The Renaissance Innovator

Thoughts, examples and updates on the Renaissance Innovation Method

Posts by Serguei Netessine

Why Apple Has to Manufacture in China

Posted on October 2, 2012

       Apple gets a lot of stick about manufacturing in China, and the issue came up again recently with the release of the iPhone 5. A recent article on the “Cult of Mac” contrasts Apple to Timbuk2, a US producer of traveler and messenger bags, that proudly locates most of its of its manufacturing in San Francisco, one of the most expensive places on earth. The workers in the factory are neither overworked nor are they underpaid, yet Timbuk2 is not struggling financially unlike many other US-based manufacturers. This begs the question: can’t Apple do the same and move jobs back from China?  We covered this issue in a recent post on HBR network.

Categories: Examples

Making car manufacturing sane: Business Model Innovation at Volkswagen

Posted on September 13, 2012

         After a brief hiatus due to vacations and travel over summer, the Renaissance Innovator blog is back!  While I was catching up on the stack of journals which accumulated over summer, a Fortune article about Volkswagen which describes transformation of the company from a local German producer to a global phenomenon with over €160B in sales caught my eye.  Volkswagen has quietly passed General Motors and Toyota last year to become the largest automotive maker in the world. So what is its secret?

Categories: Examples

The Darwinian Workplace in the WinnerS-take-all Organizations

Posted on May 3, 2012

The latest issue of Harvard Business Review features an article “The Darwinian Workplace” on promoting healthy competition in the workplace that I co-authored.  The key message of the article is based on several research projects with highly innovative technology companies that implemented tournaments among its workers to increase worker productivity and, at the same time, to increase firm’s profitability. Competition in high-end jobs in industries ranging from movie making to professional athletes to politics is nothing new but can the same principles be applied in industries as mundane as retail, call centers and restaurants, which usually employ minimal-wage workers, with minimal motivation and incentives to work hard?  Labor costs in these industries typically represent the largest operating expense and the number of people employed…

Categories: Examples, Experiences

How to Innovate for a Greener World (and Make Money)

Posted on April 8, 2012

In the minds of both consumers and managers going green is typically thought as being associated with an additional expense.  We see this in food stores, for instance, where organic products cost more.  Despite this general perception, there exists a simple approach for just about any organization or household to become more sustainable and make more money in the process.  The miracle solution  lies in Energy Efficiency projects. For instance, replacing old incandescent and halogen light bulbs with new energy efficient compact flourscent bulbs, installing additional insulation, motion-activated light switches, replacing old-leaky windows, buying energy-efficient heaters, are all known to lower carbon footprint while dramatically lowering energy bills!  In fact, Energy efficiency projects are the easiest and the fastest way to reduce greenhouse emissions,…

Categories: Examples

Innovating Presidential Elections: What Can one Learn from the Russian Experience?

Posted on March 11, 2012

Recent presidential elections in Russia have drawn worldwide attention over the last few months.  There was, however, one aspect of elections which did not receive as much coverage in the western press (at least in my opinion).  Of course, elections have been held the world over, in pretty much the same way for many decades. But for this Russian election, the  authorities implemented a very interesting and very significant, in my view, business model innovation.  What is the key issue in conducting elections in a country like Russia?  It is, of course, the doubt in public minds whether elections will be fair.  It is relatively easy to seed disbelief in the minds of the public: after all, it is bodies controlled by the current…

Categories: Examples

What is the “best” way to innovate?

Posted on March 4, 2012

MIT Sloan Management Review just came out with the latest 2012 picks for the world’s most innovative companies. This is a great list which includes 50 very interesting companies (mostly young) in a number of industries. While I enjoyed reading about these innovative companies, I could not help but be once again disappointed with the exclusive focus on product and technology innovators on the list and the lack of Business Model Innovators. Why?  I think first and foremost, it is very easy to “see” new products and technologies: when one sees a new iPhone or iPad it is quite easy to tell that this is a new product.  On the other hand, new Business Models can be operated by companies for many years before…

Categories: Examples, Theory

Making Cars Electric, One Country at a Time

Posted on February 25, 2012

Not that long ago, I talked about one of the most interesting startups I know of, an Israeli company called Better Place, which has the promise to accomplish what 170 years of technology innovation failed to achieve. What I am talking about is the elusive dream of electric vehicles and the constant struggle of word’s best scientists to combat two basic issues with electric vehicles: the range anxiety and the high cost of batteries.  Better Place has recognized that, where technology has failed to improve the world, a different kind of innovation is needed: a business model innovation which uses the same battery technology but fundamentally changes allocation of risks between the company and the customer, a true example of Renaissance Innovation.  There were…

Categories: Examples, Videos

Is there such thing as fair price?

Posted on January 31, 2012

  Among Renaissance Innovations that dramatically changed airline industries around the world is dynamic pricing.  Now we take for granted that a person sitting next to you on the plane might have paid a fraction of what you paid.  However, it was not always this way.  Only about 30 years ago, for instance, US airline industry was heavily regulated with almost no price fluctuations.  But then the industry was deregulated and the airlines became free to set any prices they like. Like it was the case with some other innovations, dynamic pricing was born out of necessity: major legacy airlines were under intense pressure to compete with low-cost carriers which were undercutting them on prices. However, the casualty of that battle was not the…

Categories: Examples

To focus or not to focus (on patients, that is)?

Posted on January 4, 2012

As I am preparing for a teaching session in a couple of weeks in Moscow, I realized that we had not written about one of the older but even more relevant today innovation.  Some months back I blogged about a very cool startup Diapers.com which was founded by my former students in 2005 and which was recently acquired by Amazon.com. The company created an impressive business model by focusing on a very narrow segment of the market and by eliminating lots of risks/uncertainties associated with diversification.  As it turns out, the same concept can and has been applied to services, and not just any services: to healthcare.  Given all the recent buzz about high costs and poor quality of healthcare in the USA, it…

Categories: Examples

Retail innovations for the 21st century

Posted on December 4, 2011

A few related things happened this week which all prompted me to write about retail innovations.  First, a startup company I am advising, Objective Logistics, has received a round of funding from Google Ventures and Atlas Ventures.  I had written about what they do in this blog already and, needless to say, securing funding from these widely respected venture capital firms is exciting.  Of course, the media picked up the news and you can read details at ReadWriteWeb,  Mashable, Boston Herald, Xconomy and many others. Second, I gave a long interview to the Economist where I talked about some retail innovations out there.  Of course, what actually appeared in the journal was just one sentence so I figured I can expand upon what I…

Categories: Experiences, Process