Thursday, July 29, 2010

SDM Students Meet System Dynamics Founder

Jay W. Forrester, the founder of System Dynamics, with students from MIT System Design and Management Program. Dr. Forrester recently visited SDM's System Dynamics class, taught by Brad Morrison.
Photo by David Schultz

Wednesday, July 28, 2010

MIT System Design and Management Program Hosts Experts on Cloud Computing, Entrepreneurship, Leadership

By David Rosenbaum

On Monday, June 28, the MIT System Design and Management (SDM) summer 2010 business trip kicked off at the Faculty Club with a keynote address on entrepreneurship and leadership by Mamoon Yunus (MIT Mechanical Engineering, 1993 and 1995), President and CEO of Crosscheck Networks.

Mamoon Yunus, MIT Mechanical Engineering, 1993 and 1995 and President and CEO of Crosscheck Networks, spoke to SDM students at a luncheon at MIT's Faculty Club during the summer SDM business trip.

Yunus, who was introduced by Unatek CTO Charles Iheagwara (SDM 2010) after an opening statement by SDM director Pat Hale, saw a "gap" in the cloud computing movement and in 2004 founded Crosscheck to build technology that would scrub XML traffic in the cloud. Seeing gaps, said Yunus, is key to success.

"You can’t innovate in a vacuum," Yunus said. For example, after speaking at Harvard Business School he was approached by several MBA students who asked him, "‘How does one generate ideas? We know business, but are looking for ideas where we can apply our business skills."

"You have to keep your eyes open for gaps in an industry," Yunus told them. "The United States Treasury uses Crosscheck to inspect tax submissions from online sources such as Turbo Tax before allowing internal tax processing."

But seeing gaps is not enough. "You need partnerships," Yunus said. "You need to find ways to piggyback your product on an OEM’s product," as Crosscheck did with its XML Gateway product.

To realize those partnerships one must be able to present products to OEMs and investors in terms they can understand, which is why Yunus appreciated the courses he took at MIT Sloan. "When you’re a start-up," said Yunus, "there will be someone on the other side of the table who will challenge your numbers."

Yunus learned leadership on the fly. He distilled what he learned into three main points:
  1. Focus on creating core value; leadership will follow.

  2. Reduce personal financial risk; that frees you to make long-term decisions.

  3. Trust your team, but verify.

The trip continued on Thursday, July 1, with a panel discussion at the Faculty Club. The panel included:

(Left to right) Rob Kramer, Chief of Applications Development and Operations at the Washington Metropolitan Area Transit Authority, Ajay Mishra, Global Head of Innovations Management at Nokia Siemens Networks, and Darren Hammell, co-founder and EVP, Business Development at Princeton Power Systems discussed, among other topics, innovation and success with SDM students at the MIT Faculty Club.
Photo by Dave Schultz

The panelists represented three very different enterprises: Mishra, a global giant; Kramer, a governmental provider, Hammell, a start-up. Consequently, their responses to the questions asked by Charles Atencio (SDM 2009), Jennifer Wang (SDM 2010), and Donny Holaschutz (SDM 2010), varied greatly.

On implementing and encouraging innovation, Mishra relies on robust information transfer processes to ensure new ideas reach Nokia Seimens’ decision makers, and that those ideas are swiftly analyzed. In Hammell’s operation, he needs to ensure he’s open to new ideas. At the Transit Authority, innovation is not a priority; instead, Kramer’s customers -- bus and train riders -- require operational excellence.

Mishra, Hammell, Kramer were aligned, however, on the personal qualities required for success.

"What made me successful," said Kramer, "is loving what I do. My mother wanted me to be a doctor, but I loved computers. My leadership rules: 1. Do unto others as you would have them do unto you; 2. Listen to your team and let them do things their own way - so they will take ownership."

Hammell boiled it down even further: "Never give up. And be optimistic. Things will work out if you keep trying."

Mishra ended the panel by pointing to the importance of personal commitment. "Decide to be successful," he said. "If you waste time, you waste everything. MIT’s System Design and Management Program gives you time to think about what you can do, aided by the best minds in the world."

Monday, July 26, 2010

SDM broadens thinking on technology strategy

By John Helferich, SDM ’10

Several years ago, I tried to put together a global technology strategy for Mars Inc. I hired a consultant and held numerous meetings and conference calls across the corporation. It all culminated in a meeting in a Munich hotel room that ended with nods and yesses. Unfortunately things fell apart after that and we never did finalize a strategy. What went wrong? Why couldn’t we create a strategy that could get global buy-in?

This nagged at me until I took Professor James Utterback’s technology strategy class this spring as a student in MIT’s System Design and Management Program (SDM). I expected to be assigned to write a technology strategy, and I planned to use the class to revisit my failed Mars’ strategy. To my surprise, Utterback argued that there is no prescriptive way to develop a technology strategy—each firm must find its own way. In other words, there is no one way for a firm to develop its approach to create and capture value.

Utterback divided the course into three parts, beginning with lectures based on his 1994 book, Mastering the Dynamics of Innovation. The book was founded on the ground-breaking work on the dynamics of innovation by Utterback and his colleague Professor Bill Abernathy of Harvard. Beginning with the now-famous history of ice harvesting (a successful innovation snuffed out by the advent of refrigeration), Professor Utterback led us through the ins and outs of the dynamics of innovation.

In the second part of the course, teams addressed key issues of strategy and innovation by developing a presentation based on a literature search of the topic. Topics ranged from innovation in services to dynamic capabilities. The teamwork, which involved conducting a thorough literature search and then agreeing on what it all meant, was good preparation for the back and forth needed to achieve a solid technology strategy.

The third part of the course was the highlight for most of us. Utterback and his teaching assistant, Yukari Kuramoto (a graduate student at MIT Sloan School of Management), selected 12 books about innovation, strategy, and design. Each of eight teams then selected one of the books to read, review, and critique. Utterback put the icing on the cake by inviting the authors to appear in person or on video to answer questions posed by the team and the class. This was an excellent opportunity to see beyond the book and understand the thinking of the author first-hand.

Besides the elements of technology strategy, we learned two important lessons. The first was always to consider the dynamics of strategy; a static analysis that ignores the changing nature of the corporation over time is never enough. Secondly, the only books worth considering are those based on significant research and not just conjecture.

In his other class, Disruptive Technologies—Predator or Prey, Utterback took a similar approach with lectures, case discussions, guest lectures and, most importantly, student projects.

The class, as the name suggests, is about helping students understand disruptive technologies, the effect of disruptive innovations on existing technologies, and how to identify and analyze new technologies that might prove to be disruptive.

We studied how disruptive innovations have caused large companies and major industries to fail in the past—by looking at the invention of electricity and mechanized icemaking disrupting the gas lighting and natural ice industry as examples. We also learned about the differences between the effects of disruptive technologies in assembled products industries (like computers) vs. homogenous industries (like glass manufacturing) as well as the factors to take into account while trying to analyze the disruption potential of a new technology.

During the term, we heard from fascinating guest speakers such as Joel Schindall, who explained his research breakthroughs storing energy in carbon nanotube ultracapacitors, and Irving Wladawsky-Berger, who talked about cloud computing and the growing importance of services in all industries. We also had the opportunity to discuss current innovations that might prove to be innovative with Harvard Business School Professor Clay Christensen, author of The Innovator’s Dilemma, as well as current mobile software platforms with Boston University Associate Professor Fernando Suarez, using the cases he has written.

Finally, to put all the learning into practice, the students were asked to choose any technology they find interesting and explore it—in terms of current technology, research investment, patents, paper publications, and technology trajectories—and determine possible implications to the market dynamics that the particular technology might have. We looked at and heard about such technologies as cloud computing and thirdgeneration solar cells (which are well-known but perhaps not as well understood), as well as such radical technologies as hybrid aircraft, saltwater desalinization technology, and privatization of commercial space travel.

Thanks to the group projects, we all appreciated the difficulties and work involved in analyzing the business implications of new technologies/innovations and learned that there certain indicators that might help in identifying the potential disruptors. But in the end, we all found that it is still very difficult to predict the future with any certainty!

To close I would like to note the eye-opening impact that members of the SDM cohort had in each class on our collective knowledge development. Cohort members hailed from approximately 15 different countries and had an average of eight to nine years of experience in a range of firms, from startups to global operations. The collective wisdom they brought to class had an enormous impact on the range of insights we all made into the various problems addressed. Each of us benefited not only from our teammates’ experience but also from the knowledge other teams shared with the class. I think the SDM community really provides a one-of-a-kind opportunity for such dynamic knowledge development.

Tuesday, July 6, 2010

The System Design and Management Gospel, according to Ed Crawley

SDM co-founder explains difference between value propositions of MBA vs. masters in engineering and management

By David Rosenbaum

Success, it’s said, has a thousand fathers. But there’s no disputing that one of the System Design and Management Program’s (SDM) most prominent fathers is Ford Professor of Engineering Edward Crawley.

"Historically," says Crawley, "people believed you needed to get a BS in engineering and then an MBA. But that’s an intellectually incomplete approach that has little to do with either engineering practice or leadership of engineering endeavors. The SDM program was created to fill that need."

According to Crawley, who co-founded SDM with Institute Professor Tom Magnanti, SDM’s genesis began in the mid-1980s. U.S. manufacturers (including Boeing, United Technologies, IBM, and the Big Three auto makers), believing they had lost their competitive edge to Japan and to new manufacturing process strategies such as TQM, lean, and the Toyota Production System, asked MIT to educate a cadre of students who could reform U.S. manufacturing and accomplish, says Crawley, "systematic organizational change."

However, at that time Crawley says "MIT engineers were not educated to tackle enterprise-wide challenges." Their academic training focused narrowly on bench science, not on what Crawley calls the broad vision of "Big E" engineering. Industry was begging for a new kind of engineer, educated to lead and to understand business while still capable of creating, in Crawley’s neat phrase, "new gizmos for humanity."

Because manufacturing was an obvious starting point, the Leaders for Manufacturing (LFM) program was created to explore whether it was possible to design practices that could be applied on factory floors across industries as diverse as IT, aerospace, automotive, and chemicals. With that program’s success, MIT’s new Dean of Engineering, Joel Moses asked Crawley and Magnanti to create another new program to educate engineers to lead at the front end – in innovative product design and development.

Crawley says when he and Magnanti spoke with industry executives about another new program, they discovered that industry desperately needed engineers who could lead the engineering process. Specifically, they needed engineering leaders who understood marketing in order to know what to design, and they needed engineering leaders who could understand finance and figure out how to build these products profitably and sustainably. In short, they needed engineering leaders who could grasp the technical, managerial and social challenges in new product design and development, and lead others in their companies to innovate in new and more competitive ways.

"A BS in Engineering doesn’t guarantee that you can actually build a successful product and a degree in management isn’t a degree in engineering leadership," says Crawley. "Managers deliver numbers—volumes and profits—to their organizations. But engineers don’t want to deliver numbers; they want to create new products to serve humanity."

In 1995, the new SDM degree program (which focuses on mid-career professionals because, as Crawley says, it takes five to 10 years of on-the-job experience to learn how build something valuable) began. A testament to its success, says Crawley, is the fact that since that first 1996 pilot class of 12 students, the average class size has grown to 50+ and often consists of students who are CEOs, CTOs, and senior engineers – many of whom already have MBAs, Ph.D.’s or masters in engineering.

Crawley says, anecdotally, that a proof of the SDM concept and the need for engineers who can lead comes from the Department of Defense, the largest consumer of engineering talent in the world. Asked recently what its biggest human resources need was, DoD responded: System Engineers.

And thanks in large part to Edward Crawley, Magnanti, and SDM, industry now has them.