Some Observations From The A3 Report

After reading the short article titled, "Toyota's Secret: The A3 Report" the first thing I considered for this week's blog post was filling out my own A3 report for a problem I face at work. Then I thought for a second and realized most people in the class likely had the same idea. Instead I decided to provide some interesting observations I made while reading the article.

First observation i wanted to share was that the A3 Report is an iterative process similar to the lean startup method, with different steps of course. We'll see where the direction of this class goes over the next few weeks but it is becoming apparent that entrepreneurship is certainly an iterative process no matter which way you cut and slice it.

The most interesting takeaway however, was that the A3 Report was used to ensure a clear problem statement was considered based on an actual problem or need and not based on a potential solution. Too often, entrepreneurs come up with ideas for solutions and then try to retrofit them to a problem or need area. While this backwards entrepreneurship is plausible in many cases, it can easily lead one down the wrong path. If an entrepreneur already has a solution in mind, it is very possible their problem statement will be tainted and skewed to fit their solution. At this point, the entrepreneur may be missing out a key stage in the development of the solution. If more time is spent considering the problem or need state, the entrepreneur may realize the solution can be tweaked in a manner that better addresses the actual problem or need.

Seven Sources of Innovation

I've heard of Peter Drucker's seven sources of innovation many times, but never spent much time really thinking about them. I did a little web searching on Peter Drucker and the seven sources for background and wanted to comment on my thoughts and observations. Although it is pretty evident that you know the seven sources if you are reading this post, I included them below for reference.

1. The Unexpected
2. Incongruities
3. Process Needs
4. Industry and Market Structure
5. Demographics
6. Changes in Perception
7. New Knowledge

When I think of "The Unexpected" as a source of innovation, the first and likely most obvious example that comes to mind is the 3M post-it note story. For those who are unfamiliar, a chemist at 3M was tasked with developing a super-adhesive when he accidentally created the adhesive used in the ever so popular post-it notes. The rest is history. 

The idea of "Incongruities" sort of leaves me seeking answers. It is interesting to think that new ideas for products or services can come from disagreements or opposing views; however, I am having trouble thinking of examples or applications of this source. 

"Process Needs" to me seems like it would be the most common source of innovation. The idea is simple: There is a need to improve a process, develop a solution to meet the need. The entire Industrial Revolution centers around the idea of "Process Needs" as a source of innovation.

While the iPod can likely fit as an example to a few of the sources, it was the first example that came to mind when I thought of "Industry and market Structure." The music industry was shifting drastically with the advent of digital music sharing and peer to peer programs such as the late Napster. Apple found a way to capitalize on the shifting  music industry and created what was arguably the biggest breakthrough in the history their company. Without the iPod, you don't get the iPhone.

"Demographics" was the most interesting of the seven sources for me. I considered many examples but the one that stuck out the most was the rap music industry. Over the last few decades, many rap artists have become entrepreneurs in their own right. Many used their own name as a brand in clothing, headphones, food and drink products, etc. These entrepreneurs were capitalizing on the lifestyles of their urban fan bases.

"Changes in Perception" was another interesting source to me. While certainly not "high-tech", a good example is when retro fashion trends become popular again. Smart companies take advantage of ever changing tastes in fashion and begin to develop clothing that suits the new perception of what may have been otherwise considered unfashionable just years ago.

Finally, "New Knowledge" is in my opinion right at the top of the list with "Process Needs" in terms of commonality. When I think of this source, the first thing that comes to mind is Moore's Law. As technology continue to advance at an exponential rate, the ability to develop innovative technology will also continue to advance.

Google SWOT Analysis

Using the SWOT analysis matrix from the lecture slides, I performed the below analysis on Google. In completing this analysis, I tried to view the company as a whole from a reasonably high level.

One part that I really struggled with was deciding whether or not social media was an opportunity or a threat. I am very bearish on Google+ and no not expect Google to ever gain a market share in social media. However, the opportunity is techincally there. The reason I considered it may be a threat is that companies like Facebook are taking online advertising dollars away from Google. I could be swayed either way on this and hope my group members can provide some input.