Orlando, Florida August 2-5, 2005

http://www.afams.af.mil/conn_conf/

Simulation Innovation II:

A Three Phase Model of Innovation

Roger Smith
SPARTA Inc.
rsmith@sparta.com
407.380.0076
© Copyright 2005, Roger Smith
 Simulation Innovation

ovation & New Technology Displace Established Technology & Practition

1947 1985 2005

 Two Models of Innovation
 Disruptive  3-Phase Innovation:
Innovation:
Established companies
lose their market share
to innovative new
entrants in the field.
 The Innovator’s
Dilemma, Clayton
Christensen (Harvard)
The rate of major
innovation in products
and services follows a
3-Phase pattern over
time.
 Mastering the
Dynamics of
Innovation, James
Utterback (MIT)
 Utterback’s 3-Phases of
Innovation
Explosion of Standardization Contraction of
different of design, competitors,
designs, Era of Emergence of Era of
radical product process incremental
innovation innovation innovation

Product Innovation

Process Innovation

Rate of
Major
Innovation

Dominant Design
Lowest Cost

Fluid Phase Transitional Specific Phase

Phase

time
(Utterback, 1996)
 Simulation Innovation Examples
Explosion of Standardization Contraction of
different of design, competitors,
designs, Era of Emergence of Era of
radical product process incremental
innovation innovation innovation

Product Innovation

SIMNET Process Innovation

SAF’s
Rate of CBS CCTT IEEE 1278 (DIS)
Major DIS IEEE 1516 (HLA)
ModSAF Sim Center &
Innovation
CTIA Exercise Support
ALSP
TENA

Dominant Design
LVC System Mods
DIS 2.0.4
ALSP
Fluid Phase Transitional Specific Phase
Phase

time
(Utterback, 1996)
 Unsuccessful Path: Stay The
Course

Product Innovation

Rate of
Major
Innovation

Fluid Phase Transitional Specific Phase

Phase

time
 Successful Path: Jump Industries
Cellphone,
Handheld,
Web-based

Expertise
Expertise Computer Games

Expertise

Expertise
Expertise Computer Simulation

Expertise

Expertise
Expertise
Board Wargaming
Expertise

Fluid: Transitional Specific:

R&D, New: Mass Services
Products Production
 Successful Path: Skate the Top
(1) Open with (3) Push (4) Focus on
rapid and standards and low-cost
prolific build community products and
innovation around yours services

Product
Innovation
Process
Innovation

Rate of
Major Dominant
Lowest
Innovation Design
Cost
(2) Create and
own the
dominant
design

Fluid Phase Transitional Specific Phase

Phase

time
Every Organization Will Not
Survive

Skate the Top 5%

Jump Industries 10%

Stay the Course 85%

Recommendations

 Flexible
 Change the company to follow the market
 Fluid >> Transitional >> Specific

 Specialized
 Jump across domains to grow specific
expertise
 Retain your specialized expertise

 Immovable
 Stay the Course Until Extinction
 Most companies follow this path
References
 Utterback, J. (1996). Mastering the Dynamics
of Innovation. Harvard Business School Press.
 Christensen, C. (1997). The Innovator’s
Dilemma: When new technologies cause great
firms to fail. Harvard Business School Press.
 Christensen, C. & Raynor, M. (2003). The
Innovator’s Solution: Creating and sustaining
successful growth. Harvard Business School
Press.