Apek's Profile

*on its smartphone

Brave post 🙂

I agree with the diagnosis, but not the prognosis.

Yes, whilst the Kodak operating model did have the capability to innovate, it failed to utilise it correctly. As you mentioned, in 1975 Kodak engineer Steve Sasson created the first digital camera. (In fact, until the patent expired in the United States in 2007, the digital camera patent earned billions for Kodak, since other manufactors paid for the rights to use it!) [1] And I agree that the lesson is that when comes to technology, cannablise yourself before someone else does. Take the risk of innovation.

However, in terms of next steps, I do think they are doing the right thing! I would be incredibly interested to hear thoughts on it’s smartphone launch last month:
http://www.kodak.com/consumer/products/ektra/default.htm
Rather than be complacent again and think of themselves as a “a niche chemistry business” in order to survive, they have recognised:
– they have significant brand awareness and power in the camera industry which they can leverage
– smartphone cameras are reducing the need for digital cameras (I got several curious stares during class photo day when I brought mine in…)
As a result, they are taking a risk, and trying to get ahead of Canon, Nikon and Olympus and more! Early reviews are encouraging, but only time will tell whether history is about to repeat itself. [2]

[1] http://lens.blogs.nytimes.com/2015/08/12/kodaks-first-digital-moment/
[2] http://www.mobilechoiceuk.com/phone-review/Kodak/Ektra/1154

A really well-written article!

In a typical for-profit organisation, the effects of innovation are usually easy to measure: the change in profit (or revenue/market share/alternative KPI).

However, with non-profit and governmental organisations, there is a tendency to have multiple metrics, or even unquantifiable ones. This can lead to a lack of focus on how and whether technology will actually improve them. You highlight the key problem that such an operating model creates: the pitfall of investing in “IT for IT’s sake” .

Whilst Boston seems an excellent example of addressing this problem in a thoughtful way, I think about my experience entering Boston, through TSA, which provides a wonderful counterexample as an organisation. In particular:
http://nypost.com/2016/04/06/this-1-4m-ipad-app-might-be-worst-case-of-government-waste-ever/

Some food for thought on how to ensure such operating models funnel innovation in the right way!

Great article Shiv! Really interesting how technology creates an opportunity to improve a part of the business model (providing service), to the point that it becomes a competitive advantage.

I had one concern about the suggestion that Otis should ‘uber-ify’ the technician market in order to optimise supply.

As we noted during the Uber case in class, one problem is that Uber drivers are able to sign up for Lyft/Ola/competitors. They are not tied to a single company. If Otis were to go down this route and change their technicians from employees to contractors, does that not lower barriers to entry for competitors?

In this specific case, given the highly skilled nature of the elevator technician ($39/hour median pay as you noted), is it not wiser to keep them on the payroll and give them a significant switching cost to leaving Otis?

Nevertheless, I believe Otis can still use the uber concept by matching supply and demand for unscheduled calls. However, this should be controlled centrally within the company, and not decentralised with contracted technicians.

A great post, and a very interesting use of IoT to optimise operations! I just wonder about cost concerns, especially considering the lack of implementation in the cold chain channel.

I would think that the price of sensors, and the price of creating portable powering systems, is probably the key barrier to your suggestion being implemented.

However, I would argue, that it is just a matter of time before such solutions become economically viable – as the cost of sensors falls dramatically – the average price of iot sensors is projected to fall from $0.60 in 2014 to $0.38 in 2020. [1]

[1] https://www.theatlas.com/charts/BJsmCFAl

Fascinating article about the transferability of R&D! I would have never thought that the technology of film could be used in cosmetics and medical diagnosis .

I believe this post raises the question of what a company should do when its industry faces technological disruption, and its original business model becomes irrelevant.

The above post seems to be an argument for the company transforming its business model, but I would push back on the wisdom of this.

‘Fujifilm’ has significant brand value within its industry of film. Would it not have been of a value add to adapt its business model within the same industry? This is a much more difficult feat as it probably demands greater transformation of its operating model, but is that not the goal you aim for if you want to thrive and not just “survive” as footnote [8] states?

Thank you for all your comments. A few replies:

@Roanna – With regards to your question on why stop at targetting 3.14, I think there is a limit. I would envision that they run up against the problem of diminishing returns to innovation – where each additional unit of effort has a diminishing effect on water reduction.

@SLHarland & @Roanna – Very interesting points on the additional steps that AB InBev could take and is not taking, like looking at shipping and packaging. Your comments got me thinking about their actual commitment to reducing emissions, and got me rethinking the optimistic tone above! I’m looking at their customer promise a lot more critically now.
I think I would now edit my argument to say that the above example was a huge success because their incentive to reduce water usage from an environmental standpoint, was aligned with the incentive to make their supply chain more reliable and their costs cheaper. Perhaps this is the greater lesson for sustainability planning – to try to align incentives as much as possible.

@Alucido – Interestingly, they are experimenting with different strains. I think this is where GMOs start playing a crucial role

@x96791 This is a key problem. I believe that because exact level of risk due to climate change is difficult to quantify, it is easy for the public sector to not face the issue and resolve it. This maks it difficult to affect ‘meaningful and rapid change’.

Thanks for your post – it was insightful to see the ways in which UPS optimising for business performance also translates to better managing carbon emissions.

I agree with your assesment, and would suggest applying the concept of ‘economies of scale’ to further the argument.

In a report to the Carbon Development Project, UPS submitted a useful analogy to think about their contribution to greenhouse emissions:
“A useful metaphor is public transit. A subway system costs more to build than a car, and it generates more greenhouse gas emissions than a car. But it can carry the drivers and passengers from thousands of cars, so the travel cost and carbon footprint for those riders’ drops dramatically compared to driving independently. Shifting people from cars to public transit delivers higher resource efficiency and fewer emissions per person per trip. The UPS network provides the same kinds of benefits. We aggregate millions of packages every business day and deliver them through a single integrated network that is optimized for packages, the same way a public transit system is optimized for people. The biggest difference is that our system is optimized not for just a city or a region, but for the whole world. By aggregating the shipping of more than 4.7 billion shipments in our global network in 2015, we helped minimize the fuel and emissions footprint of every one.” [1]

[1] Carbon Development Project, “Climate Change 2016 Information Request, UPS”,

Hi Nico, thank you for your post. Your footnotes caught my eye.

I think you hit the nail on the head with the idea of “betting on regulation”. There is a distinct time window between a mature industry being told regulation is coming, and the industry learning to adapt & thereby retaining its competitive edge.

I would argue that climate change regulation can be interpreted as a opportunity for new entrants to capitalise on across many industries.

I find it very interesting how distinctive the sustainable material that Stella McCartney produces is.

It gives rise to the question – when creating a new operations system that takes sustaibility into account, do you create a product that is significantly differentiated, or create one that closely resembles the existing products in the market?

I think Stella McCartney is a great argument for the former, whilst too companies like Kering and Gucci are trying the latter.

An interesting read!

I think you highlight a key issue in operations planning, which is the role of reliability of future government action: “since government does not always respond promptly, it may take several years which can be a huge risk for this project.”

When it comes to sustainability, it feels like the typical response of a government seems to be consider incentives and regulations i.e. carrots and sticks in the same way they do other issues. I think there is not enough of a push for simply making decisions swifter and expectations more reliable to address the urgency of the probem. The benefit to an organisation’s operations team seems clear: it is easier to choose to invest in a project given certainty, while they may be forced into paralysis due to uncertainty.

What comes to mind here is the role of the organisational structure.
Is part of the problem that PANYJ has created a separate Climate Change Adaptation Task Force that only has the power to “recommend”? Would it work better if they integrate climate change goals into the KPIs of existing leaders who already possess the authority to act?

A very clear and concise post! It was a pleasure to read.

Following on from our discussion in the last classes, I wonder what fueled their incentive to implement the changes that they have, like the investment in the R&D for the hydroelectric plant. Was it a genuine concern for the environment, a view to the long-term, or a more of a marketing play? Would love to hear thoughts on this.