Transcript MIS5102: Process Improvement and Innovation Systems Thinking

MIS5102:
Process Improvement and Innovation
Systems Thinking
What do these have in common?
Disruptive Innovation Theory
Low-end disruption
• Low-end
– Quality increasing
faster than need
– Opportunity for lowcost entrant
• New-market
http://en.wikipedia.org/wiki/Disruptive_technology
– Fits an emerging
segment with an
unmet need
So how do companies innovate?
Your existing
position
What’s going
on in the
environment
What to do
New products for high-margin customers
Cheap alternatives to existing products
New products for “nonconsumers”
“Signals of Change”
Undershot Customers
Overshot Customers
• When companies are filling
up-market need
• i.e., new data analytics
software to handle “big data,”
gaming PCs
• When companies are filling
down-market need
• i.e., Netbooks, Kindle Fire
Nonconsumers
Nonmarket Contexts
• When new markets are being
created
• i.e., Facebook, iPad
• Barriers to innovation are
changing
• i.e., Government regulation
Source: Anthony, S., and Christensen, C. (2005). How You Can Benefit from
Predicting Change. Financial Executive, 21(2), pp. 36-41
Systems Thinking
• Considering the system
as a collection of
integrated processes
• Synthesize and optimize
Process Thinking
• Considering the system
as a collection of
independent processes
• Decompose and optimize
Thinking about the system as a whole
• Consider the “boundaries” of each component
– What other components affect this component?
– What other components is this affected by?
R = reinforcing
B = balancing
+ = increases
- = decreases
http://blog.metasd.com/category/tools/visualization/page/2/
A stock-flow diagram
Both diagrams
show essentially
the same thing…
…cause-andeffect
relationships
http://blog.metasd.com/category/tools/visualization/page/2/
Connecting Systems Thinking to
Disruptive Innovation
The Kindle as a disruptive innovation…
What processes did the
Kindle affect?
What processes affect the
Kindle?
What were the secondary
effects on society?
Connecting Systems Thinking to
Business Processes
What processes
are inputs?
Grocery
Store
Checkout
How would adoption of selfserve checkout change the
system dynamics?
What processes
are outputs?