Wednesday, August 30, 2006

The Innovation Equation

IBM conducted a very insightful study of 10 innovations which revealed an equation, so to speak, for innovation:

Market Insight
+ Technological Know-How
------------------------
Innovation

IBM shows this equation empirically through 10 examples. Here were two of the examples I thought were most compelling illustrations of this model of innovation:

Cemex:

Expensive equipment sits idle while waiting for cement deliveries
+ Satellite tracking technology and advanced scheduling software
------------------------------------------------------------------
Reduced the delivery window from 3 hours to 20 minutes

Progressive Insurance:

Good drivers want and expect cheaper rates
+ Satellite tracking technology & advanced risk calculating methods
-------------------------------------------------------------------
Aggressive pricing for good drivers while increasing profit

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