dreamliner.

In a world where aerial transportation is becoming more frequent, and carbon footprints fill our sky, the attempts of airline companies for sustainability are greater than ever. Airbus’s (Boeing’s European nemesis) sustainable solution was bigger airplanes – thus reducing the average carbon footprint per passenger. Boeing had a more innovative solution – the 787 Dreamliner.

The 787 Dreamliner is the first of its kind. The Dreamliner is made mostly of lightweight composite materials, hence consuming 20% less fuel for every passenger, emitting less carbon to the air and allowing quieter landings and take-offs.

Airbus has already started working on their answer with a similar lineup of materials for the 350-800 models, but they are not due until 2014.

Without a doubt, the 787 Dreamliner is a revolutionary vehicle, which may change the future of how we travel. If Boeing’s mission was to create an innovative sustainable solution for aerial travel, they succeeded in doing so, thus turning the 787 Dreamliner into an effective project. Unfortunately, this innovative project proved to be more demanding than Boeing ever planned, leading to  billions of dollars in unexpected losses due to delays in launching. So the question rises - was it an efficient project? Boeing did the right thing (effective), but did they do it in the right way (efficient)? Did Boeing take their innovation “too far”? To answer this question, we should examine Boeing’s innovation process a little more in depth.

To create the Dreamliner, Boeing took upon itself an innovative process that redefined its core capabilities, innovating not just its (1) product, but also its (2) supply chain and its (3) assembly line.

The 787 Dreamliner includes significant technological innovation, constructed of a new light combination of materials (50% composites by weight – 80% by volume). In addition, the 787 Dreamliner also includes new and more efficient engines, system application and aerodynamic updates of the wing surface.

In order to manufacture the Dreamliner, Boeing had to create a new model for manufacturing and assembling – creating new and dependent connections with suppliers from around the world. The result was a delay of more than a year and a half in launching. Boeing estimates losses at $2.5bn for late deliveries to customers in 2008 alone.

The Dreamliner 787 may have been a successful project, but it came with a great unexpected tag price. It seems that the innovation process was so comprehensive (including several of the company’s core capabilities), it required many more resources than planned, leading to significant loses for Boeing.

Are these the dangers of taking innovation “too far”? And if so, will playing it safe be the alternative? Not going “far enough” (Near) and merely creating minor upgrades for existing products? How can we know “how far” to take our products?

Many companies confront the tension between creating products that are so innovative that they reduce costs, to “upgraded products” that don’t offer real innovation or competitive advantage.

In SIT terms, we ask: how can we aim for that “sweet spot” between those two extremes. The principle of Near-Far-Sweet (NFS) exemplifies the tension between the two, and helps us develop products that are not only innovative but also applicable.

A good example of the NFS principle is Apple’s Ipod Shuffle.
On the one hand, by taking out the display screen from the original Ipod, Apple created a product that was “Far” enough from its original to attract real interest - offering a dramatic and innovative change for the consumer. On the other hand, the actual process was simple enough, based on Apple’s existing pipeline and capabilities (Near). The result was a new innovative brand of Ipod adopted by a new target audience - sport lovers that have no need for changing songs in mid-activity. Sweet.

NFS is one of the principles of the SIT process, which calls for innovative ideas to be drawn from the products, capabilities and knowledge the company already has (Near), hence reducing the chances for innovation that isn’t practical or competitive (efficient). And by using systematic tools and principles for innovation, rather than the preconceptions of customers or markets, you can generate ideas that are “Far” enough from what you and your customers know and expect, reaching that innovation “sweet spot” (effective).

The Boeing’s 787 Dreamliner is a praiseworthy product, and we can only hope future innovative projects will have a similar impact on the environment. Perhaps future sustainability projects, managed systematically with innovation tools like the NFS principle, will prove to be more efficient as well.

Shachaf Snir  is an intern at SIT, part of the Knowledge management team.

Shachaf and the rest of us at SIT would be happy to talk to you about innovation.

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