Fragility, Anti-Fragility and InnovationBill Wadewade-partners.com

Weve Been Discovered !

Complete Surprise: The Black Swan

What is the opposite of Fragile?

What is the opposite of Fragile?

antifragile: something that benefits from stress, harm, chaos, events, disorder, unforeseen consequences, uncertainty, time

Astronaut Atrophy

Tourist Trophy HuntAir Travel

Mithridates VI

Human systems are antifragile.Humans are antifragile.

Removing stress doesnt make us stronger.

Removing skin from the game.

Making everything bigger.

Stifling freedom of everything.

Risk Forecasting

Trains Will Haul Bulk Power Plant Fuel

Trains Will Haul Bulk Power Plant Fuel

OOOPS !

OEM Component IntegrationOEM Vocational StandardizationDesign for Recycle- abilitySupplier System PartnershipDeath of Diagnose and Repair Severe Technician Shortage

Major Structural Trends (Threats?) In the Ag Equipment, Parts and Service Markets

Anti-Fragile Strategies John Deere to Titan to Ralphs Farm SupplySize alone is not a strategy nor is a footprintFee follows function discounts become discriminateInformation is the ultimate pop code AVIN tyranny splintersWar declared by European (and Domestic) OEMsTungu explodesNet conquers gross and CASH conquers all!

InnovationAll that distinguishes leaders from followers S. Jobs

Offense or DefenseWhat does this really mean to you?

Is Your Model Sustainable Machines, Markets, DistributionFacing the Great ModerationDefine the New NormalIndefinite WarrantyPermanent World Maps ?Guessing the FutureEconomic CyclesMarket has called 9 of the last 5 downturns

Innovation

The only net creator of new wealth.

Innovation is all that foiled Malthus.

Global warming next ?

InnovationThe only net creator of new wealth.Something newly tried. New combinations.Creating a portfolio of options to achieve substantial, profitable and sustainable growth.Other activity is caretaking, improvement at the margin or rearranging the deck chairs.

Fortification vs ExplorationTension between defending existing dominance and creating new growth pathsChance favors the prepared mind or company

Innovation How to?

Be absolutely clear about the mission to everyone.Create just enough structure.Match people and horizons.

Innovation How to?

Think businesses beyond product or technology.Innovate on behalf of your customers not your existing position.Diverge early converge late.

Things Ive NoticedIterate and communicateDont try to predict buy optionsRunway. electric cars vs. newspapers

Business Innovation RadarCreation of radical new value for customers In the beginning, all you have is data and intuitionAlmost never just product

Create Insight, Avoid ReflectionIndustry mirrors ?Best Practices Kill!Which industry orthodoxy can be challenged?We only see things for which we are looking.Mission Focus: Target DefinitionMission Clarity: Organization Understanding

Periphery Is Your Preferred FrontierIt is where to look first, but not exclusivelyAvoid the Success TrapChaos vs. StructureThe better we are at this, the tougher it is to try thatDefine Factors of Merit Speak multiple languages in multiple worlds.

Perspective is everything10 Ways to Slice It.

Offering-Creating new product or SERVICESSignificant AugmentationToyota HybridsApple IpodSony 4 generations and 150 variations of WalkmanMerrill Lynch Cash Management Account

Platform- Exploiting commonality

Common components as building blocksAirbus common cockpitsGM OnStarDisney animationMicrosoft Suites

Solution- Solve complete problems

Customized combinationsUPS complete 3PLDuPont selling painted bodies to FordIBM bundling of hardware, service and financing

Customer- Serving unmet needsIdentify unarticulated latent needs and resegment marketsChrysler minivanHome Depot almost proFedEx segmenting by time instead of volume

Customer Redesign interfaceBroaden touch points and life cycle interfaceSaturn no haggle pricingCabelas store as entertainmentAmazon returns handlingEverything about American Girl

Value Capture- Changing how you get paid

Changing yield management or position in the value chainGoogle paid search GE time in airProgressive utility pricing

Organization and ProcessDesign for internal improvement and process streamliningBoeing 7873M Slack DayGoogle 20% programCisco partner centered network

Supply Chain FlowPrimarily increased communication within channelsWalmart VMIDell user-direct one-off manufacturing designHome Depot/GE appliance floor plan

Presence- How customers access youAugmenting channel mix, including self serviceEnterprise in repair shopsNetflixMcDonald's and BOADiebold remote teller

Networks-Exploit network intelligenceLeverage network connectivityOtis elevatorElectrolux auto replenished refrig Peapod edible billboards

Microsoft Xbox Live channel

Brand LeverageCo-Branding into new product classesVirgin Mobile, Air, etcCat BootsIntel InsideYahoo as a lifestyle brand(not Champion filters!)

Drivers of Service / Dealer AffinityAccelerating Regulation (i.e.. OSHA) Extended Trade Cycles (new normal)Vehicle EconomyRefurb Economics Warranty Control Proprietary InformationLabor Shortage

Fuels It is all about the juice!Ethanol (17) Westport EngineBiodiesel (19) Electrics / Hybrids Hydrogen (21) Green Issues CNG (23) LNG (23) Synthetic Diesel (26) Methanol (27) DME (29)

Innovation Boosters: Adaption and Aliens

2014Labor Shortage and the Agent EconomyOutsourcing and Aliens

Ferguson/Wolseley, Grainger, HD Supply, MRC Global Corp. (formerly McJunkin-RedMan), Airgas, Motion Industries, Fastenal Company, McMaster Carr, Applied Industrial Technologies, MSC Industrial Direct, Wurth (North America), Kaman Industrial Technologies, BDI, Barnes Distribution Industrial Distribution Group, SunSource, Lawson Products, BlackHawk Industrial Distribution

B-to-B from the B-to-CLowes has launched their Lowes ProServicesAce Hardware has The Supply PlaceStaples has a strong B-to-B component that now includes medical supplies.Home Depot On Set

Distribution Trend - Service Overtakes Box Pushers

Services Emergency Services Energy Services Grainger TripleGuard RepairInventory Management Online Purchasing Solutions Product Services Products Beyond the Catalog Safety Services

Technician Training

Who do you expect to provide this and who should bear the cost?Delivery Lets discuss the different possibilities.Technician shortage How concerned are you? What is your strategy for recruiting?

Newest Service: 3D Parts Printing

TypeTechnologiesMaterialsExtrusionFused deposition modeling (FDM)Thermoplastics (e.g. ABS), HDPE, edible materials, Rubber RTV silicone, Porcelain, Metal clay (including Precious Metal)WireElectron Beam Freeform Fabrication (EBF3)Almost any metal alloyGranularDirect metal laser sintering (DMLS)Almost any metal alloyElectron-beam melting (EBM)Titanium alloysSelective laser melting (SLM)Titanium alloys, Cobalt Chrome alloys, Stainless Steel, AluminumSelective heat sintering (SHS) [18]Thermoplastic powderSelective laser sintering (SLS)metal powders, ceramic powdersPowder bed and inkjet headPlaster-based 3D printing (PP)PlasterLaminatedLaminated object manufacturing (LOM)Paper, metal foil, plastic filmLight polymerizedStereolithography (SLA)photopolymerDi