ENTI 359 Exam 2

What does the innovation premium measure?

The portion of market value attributable to investors' expectations of profitable future innovations.

Why can an inventive company have a low innovation premium?

New inventions may fail to generate profits or convince investors of future growth.

What did Tesla's high valuation despite annual losses suggest?

Investors expected substantial future profits from electric vehicles, software, and other growth opportunities.

What are the three components of organizational innovation DNA?

People, Processes, and Philosophies (3Ps).

What is founder imprinting?

Successful founder behaviours become embedded in organizational routines, hiring decisions, and culture.

What did Jeff Bezos ask prospective Amazon employees to identify?

Something they had personally invented, revealing initiative and inventive behaviour.

What leadership behaviour did A. G. Lafley encourage at P&G?

Direct customer observation, extending discovery beyond the R&D department.

What five discovery skills generate innovative ideas?

Associating, questioning, observing, networking, and experimenting.

Which capabilities are associated with delivery skills?

Analyzing, planning, detailed implementation, and disciplined execution.

Why must innovative teams combine discovery and delivery capabilities?

New ideas require both creative development and reliable implementation to reach customers.

What did Michael Dell and Kevin Rollins' working relationship demonstrate?

Complementary creativity and execution improve decision-making and implementation.

What did Microsoft's Defect Prevention Team demonstrate?

Different discovery strengths, combined with trust, can produce better collective solutions.

What are T-shaped skills?

Deep expertise in one discipline combined with broad knowledge of other fields.

What three considerations guide IDEO's multidisciplinary product-development teams?

Customer desirability, technical feasibility, and business viability.

What did 3M's colour-shifting film example illustrate?

Promising technology may fail commercially under unsuitable pricing, distribution, or business-model assumptions.

How should the balance of discovery and delivery skills change as innovation progresses?

Early exploration emphasizes discovery; manufacturing and scaling require greater delivery capability.

What are the four stages of BIG's innovation funnel?

Idea generation, winnowing, refinement, and capturing value.

Why should discovery-oriented people participate in early idea screening?

They can recognize possibilities and improve immature ideas instead of rejecting them prematurely.

What complementary expertise did Indigo's management team need?

Microbiology, crop science, manufacturing, regulation, agricultural sales, and commercialization.

What capabilities did Blue River's two founders contribute?

Jorge Heraud brought agricultural technology and business expertise; Lee Redden brought robotics and computer vision.

What expertise did Deere increasingly need beyond mechanical engineering?

Software development, artificial intelligence, robotics, data analytics, and agronomy.

What organizational weakness did Tesla's early production problems expose?

Technical innovation outpaced manufacturing, cost control, and operational execution.

What is an organizational discovery process?

A repeatable routine that encourages employees to generate and develop new ideas.

What is the purpose of the Five Whys technique?

Identify root causes by repeatedly investigating why a problem occurred.

What did Amazon discover by investigating an employee's conveyor-belt injury?

The workplace lacked a safe place for personal belongings, creating an avoidable hazard.

How does observing customers differ from interviewing them?

It reveals actual behaviour, workarounds, and problems that customers may not articulate.

How did Keyence systematically generate product ideas?

Salespeople observed customer factory operations to identify unmet needs.

What was the purpose of P&G's Connect + Develop initiative?

Obtain useful technologies and ideas from external inventors, researchers, and organizations.

How did Google Code Jam support organizational innovation?

It identified talented problem-solvers through competitive programming challenges.

How did IDEO approach its kitchen-tool redesign projects?

Investigate customer problems, observe usage, combine perspectives, build prototypes, and test improvements.

How did Monsanto accelerate agricultural experimentation?

Molecular breeding, robotics, and data analysis enabled faster screening of promising crop genetics.

What scientific association led to Indigo Agriculture's founding?

Beneficial microbes associated with human health might also improve crop resilience and productivity.

How did Indigo's technology differ from genetically modified seeds?

It applied naturally occurring beneficial microbes without altering the crop's genetic material.

Why did Indigo initially target water-stressed cotton?

Drought created an unmet need, and few existing technologies directly addressed that stress.

What did Indigo's early cotton field trials demonstrate?

Microbe-treated seeds produced yield improvements exceeding 10%, particularly under dry conditions.

Why were multiple field-trial locations important to Indigo?

Soil, temperature, rainfall, irrigation, and other conditions could change treatment performance.

What constraint makes agricultural field experimentation difficult to accelerate?

Fixed planting windows and crop-growing seasons limit opportunities to test and revise products.

What is a stage-gate product-development process?

Development stages separated by decision points with defined evidence, deliverables, and approval criteria.

Why was Indigo considering more formal product-development management?

More crops, markets, employees, and continuing product improvements increased coordination demands.

What manufacturing challenge arose when Indigo scaled microbial treatments?

Moving from small laboratory fermentation to commercial batches while controlling dosage, effectiveness, and cost.

What was Blue River's original proposed market before its agricultural pivot?

Autonomous lawnmowers for golf-course maintenance.

Why did Blue River abandon its golf-course concept?

Customers feared the damage and liability of autonomous equipment more than they valued potential labour savings.

What customer problem led Blue River toward agricultural automation?

Labour-intensive weed control that created high costs and staffing difficulties for growers.

Why did Blue River select lettuce thinning as its first commercial application?

High crop value, concentrated growers, frequent harvests, and measurable labour and yield benefits.

How did Blue River's lettuce-thinning machine select plants?

Computer vision assessed seedlings by characteristics such as size and spacing, then eliminated less desirable plants.

What potential advantages did Blue River's prototype offer over manual thinning?

Faster field operations, reduced labour demand, and potentially higher yields through improved plant selection.

What are the four organizational philosophies associated with highly innovative companies?

Innovation belongs to everyone; disruption is in the portfolio; small teams pursue projects; smart risks are encouraged.

What evidence indicates employees are genuinely expected to innovate?

Innovation is supported through time, resources, management behaviour, and performance evaluations.

What is psychological safety in an innovative organization?

Employees can challenge assumptions, propose ideas, and report mistakes without fear of punishment.

What was Google's historical 20% time policy intended to encourage?

Employee-led exploration outside normal project responsibilities.

What distinguishes derivative innovation?

Incremental improvements to existing products using established technologies and markets.

What distinguishes platform innovation?

Substantial changes to a product or architecture without necessarily creating a new market.

What distinguishes breakthrough innovation?

New technologies or business models capable of creating fundamentally different markets or opportunities.

What did Google's historical 70-20-10 allocation represent?

Approximately 70% core improvements, 20% platform extensions, and 10% new business opportunities.

What was Amazon's Two Pizza Team principle intended to achieve?

Small, accountable teams with faster coordination and greater independence.

How should project autonomy change as innovation becomes more radical?

More novel projects generally require greater independence from established organizational constraints.

What defines a productive failure?

An early, affordable setback with an understood cause that produces useful learning without major damage.

How did Indigo reduce farmers' financial risk when introducing its cotton treatment?

It charged $10 per acre only when measured yield improvements exceeded 30 pounds.

What was Indigo's proposed expansion target for 2017?

Six additional launches: two new crops and four new countries.

Why were Indigo's six proposed launches not equally demanding?

New crops required extensive R&D; geographic extensions relied more heavily on regulatory and commercial work.

What were Blue River's two main revenue-model options?

Selling machines outright or retaining ownership and charging for thinning services.

Why did year-round lettuce production favour Blue River's service model?

Frequent growing cycles allowed greater machine utilization and recurring service revenue.

What strategic disagreement separated Blue River's founders from Khosla Ventures?

A focused lettuce-first business versus an early commitment to a scalable agricultural technology platform.

What did Khosla Ventures mean by “think big, act small”?

Pursue a large long-term opportunity through small, staged investments that reduce important risks first.

What financing and hiring terms did Khosla Ventures propose?

A $3 million Series A and a 25% employee option pool, rather than the founders' $5 million and 15% proposals.

What were John Deere's Leap Ambitions intended to improve?

Customer economic value, operational productivity, and environmental sustainability.

Why did Deere acquire Blue River Technology for $305 million?

To obtain machine vision and AI capabilities for plant-specific crop treatment.

What made software subscriptions attractive to Deere?

The case estimated 85% software gross margins compared with approximately 25% for equipment sales.

What major concerns limited adoption of Deere's advanced machinery?

High costs, uncertain returns, repair restrictions, data ownership, and software complexity.

How did retrofit-focused competitors challenge Deere's strategy?

They offered lower-cost upgrades and autonomous capabilities without requiring complete equipment replacement.

What was Tesla's original premium-to-mass-market product strategy?

Start with an expensive sports car, then progressively fund more affordable electric vehicles.

What did the original Tesla Roadster's financial problems demonstrate?

A technically impressive product can be commercially unsustainable without scalable, cost-efficient manufacturing.

What did Tesla's Model 3 production difficulties demonstrate?

Strong customer demand and innovative design do not guarantee manufacturing capacity or profitability.

How did vertical integration distinguish Tesla from traditional automakers?

Greater control over batteries, software, manufacturing, charging, direct sales, and service.

What was Tesla's central challenge at the beginning of 2020?

Scale production and customer service profitably while launching new models and expanding internationally.