Breakthrough innovation for incumbents and entrants, that’s important topic for any R&D leader to consider especially at larger companies. One person who’s had active experience with both sides of the industry story is James “Jim” Hoffmaster, who was formerly the President and COO at Cognex Corporation and Division President at Emerson Electric. Jim has extensive experience in bringing products to market, and guiding the strategic direction of R&D for companies in the manufacturing automation industry. I recently sat down with Jim and chatted with his experience and thoughts on the topic of breakthrough innovation.
Breakthrough Innovations
I started off by discussing the topic of breakthrough innovation, and asked Jim about his understanding of the term. Here’s what Jim had to say on the topic, Jim said, “a breakthrough innovation is a product or service, that leapfrogs the competition, and your customers recognize that and vote with their dollars in your favor. A breakthrough innovation, leads to market share gains and increased profitability, and allows you to break into new markets.”
Category Leadership
Breakthrough innovations are often associated with category leadership, and I asked Jim what is the importance of such innovations for achieving or maintaining category leadership? Jim said, “Breakthrough innovations are extremely important if you are not the category leader, and you want to achieve category leadership. If you are the category leader, breakthrough innovations are the best way to defend category leadership. A great example where an incumbent did not recognize and respond to a breakthrough would be Digital Equipment Corporation. DEC was the category leader in mini computers. When personal computers arrived, DEC did not pursue the category, and this ultimately led to the demise of that company.”
Staying Ahead of Entrants That Introduce Breakthrough Innovations
I asked Jim if he had any examples of category leaders who had maintained their leadership, he looked back to his time at Cognex, and Jim told me, “In the machine vision industry, around 2000 – Cognex was the clear leader in machine vision technology; the products solved difficult problems, but needed to be deployed by experts. A competitor came along, with good enough machine vision technology that was easy to use, so the customer could do more of the deployment themselves. Cognex recognized this breakthrough innovation, retooled, and came back to beat that competitor on ease of use. Ultimately Cognex acquired the competitor, but by that time we had already responded to the ease of use paradigm.”
Breakthrough Innovation Leadership
Jim had given a great example of how an incumbent can stay ahead of entrants with Cognex, I next asked him if he had any personal experience with achieving category leadership through breakthroughs, he had, Jim told me about this experiences at Emerson Electric. He said, “Emerson had the best portfolio of field devices in the industry, however at the time Emerson’s control systems were not the industry leaders, they were 4th or 5th. Two of the leading systems suppliers started winning projects by bundling their control systems and field devices. Emerson’s field devices weren’t competing on a level playing field. Emerson decided we had to make a fundamental breakthrough. Delta V was our response to the bundling strategy. DeltaV leapfrogged the competition on several fronts – including ease of use, scalability, integration of field devices and advanced control capabilities. DeltaV enabled Emerson to move from number 4th or 5th to category leadership in the markets they served.”
Leveraging Technology Platforms
Jim’s story about Emerson illustrates the importance of thinking about your overall technology platform. Here’s what Jim said, “When Emerson brought Delta V to market the competitive offerings used proprietary networks and high end workstations, and their control and I/O systems were not very scalable. We focused on building a platform with Delta V that would lower costs, be highly scalable and be dramatically easier to use. To achieve that, we adopted several commercial technologies, including Ethernet, commercial PCs and the NT operating system. Ethernet and commercial PCs gave us a tremendous cost advantage over the engineering workstations and proprietary networks the competition was using, and they were an important part of making the system highly scalable. By choosing NT, we were able to take advantage of the fact that almost all of our target users would find the software to be very familiar, and that really helped us meet our ease of use goals. Taking advantage of those commercial elements let us focus more of our own work on making the control and I/O systems highly scalable. To put it in perspective, we were able to offer full-featured DeltaV systems, right-sized for small projects, at one fifth the price of the smallest configuration of competing systems. We positioned Emerson to deploy solutions with clients at the lower end of the market, which could be expanded seamlessly to the largest installations needed.
Jim Hoffmaster did a great job on the topic of breakthrough innovations; I’m going to continue the conversation with a second post on the topic of R&D leadership skills for breakthrough innovations.
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