Ten types of innovation

There is a growing force in Siemens MindSphere as it scales up in 2018.

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The move towards open-cloud based IoT operating systems has been significant in the past few years or so. Most major industrial companies have set about building and offering to their clients their platforms, for more open design and engineering, automation and operational work, as well as increased emphasis on maintenance and utilization.

To power this, digitalization has changed everything. The smart factory, plant, and buildings, work alongside smart products and solutions and smart business services are all in the sights of those industrial digital platform providers. The platforms-as-a-service has become essential to many industrial organizations to exploit.

I have been following a number of these in recent years and recently began to have a more specific focus on three; GE & their Predix, Bosch through their BSI and more recently Siemens and their Mindsphere. Others beginning to appear on my radar of industrial platform providers are Dassault Systèmes, Honeywell Connected Plant, Rockwell Automation and Schneider Electrics

Getting to understand Siemens MindSphere.

I had the opportunity a couple of weeks ago to be invited to the Siemens Innovation Day. I really appreciated it  The day before the main event I was included in the Industry Analysts visit to the Siemens Technology Center. We were provided a variety of insights in different presentations and demonstrations of the technology they are working upon. Mindsphere was consistent in its presence but was not as specifically focused on as I would have liked.

I put some of my thoughts down on a post “Creating the Industrial Ecosystem” about my take aways from this Siemens invite recently. I have been attempting to unravel my thinking between that that greatly impressed and the parts that still seemed to have innovation gaps to fill. MindSphere had a particular focus for me.

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We Are in the Middle of a Platform Revolution

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I was  not aware until recently that there are well over 450 providers of Platforms, all offering solutions, presently giving a very fragmenting market. Collaborators be aware!

There some substantial “biggies” that are covering the consumer market (social media ones such as Facebook) and business ones, where the growth in platforms will grow. If you break down the platform market into manufacturing, smart cities, energy, mobility, health, supply chain, retail, public services and many others, the use of IoT platforms are catching up with the consumer side.

One real growth area is the platform startup where funding seems to be strong. Cisco investments are backing a number as well as many others, seeing growing potential.

Amazon through its AWS is a clear standout for providing the platform-as-a-service. Everywhere you look today,everything is moving into a platform.

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Industry is lagging but catching up in its choices of platform offerings

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The platform has become essential for much of our social and direct engagements. The likes of Facebook, Amazon, Airbnb and many others are transforming much of our digital engagement for our social and private needs.

The lag has been connecting industry up, to the transforming value of ecosystems, to collaborate and build new value on co-developed platforms. There are some leading voices on this, determined to be the orchestrators- exploiting first mover advantage- who are heavily investing in the software and analytics to demonstrate value for not just themselves but drawing in lead customers to offer real, added ‘connected’ value.

I am watching three specifically in the digital industrial space of GE, Bosch and more recently Siemens as they build their ecosystems and offer their platforms as solutions into Industry.

These are among the growing voices on different aspects of innovation, connecting machines, data and new human understanding, of adding the new value or focusing on even more on the preventative aspects where industrial assets need to be constantly performing, as essential. For instance in aviation, power, energy, transport, and healthcare. They are at the forefront of reshaping entire industry dynamics.

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Rethinking the Value of Business Ecosystems

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Business is far from usual, it is transforming in front of our eyes. A business has to simply accept this is a changing world and business ecosystems are coming of age, perhaps adding more complexity but also to help bridge this transformation. The traditional silo mentality, the belief that your industry boundaries are immune to change and new challenges, is a grave mistake.

There is, or should be, a recognition that all businesses should find opportunities to coalesce into networked ecosystems. They need to open up to a far greater potential than is presently on offer to each individual entity, unless you have deep pockets (Apple), as well as so many app developers lining up to be part of their ecosystem, or patient shareholders (Amazon) continuing seeing growth but limited profit return, or inflows of revenue (Google), where you can invest in new, potentially huge but speculative, technology-related business concepts.

Ecosystems can offer so much connecting value out there to ‘form’ around.

We are witnessing a very radical change, driven by technology, increasingly disrupting and breaking down past traditional boundaries, partly built to defend positions so as to achieve economic scale. There is a new economic logic to build even greater scale, it involves greater complexity, yet its value proposition is to strive towards offer greater customer experience and satisfaction, where the solutions are valued highly in social and economic value. Ones that get closer to their connected expectations and daily needs for solutions to solve, in far better ways, than that are presently offered. Innovative design has become paramount to these new offerings.

The market dynamics are also changing. Those businesses with a different mindset of global trade and value proposition building will benefit. Risk is taking on different forms to capitalize on these changes. Today we can all be liberated through the exploitation of technology and new radical innovation design. In some ways, it has become a new ‘land grab’ panning for digital gold. We are at the point of building a new frontier that is calling for business change.

As we think through the impacts of the changes we need to reflect on some of its parts. Some of these are outlined here:

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We are failing to deliver radical innovation. Why?

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I see the growing importance of ecosystems and platforms for those that want a thriving future, these are the ones that simply “get this” need to connect into a wider ecosystem to build better value and solutions that customers want. The business imperative of today and near-term future is designing around ecosystems that seek out collaborative platform solutions.

Regretfully for those that don’t, the ones that hang on to the belief that their island of knowledge and their product offering are still good enough to meet the customer needs will face a very uncertain and bumpy future.

This is a delusion, utterly deluding, to continue as you have previously, as customers are today looking at “connected experiences” and these come out of far more complex back-ends of delivery, orchestrated on platforms, where the leverage of partners, technology, and common cause come together in highly collaborative ways. Also working on solutions that are recognizing that the front delivery end provides simplicity, ease of access and completion of the service or experience customers are looking for, far more as providing a more complete comprehensive, connected solution to their needs.

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Returning to the Interconnected Parts of the Ecosystem

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Credit Katri Valkokari

I wrote a post “the Interconnected Parts of the Ecosystem” earlier this year, after a paper written by Katri Valkokari, a Research Manager at VTT Technical Research Centre of Finland caught my eye. I wanted to come back to this really powerful visual, recognizing the three interrelated ecosystems we require to form around. I mentioned in my post, these three parts actually do fuse into one, making up an integrated ecosystem of their distinct parts.

It gave me a level of recognition that we do have this need for this three-stage evolution, especially in a business context. Each establishes a boundary of scope and feeds into each other constantly. It is the fact they combine ideas, skills, learning, fresh insights, leading to promising outcomes and creations. It is how they interact and add new value that gives this ‘combination effect’ such potential for us to consider.

The combining of tangible and intangible assets gives us ‘fresh capital’. I have written about Capital and consciously focused upon this, up to know, more under Innovation Capital, as this draws in knowledge through insights and then pushes these out from Knowledge into Organizations as concepts to be explored and exploited, to grow and improve.

Our innovation capital has mostly been internally built to date, yet there is a time and need to take this out with new forms of collaboration, leveraging all the combined assets into a new “collective capital”. This needs reflecting upon, of how you would ‘break this down’, perhaps within this awareness of all these three ecosystems that we do need to consider.

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What’s Reshaping Entire Industries?

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There seem to be multiple forces at work, ones that are reshaping how organizations are adjusting to a rapidly changing world, to operate within.

So much focus has been on the disruptive forces at work, the ones that change the present market conditions and rapidly alter the way organizations are “seeing the world” and responding.

The forces also include the pace and competitive nature as organizations globalizing and getting increasingly vulnerable to ‘attack’ due to their size and reaction constraints, locked into their established positions. The bigger the organization, the tougher to be nimble, adaptive and responsive.

There are many well-established organizations suffering the ‘death of a thousand cuts (read start-ups) all intent on taking business away, offering up more ‘viable and attractive’ propositions that meet specific needs of a customer base, one that is increasingly fed up with the ‘one size fit all’ approach. The attraction of new low-cost, good enough products, that do the job that they simply need doing without all the ‘added on’ is stripping away parts of the premium offer built into the past business model of large global organizations.

Organizations are seemingly caught between sustaining their existing business models and approaches to market and those waking up increasingly to finding a different, more radical one as they sense real threat. Technology is driving the need to change. The pressure of ‘connectedness’ and the whole ‘network effect’ are forcing rapid rethinks of how to combat these different pressures.

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Apollo and Baidu: the Autonomous Platform Builders

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In the latest update to its platform, Baidu says partners can access new obstacle perception technology and high-definition maps, among other features. We are told that the company with the most data will win. To get the real edge it is to have and train algorithms that interpret the intelligence and here you need to understand the value of AI (Artificial Intelligence).

Now there is a significant “buzz” on AI at present but where it is really taking off is in China and one company needs to be followed is Baidu.

How Baidu is going about this is to build ecosystems that commercialize AI technology and then attract this ecosystem of partners and developers to accelerate AI into actionable knowledge.

Then we see the Autonomous Platform emerging……

Just released a further update

Chinese search engine giant Baidu is to spend 10bn yuan (£1.1bn; $1.5bn) on new driverless car projects over the next three years. The “Apollo Fund” will invest in 100 autonomous driving projects over the next three years, Baidu said in a statement.. The move is an attempt to catch up with US rivals by enlisting outside help.It now has 70 partners across several fields in the auto industry, up from 50 in July, it says

The launch of Baidu’s “Apollo Fund” coincides with the release of Apollo 1.5, the latest version of its open-source autonomous vehicle software. In the latest update to its platform, Baidu says partners can access new obstacle perception technology and high-definition maps, among other features”.

Reuters News 21st Sept, 2017

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From footpath to Facebook: Building a platform

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I’ve been interested in what constitutes a “platform” and how platforms spawn and nurture ecosystems for quite some time.  We’ve been exploring these ideas in this blog over the last few months.

In this post I’d like to start identifying some of the key factors that anyone thinking about innovating or building a platform must consider.  To do that, I’d like to start, as the title suggests, by reviewing the first platforms.

The first platforms were paths, rivers and other means of improving human interaction and communication.  As interactions were improved and information flowed more easily, civilization, which is just a form of an ecosystem on a platform, developed.  Roads, canals and other forms of improved transportation simply became a better platform, and allowed the Romans to create financial and trade mechanisms not equaled until the 19th century.

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Platform understanding is growing

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I have put some focus back on the platforms recently, as this is becoming a real imperative to understand the whole meaning and implications of platforms, with the necessary management they require, so as to enable us to rethink different business models for the future.

There are without doubt real business implications in taking on a platform strategy as they really will be having such a transforming effect on all we do within companies and way beyond with others, including customers and even past competitors. They uproot the present and much of the established practicies.

They are changing the face of markets, industries, and competition but we within the established business world, mostly formed in the 20th centure seem slow to recognize their incredible impact, if we applied this platform thinking towards our own business, what would it mean?

There is a recognition that all innovation does not occur inside, it occurs from ‘open’ collaboration. It occurs from engagement and appreciating many others have better insights and possible answers, it is the power of combining them that has such economic consequence and great value creation potential. Our businesses are all becoming based on platforms.

The difficulty for many of us is first understanding what a platform is all about. The getting a clearer picture of the different types of platforms. Each has different tasks in building their specific “network effect” and how they are set up to interact and the type of problems they are attempting to solve. Some are really open, some are seeking growth, some are seeking collaborators to come together and work on ‘cracking’ more complex problems that one individual company would not be able to do.

In some of my recent updating of the platform breaking scene, I came across a terrific site that has created an open initiative to help entrepreneurs and organizations of all sizes to relate and build successful platform businesses, called Platform Hunt.

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