Fall 2016 15.359/6.901

Innovation Engineering: Moving Ideas to Impact

CLASS OBJECTIVES

This class is designed as one of two required classes for the Undergraduate Minor in Entrepreneurship

and Innovation. With a focus on “innovation engineering” – the processes, knowledge and techniques

needed to take an opportunity from the earliest stages of idea conception through to impact in the

global economy – it is complementary to the Venture Engineering course. The class takes the

perspective of the Chief Technology Officer of an entrepreneurial start-up venture with a novel

technology-based innovation. We explore the challenges, tradeoffs and issues associated with moving a

solution to readiness (i.e. being ready for market adoption), including production readiness, as well as

an emphasis on the role of the team and other stakeholders (e.g. government regulators).

CLASS DESIGN

The course is designed to be interactive, practical and relevant. We will cover examples from a range of

different disciplines: software, hardware, the life sciences, materials science etc. Each class will include

a lecture, development of new tools and techniques, and practical application to specific cases and

examples. We will have numerous visitors from the local Boston innovation ecosystem who will share

their experiences in a way that complements the specific topics of the class. Many of our visitors will be

recent CTOs/CEOs of MIT spinouts, but also those with significant experience. The class will also have

three “fieldtrips” to locations in the Kendall Square innovation ecosystem.

CLASS TIME & LOCATION:

Time: Tuesday and Thursday: 9:00 – 10:30 AM (see below for specific dates)

Location: Building 1 Room 390 (see below for location of the three Kendall Sq. field trips)

FACULTY:

Prof Vladimir Bulovic (EECS): bulovic@mit.edu

Prof Fiona Murray (Sloan): fmurray@mit.edu

TAs Shani Rokman (Sloan): shanirok@mit.edu

TA Vinnie Ramesh (EECS): vramesh@mit.edu

READINGS:

Course material will be made available through Stellar. Readings and study questions are outlined in the

back of this document.

GRADING:

Grades will be based on three elements: (i) Class attendance and evidence of well-prepared

participation (30%); (ii) A group assignment for each of the four “modules” of the class (40%); (iii) a final

(individual) assignment (30%).

ASSIGNMENTS:

Module Assignments

Each module will conclude with a group case exercise highlighting the key learning objectives of the

section. Groups will be given a set of background materials related to a real-world technology or

project, and will analyze the ‘readiness’ level of the solution using the frameworks from the module.

Responses will take the form of written responses and/or short presentations outlining their thinking

and conclusions from their perspective as the project CTO.

Final Assignment

The final assignment will be an individual exercise in which students analyze the Solution, Production,

Team, and Stakeholder Readiness of a novel technology. Students will have the choice of analyzing a

technology solution of their own, or a given technology/project area prepared by the course team.

CLASS SCHEDULE

DATE

CLASS TOPIC

Class 1

Thursday

September 8

INTRODUCTION TO THE CLASS

Lecture: Defining Innovation as a process from Idea to Impact; Readiness

Framework for innovation engineering – the concept of readiness; Iterative

Approach to Innovation Engineering.

Example: Automobiles, iPhone

Class 2

Tuesday

September 13

COURSE FRAMEWORK

Lecture: Illustrating the four elements of Readiness - Solution, Production, Team &

Stakeholders – and how they innovate projects.

Case Study: Dean Kamen & the Segway

Class 3

Thursday

September 15

INNOVATION IN CONTEXT

Lecture: Policies & rules that shape “innovation engineering” – intellectual

property – patents and trade secrecy, non-competes etc.

Cases: The Telephone & the Oncomouse

Visitor: Chris Noble, MIT Technology Licensing Office

Class 4

Tuesday

September 20

INTRODUCING SOLUTION READINESS (stages 1-9)

Lecture: Solution Readiness & Uncertainty – defining functionality/components,

key assumptions, readiness levels, and levels/types of uncertainty for a solution in

its system context

Example: Solar power systems (the CTO perspective)

Class 5

Thursday

September 22

Solution Readiness

Lecture: Testing & Robustness – the case of Software

Example: Wellframe

Visitor: Vinny Ramesh

Class 6

Tuesday

September 27

Solution Readiness

Lecture: Testing & Evaluating - design of Experiments for reliability & robustness –

economics of experimentation – from the lab to the relevant setting

Example: Mars Lander

Visitor: MIT Hyperloop Team (Max Opgenoord & team)

Class 7

Thursday

September 29

Solution Readiness

Lecture: Solutions & your customers – iteration and adaptation of your solution as

you move through readiness stages.

Visitor: Professor Dina Katabi

Case Study: Heartport

Class 8

Tuesday

October 4

Solution Readiness

Lecture: Evaluating your Solution (its functionality and readiness) in the light of

competitor and customer Dynamics

Case Study: Iridium Satellite Phone

Class 9

Thursday

October 6

FIELD TRIP – SBIR Conference

Meet at KRESGE AUDITORIUM | W16, 48 MASSACHUSETTS AVE at 8:30am if

possible (or 9am just outside the Auditorium). Agenda is:

9:00 – 9:30 AM: SBIR: Seeding America’s Future Innovations John Williams and program managers from NSF, NIH, DOD and DOE 9:30 – 10:30 AM: Innovation X-Ignite G. Nagesh Rao- Chief Technologist at SBA-OII (Moderator), Gia Schneider- CEO of Natel

Energy, Greg Tudryn- Research Director at Ecovative Design, Lisa Marceau- Director & VP at

New England Research Institute.

October 11

NO CLASS– COLUMBUS DAY WEEKEND

Class 10 Thursday October 13

INTRODUCING PRODUCTION READINESS (stages 1-9)

Lecture: Production Readiness, its stages, core choices and the economics of

scaling production x-sectors (biologics, software, mechanics, electronics etc.)

Example: Batteries

Class 11 Tuesday October 18 [Fiona @REAP]

Production Readiness

Lecture: Prototyping @ MIT and Beyond – how prototyping of different types can

support the development of production readiness. Moving from one to 10 and

beyond in the field.

Visitor: Scott Miller, Dragon Innovation

Class 12 Thursday October 20

Production Readiness

Lecture: Core decisions in production and scaling to move ideas to impact (from

10 to 1,000 and beyond). And mapping back into solution readiness to consider

Design for Manufacturing and Design for Robustness (software).

Example: iRobot

Visitor: Scott Miller, Dragon Innovation

Class 13 Tuesday October 25

FIELD TRIP – BEAVERWORKS, 300 Technology Square, Cambridge (meet at the

security desk at 8:45AM)

Discussion: Solution readiness development and evaluation for military solutions at

Lincoln and out into the field.

Example: Lincoln Labs

Visitors: Bob Shin & Bob Atkins (Lincoln Labs)

Class 14 Thursday October 27

Production Readiness

Lecture: Production Planning & Partnering – structured mathematical approach to

alternative production choices

Example: Bioprocessing

Class 15 Tuesday November 1

INTRODUCING TEAM READINESS Lecture: Founding team (& founding equity), roles in a start-up team, team expansion, team culture and changes as the team scales-up for readiness. Example: Ubiquitous Energy Visitor: Miles Barr, CEO Ubiquitous Energy

Class 16 Thursday November 3

Team Readiness Lecture: Team hiring - expansion and growth. Overcoming the challenges of bias and “group think”. What type of team do you hire, what are the skills that matter? Activity: Role play exercise PB Technologies

Class 17 Tuesday November 8

Team Readiness Lecture: Self-Readiness focused on Developing/Communicating Personal Leadership Style, Building a team with different skills and styles. Example: Self-Assessment Instrument Visitor: Dr. David Nino, Gordon Engineering Leadership Center

Class 18 Thursday November 10

Team Readiness Lecture: Decision-Making and team design choices – different human resource models for innovation teams & different organizational approaches Example: The Bakeoff (culinary science!)

Class 19 Tuesday November 15

Team Readiness Discussion: How do investors assess the team, and plan for team readiness during the scale-up of innovation Visitor: Stan Reiss, Venture Partner in Matrix Partners

Class 20 Thursday November 17

FIELD TRIP – Liquiglide Team Readiness Discussion: Building a team for solution and production readiness from university spinout to full-scale start-up.

Class 21 Tuesday November 22

INTRODUCING STAKEHOLDER READINESS Lecture: Who are your key stakeholders as you move an innovation from idea to impact? What are their interests? How are you going to manage them? Example: Edison versus Tesla as innovators & diplomats

November 24

NO CLASS – THANKSGIVING!

Class 22 Tuesday November 29

Stakeholder Readiness Lecture: Stakeholder mapping, engagement & interaction – decision-makers versus influencers Example: Energy Efficiency Software Visitor: Laila Partridge, CEO, WegoWise (SaaS business in energy efficiency)

Class 23 Thursday December 1

Stakeholder Readiness Lecture: Stakeholder mapping for impact-oriented solutions, risk assessment from other stakeholders, role of not-for-profits and governments in solution adoption Case: Terrapower

Class 24 Tuesday December 6

Stakeholder Readiness Lecture: Regulator analysis, engagement & interaction with novel products Example: XXXX Visitors: Dr. Natalya Brinker (CEO) & Louis Perna (Lead Engineer), Accion

Class 25 Thursday December 8

CONCLUDING LECTURE

CLASS READINGS

DATE CLASS READINGS

Class 1

Thursday

September 8

INTRODUCTION TO THE CLASS

Learning Objectives:

Understand the expectations for the course and assignment structure.

Provide a working definition of the innovation process and the stages through

which novel concepts move from idea to impact.

Outline the basic concept of “readiness” as it pertains to innovation and its

usefulness in structuring the innovation process.

Recognize that the innovation process is an iterative one, requiring flexibility

and adaptation.

Introduce elements of the class through the use of a case study.

Class 2

Tuesday

September 13

COURSE FRAMEWORK

Reading: Gavin Rivlin. The Segway’s Breakdown. Wired Magazine 2011. Reading: Heilemann, John. Machine of Dreams. Vanity Fair May 2002 . Reading: DoD Technology Readiness Assessment Guidance (2011). Read section 2.5. Learning Objectives:

Understand the ways in which you will learn in this class: from case studies and

exercises to your own experiences.

Demonstrate the application of the readiness framework to a specific example.

Appreciate the four strands of readiness: solution, production, team and

stakeholders.

Class 3

Thursday

September 15

INNOVATION IN CONTEXT

Reading: Leder and Stewart. Non-human transgenic animals. Patent 4736866.

Reading: Petra Moser, Why Don’t Inventors Patent. NBER Working paper 13294.

Reading: Patents in Action: The Origins of the Telephone Patent.

Learning Objectives:

Summarize the similarities and differences between copyrights, patents, and

trade secrets.

Understand what a patent is and how to read the key sections of a filing.

Define the four requirements necessary for an invention to be patentable and

process/estimated costs of filing.

Articulate strategies for defending and/or challenging patents.

Understand the other key policies/rules that shape the innovation process

from idea to impact.

Class 4

Tuesday

September 20

INTRODUCING SOLUTION READINESS (stages 1-9)

Reading: Michael Schrage, The Innovators Hypothesis: Chapter 6 (Investing in

Experiments) and Chapter 8 (Exploring and Exploiting Experimentation)

Reading: DoE Technology Readiness Assessment (2013). Read section 2.2.

Learning Objectives:

Prepare a functional assessment mapping the underlying capabilities of a given

technology.

Recognize that attributes will differ in relative importance within varied

application contexts.

Understand that a choice of application context will be determined by a

combination of market need, feasibility, potential market size, and interest of

the team.

Understand that improvement of a technology along one dimension may

require tradeoffs along another.

Class 5

Thursday

September 22

Solution Readiness

Reading: Frederick Brooks. The Mythical Man-Month. Chapters 11-13 Reading: Barry O’Riley, How to Implement Hypothesis-Driven Development (in

Software). Thoughtworks Blog. https://www.thoughtworks.com/insights/blog/how-

implement-hypothesis-driven-development

Learning Objectives:

Evaluate new software designs to understand points of differentiation relative

to existing solutions

Articulate the stages of completion or robustness of a novel software concept.

Understand the foundational approaches to testing software solutions.

Understand how to effectively break down a software development and

testing process

Class 6

Tuesday

September 27

Solution Readiness

Reading: http://www.spacex.com/hyperloop and http://fortune.com/2016/01/31/mit-

wins-hyperloop-competition-and-elon-musk-drops-in/

Reading: Ellis, Craver. Technology Program Management Model (Space and Missile

Defense Center). 2006. http://www.dtic.mil/ndia/2006systems/Thursday/crave.pdf

Learning Objectives:

Learn how to breakdown a complex solution into a series of component

elements for testing and evaluation

Articulate the stages of completion or robustness of a novel solution concept

(and its parts) through to the highest readiness stages

Understand how to define the development and testing process for a complex

solution

Determine the appropriate level of performance or tolerance for a specific

component/sub-system/system

Evaluate different approaches and cost tradeoffs of alternative testing

modalities in a resource-constrained environment

Class 7 Solution Readiness

Thursday

September 29

Case: Gary Pisano, Heartport Inc. Harvard Business School Case.

Reading: Duncan Simester, A step-by-step Guide to Smart Business Experiments,

Harvard Business Review

Learning Objectives:

Understand how new information from customers, competition and broader

economic forces may change the value of your solution

Learn modes to more effectively gather information and incorporate it into

your solution readiness activities

Techniques to link iteration in your solution to a stage gate process

Recognize the implications slow versus fast information shocks to your solution

readiness

Class 8

Tuesday

October 4

Solution Readiness

Case: Alan MacCormack, Kerry Herman, The Rise and Fall of Iridium. Harvard Business School Case 9-601-040.

Learning Objectives:

Practice learning objectives from the “solution readiness” module in a specific

context

Apply the learning objectives to a specific case in a structured and analytic

fashion

Understand the ways in which other aspects of readiness e.g. team and

stakeholder, impact the effectiveness of solution readiness approaches

Class 9

Thursday

October 6

FIELD TRIP – Lincoln Labs’ Beaverworks

Reading: William Ward, Franklin Lloyd. Thirty Years of Space Communications Research

and Development at Lincoln Labs. http://history.nasa.gov/SP-4217/ch8.htm

Learning Objectives:

Understand unique opportunities and challenges to innovation within a

government institution.

Understand the challenges for ensuring readiness in a defense context while

also ensuring that innovations are adopted

October 11

NO CLASS– COLUMBUS DAY WEEKEND

Class 10 Thursday October 13

INTRODUCING PRODUCTION READINESS (stages 1-9)

Re-Read: Frederick Brooks. The Mythical Man-Month. Chapters 11-13

Learning Objectives:

Define the stages of production readiness for a particular solution

Appreciate the different modalities of production and moving to production

readiness across different sectors/product types

Outline the role of economic analysis in the determination of different

approaches to production

Understand similarities and differences in the ‘production’ readiness

economics and timelines of software solutions.

Class 11 Tuesday October 18

Production Readiness

Reading: Karl Ulrich. Steve Eppinger. Product Design and Development. Chapter 14:

Prototyping.

Learning Objectives:

Understand the role of prototyping in production readiness

Determine the nature of prototypes that will be useful in moving a solution

through production readiness stages

Define the challenges associated with moving from making a single (prototype)

to making 10, 100 and then 1000 units

Class 12 Thursday October 20

Production Readiness

Reading: http://www.engineeringexchange.com/profiles/blogs/11-principles-and-

guidelines-in-design-for-manufacturing-and

Reading: https://blog.dragoninnovation.com/2015/10/21/factory-selection-oem-vs-

odm/

Reading: https://blog.dragoninnovation.com/2015/10/30/managing-your-

manufacturing-middleman-model-vs-manufacturing-partner/

Learning Objectives:

Determine key design and production decisions that must be made to scale a

solution.

Understand the range of distinctive production choices that are available (Self

vs. Third Party Options, OEM vs. ODM, Geographic Choice)

Assess the design for manufacturability of a solution and the implications for

production choices.

Class 13 Tuesday October 25

Production Readiness

Reading: https://blog.dragoninnovation.com/2016/05/26/understanding-gross-margin-hardware/ Learning Objectives:

Understand foundational principles of costing solutions, and their impacts on

making long-term choices for scale.

Recognize the key elements of a Bill of Materials.

Map the Bill of Materials to key production decisions and economics

Understand unit-costing principles of software solutions.

Class 14 Thursday October 27

Production Readiness

Reading: Out-Sourcing and its choices Learning Objectives:

Understand basic concepts of Net Present Value for an organization.

Practice an economic evaluation of production choices in a spreadsheet using a Net Present Value approach

Recognize the role of decision-trees in production readiness

Apply these concepts to the case of bioprocessing

Class 15 Tuesday November 1

FIELD TRIP - 24M Kendall Square Learning Objectives:

Apply learnings in the production readiness module to a real-world example

Apply learnings to the context of a highly capital intensive innovation in the field of materials

Understand a real-world analysis that resulted in a geographic decision to produce at scale in Boston.

Class 16 Thursday November 3

INTRODUCING TEAM READINESS Case: Stefan Thomke, IDEO, Harvard Business School Case Reading: Stefan Thomke, Experimentation Matters. Chapter 5 (Experiment Early and Often), Chapter 6 (Organizing for Experimentation) Learning Objectives:

Describe the core functions of a team in the early stages of solution readiness

Map early-stage readiness activities to a “stage-gate” process

Understand the organizational approaches in which the early stages in solution readiness can be managed including different roles and responsibilities

Class 17 Tuesday November 8

Team Readiness Reading: Ancona, In Praise of the Incomplete Leader. Learning Objectives:

Articulate the particular roles that technical leaders play in an organization, especially a start-up

Understand that different leadership styles exist, with different individuals having distinctive areas of strength/weakness

Recognize your own leadership style – its strengths and its weaknesses and how they can be overcome or expanded

Class 18 Thursday November 10

Team Readiness Reading: Malcolm Gladwell, 2005, The Bake Off: Project Delta Aims to Create the Perfect Cookie, The New Yorker. http://gladwell.com/the-bakeoff/ Reading: Frederick Brooks. The Mythical Man-Month. Chapters 2-4 Learning Objectives:

Describe the distinctive ways in which technical teams can be structured

Understand the different decision-making approaches and styles

Recognize the trade-offs with different decision-making models and approaches

Class 19 Tuesday November 15

Team Readiness Reading: Zuckerman & Reagans, Making the Team, Administrative Science Quarterly Reading: (balanced teams and effectiveness) Reading: Mary Diane Burton, J N Baron, M T Hannan. 1996. The Road Taken: The Origins and Evolution of Employment Systems in High-Tech Firms, Industrial and Corporate Change.

Learning Objectives:

Map from a set of particular technical objectives and challenges to a proposed team composition

Determine the most effective ordering for team hiring based on a range of considerations e.g. budget, timeline, culture etc.

Understand the role of bias in hiring and other people/team oriented decisions

Recognize the importance of a team with multiple skills, networks and outward facing elements

Class 20 Thursday November 17

FIELD TRIP – Matrix Partners, Kendall Square Reading: Brooks, Murray et al. Investors Prefer Pitches by Attractive Men, Proceedings of the National Academy of Sciences Learning Objectives:

Understand the ways in which investors assess the desirability of a particular innovation opportunity

Describe the approach that investors take to assessing the readiness of a team

Evaluate the match between a team and the particular solution i.e. the balance between people and ideas in investment decisions

Class 21 Tuesday November 22

INTRODUCING STAKEHOLDER READINESS Reading: Hargadorn & Douglas, 2001, When Innovations Meet Institutions: Edison and the Design of Electric Light. Administrative Science Quarterly. Video: Edison versus Tesla (available at http://www.energy.gov/articles/video-who-was-better-inventor-tesla-or-edison ) Learning Objectives:

Understand the role of key stakeholders in determining whether your solution can be effectively adopted in your chosen context

Map out different stakeholders for your solution

Map out the various interests (positive and negative) of each of the stakeholders in your opportunity/solution

Evaluate the different approaches to stakeholder readiness that can be chosen

November 24

NO CLASS – THANKSGIVING!

Class 22 Tuesday November 29

Stakeholder Readiness Reading: Influence Maps http://www.dtic.mil/ndia/2009systemengr/8969ThursdayTrack6Smith.pdf Reading: Visualizing and Mapping Stakeholder Influence. http://www.mosaicprojects.com.au/PDF_Papers/P044_Visualising_mapping.pdf Learning Objectives:

Understand the role of stakeholder readiness in an opportunity with significant government engagement and influence

Identify additional industries (beyond energy) where similar levels of government engagement and influence would likely be present.

Apply stakeholder readiness concepts to a specific entrepreneurial context

Understand role of stakeholder readiness in a software as a service businesses

Recognize how stakeholder issues can impact solution design and readiness

Class 23 Thursday December 1

Stakeholder Readiness Case: William Sahlman, TerraPower, Harvard Business School Case Study Reading: Stakeholder Mapping. BSR. http://gsvc.org/wp-content/uploads/2014/11/Stakeholders-Identification-and-Mapping.pdf Learning Objectives:

Apply stakeholder readiness concepts to opportunities with a significant social as well as economic impact

Map key stakeholders in the not-for-profit (or impact-oriented) context

Recognize specific issues and challenges of the impact setting Class 24 Tuesday December 6

Stakeholder Readiness Reading: Amazon Adds that Robotics Touch, Wall Street Journal. http://www.wsj.com/articles/SB10001424052702304724404577291903244796214 Reading: Kiva Systems Founder Rick Mountz on Starting Up. http://www.ibtimes.com/kiva-systems-founder-mick-mountz-starting-problem-solving-innovating-hardware-scene-949136 Learning Objectives:

Apply principles of stakeholder readiness to hardware businesses

Understand approaches to stakeholder engagement for novel solutions that challenge existing stakeholder approaches and regulations

Class 25 Thursday December 8

CONCLUDING LECTURE