Innovation in the forest products industry - “Unimaginable results”
-----------------
NEW YORK, Feb. 10, 2011 (RISI) - Innovation is a strange and tricky thing. Entire fields of human endeavors have moved along at a snail's pace for decades, or even centuries, only to speed ahead into new, uncharted territory with a new technology or technique that changes everything. That is the definition of innovation, isn't it - something that changes everything. And that's the funny thing about innovation. It's nearly impossible to predict what that something will be or when it will get here.
As a biochemistry grad student, I knew briefly Dr. Lars G. Ljungdahl, one of the early pioneers in discovering some of the microorganisms used to convert biomass to biofuel. Back during the 1970s oil crisis, Dr. Ljungdahl was looking at bacteria that live at very high temperatures, called thermophiles. And he began to wonder if there were some of these thermophiles that might help create an alternative fuel. As he explains in the introductory chapter to the 2009 Annual Review of Microbiology, "... we decided to look for new anaerobic microorganisms, especially for fermenting cellulose and other easily available substrates that could be converted to feedstock chemicals and fuels that could substitute for gasoline."
Innovation: a stick subject
From this beginning, among others, the process of generating ethanol as a fuel was put into motion. Other scientists and engineers continued Dr. Ljungdahl's work, as well as Dr. Ljungdahl himself, to perfect different stages of the process, isolate and identify the various microorganisms that might be used, and together they opened a new industry. Although we are now looking to move past ethanol to more advanced biofuels, the importance of this early work cannot be understated.
The process of innovation is sticky. It moves by leaps and bounds, and is rarely smooth. If Dr. Ljungdahl had not decided to turn his research toward a new gasoline substitute, the same discoveries might still have been made. Certainly, there were other researchers looking at the same or similar problems, looking for unique answers. And we might still be using the same ethanol we use today. But, back in the late 1970s, it would have been impossible to predict the exact path that it would take to get from there to here.
Some of Dr. Ljungdahl's work with these bacteria has also been used in the technology of recovering waste paper. Turning waste paper into useful pulp, that in turn can be used with virgin pulp to make recycled paper, has traditionally been a chemically intensive process. Using bacteria and fungi for "biological pulping" offers many environmental benefits, and may eventually improve the quality and properties of recovered paper. The science for these new innovations is still in the labs, years or even decades off. But they also owe a debt of gratitude to the work that came before.
Solving global warming
And neither of these works, of turning biomass into biofuel or recovering waste paper, are what Dr. Ljungdahl may be best known or remembered for in the decades to come. Working with Dr. Harland G. Wood, in a continuing project for nearly 20 years, Dr. Ljungdahl helped to identify what is now known as the Wood-Ljungdahl Pathway. This biological process, found in many organisms, is one of the ways carbon dioxide is cycled from the atmosphere and into these organisms. Ljungdahl writes that this "is a significant process and ought to be considered for sequestering carbon dioxide to solve global warming."
Ironically, or maybe exactly, one of Dr. Ljungdahl's early jobs as a research chemist was with the Stockholm Brewing Company. He writes that it was here, in the microbiology lab for a brewery, that he was first introduced to the type of microorganisms he would study for the rest of his life. He quotes Evald Sandegren, who headed the Central Laboratory, as saying to him, "Know you can learn a lot about life studying yeast and barley." This would become Dr. Ljungdahl's own personal dictum, that the pursuit of knowledge, even with no practical goal, can yield unimaginable results.
NEW YORK, Mrz. 21, 2011 (RISI) - The concept of innovation is often more of a problem than a solution. Here's the problem: It can be almost impossible to predict when an innovation will occur or what the results will be of any particular innovation. Or, here's the problem restated: Innovation can be both damaging and constructive, and often at the same time. Innovation can be defined as sustaining, where they propel an industry forward, or as disruptive, where they can create entirely new markets and industries. Which means that innovation often depends on which side you're on.
Clayton M. Christensen, a professor at Harvard Business School and author of some very well regarded books on innovation, is generally credited with coining the term "disruptive innovations," and previously "disruptive technologies." To Christensen, a disruptive innovation is a lower-cost, lower-performance technology or process that upends an established market or industry, eventually becoming the new standard. As a simple example, think of the ballpoint pen.
Before the ballpoint pen, the fountain pen was pretty much the only game in town - unless you used a pencil. Fountain pens were relatively expensive, for most people, along with the ink, and were messy in their own right. But the ballpoint pen was clean, the ink dried almost instantly, without the need for a blotter. And the ballpoint pen was self-contained and disposable. Although not able to produce the elegant script of a fountain pen, the ballpoint pen quickly grabbed the market.
Is technology going too fast?
Here's the question of perspective: Was the ballpoint pen truly a disruptive innovation? Certainly to fountain pens, and fountain pen companies, the ballpoint pen was highly disruptive. Consider how many fountain pens are floating around your office today, in desk drawers, at the copy machine, stuck in the corkboard ceiling. And if you're someone who needs to jot down some notes for the afternoon meeting, then a ballpoint pen is pretty ingenious. It's not disruptive to you in the least. Throw it in your pocket and cart it anywhere; throw it away when you're done.
Christensen would probably argue that, in terms of innovation, the only perspective that counts is the one focused on the processes and technologies of an existing market or industry. When we're talking about a disruptive innovation, he might say, we're looking at how these established systems are challenged by new processes and technologies that eventually change the status quo. The losers of a disruptive innovation are the companies that fail to foretell the future. The winners are the new companies and the consumers - the ones who just need to write something down - that gain in the long run.
Now, I'm no Luddite. I have no desire to go back to chalkboards in schoolrooms and waiting a week to read a letter from my dad. But is technology and innovation racing too far ahead of the rest of us? Are all innovations good for consumers and society, no matter whether they're sustaining or disruptive to an existing industry? Is it time to rethink how we define a disruptive innovation?
The consumer will decide
I asked Rich Faber, Innovation Manager with International Paper, about his thoughts on innovation. Without divulging any company secrets, Rich referred me to a recent Morgan Stanley report on the disruption of print by the adoption of tablet computers. Tablets, Rich wrote, "are the biggest news story affecting print and paper." In this respect, I completely agree.
As Rich pointed out, the jury is still out on the tablet as an innovation, most likely because we're right in the middle of this event. It is currently impossible to predict whether tablets will be ultimately disruptive or sustaining. What's important to remember is that the consumer will decide what is most beneficial to them - whether they want to keep printing pages of paper or not, or even buy printed books and magazines. When all is said and done, the consumer will be the final arbiter of what has been disruptive or not.
NEW YORK, Mai. 9, 2011 (RISI) - Ask ten people how to define innovation and you'll get fifteen different answers. Ask them how to make something innovative or discover an innovative process, and you'll most likely get another fifteen different answers. That's a snapshot of the responses I've received after the first two parts in this series on innovation in the forest products industry.
When it comes to innovation, it's not, as it seems, whether we should be concerned with achieving a single ideal of innovation. Instead, it feels that innovation may be best described in this way: Innovation is found by examining possibilities rather than probabilities.
There are some very popular academic studies that have tried to tie down innovation in the forest products industry. A 2005 study by Abra Hovgaard, Eric Hansen and Joseph Roos, is called "Innovation in the Forest Products Industry: an Analysis of Companies in Alaska and Oregon." Its objective was simple: "Because there is a lack of innovation research in the forest products industry and innovative activities in the industry are not well document, this study attempted to fill that void.
What did Hovgaard, Hansen and Roos conclude? That "the innovation process is a combination of semiformal development stages, trial and error, intuition and luck." And there are several pitfalls to innovation. "A variety of factors constrained companies from being more innovative, including government regulations, shipping and labor costs, lack of cash flow, raw material characteristics, marketing expertise, and raw material supply."
To add insult to injury, the 2005 study determined that forest products companies have a laundry list when it comes to defining innovation. Study respondents said that innovation is:
- A way of thinking
- Something never done before
- About people
- Niche products and markets
- Customer oriented
- Marketing
- Process
- Product
- Business structure
With so much working against it, is there anything that can help innovation? "Offering companies the chance to exchange ideas and network is the most valuable resource available," replied the 2005 study.
Two years later, in 2007, another study came to a similar conclusion but with an interesting twist. "Innovativeness in the global forest products industry: exploring new insights," by Eric Hansen, Heikkin Juslin, and Chris Knowles, reported that there were "significant gaps in our understanding of the phenomenon" of innovation. And there were still a number of obstacles standing in the way of innovation. But for the companies who were up to the challenge, "firms have significant opportunities to increase innovativeness and, thereby, enhance competitiveness."
In the 2007 study, the authors narrowed the definition of innovation to only a few possibilities:
- Creating or adopting something new
- Creating the right culture
- Managing the market-customer link
- Being a leader
- Focusing on the future
In the conclusion of this later study, an interesting sentence jumps out. "It cannot be overemphasized that ... there must be an atmosphere that is open and in which people feel free to take risks. Otherwise, innovativeness will be stifled." If innovativeness is stifled, then competitiveness is at risk.
For one of the first articles I wrote in The IFPTA Journal in 2008, I asked a CEO of a major shipping company to share his thoughts on success. His secret: "Listen to everyone." His emphasis was on the word "listen," instead of using the word "talk". For this executive, listening meant that everyone, inside and outside of the company, is capable of implementing success in the company.
Too many times, especially in tradition-heavy cultures and companies, where one generation learns from the last, it becomes too easy to fall into a rut. But for the longest lasting companies, employees, suppliers, partners, customers, competitors - in short, everyone - are all asked for their feedback and suggestions.
So, to wrap up this series, here's my definition of innovation: Innovation is the search for new ideas, just like starting a company for the first time. And it is best found in the secret that those ideas can come from anyone.
---------------
