Wednesday, December 13, 2017

A legacy of disruptive innovation

In Australia last month, I picked up a copy of the magazine "The Monthly." I confess I'd never heard of it before, but one article in particular caught my eye: Tablet or Toilet?. In the essay, historian James Boyce makes the case that maybe the current revolutions based on computer technology aren't as transformative as we think, but more mundane inventions (e.g. the toilet!) have had a much bigger impact on human life over the past 150 years. I recommend you read his article. It's pretty compelling!

In my world of civil and environmental engineering design there is a lot going on now with new ideas, tools and automation to make our designs quicker, cheaper and hopefully better. I thought it would be fun to think about some of the innovations that have shaped engineering over the past 150 years.  I'm not an expert on engineering history, so I'll be leaning heavily on my old buddies Google and Wikipedia for help (hey, maybe I should use the Encyclopedia Britannica for nostalia!). Here goes...

Surveying

OK, so I thought I'd look back in history and find that the theodolite - mainstay of surveyors throughout the 20th Century - would have been a relatively new invention, but according to Wikipedia it was invented by a fella called Leonard Digges in the 1500's!  Now according to Encyclopedia Britannica their use for surveying didn't really take off until the invention of log tables in 1620, but what the heck! I guess these disruptive inventions are WAY older than I thought. Maybe it's time for a new disrupter...

Unmanned Aerial Vehicles (UAV) aka "drones" are in the news a lot these days. In my own firm, we actually have a group focused on inspections using drones. Pretty cool stuff. Their application for surveying is a no-brainer.  They can produce accurate surveys in a fraction of the time.  Here's one example.

The other cool innovation is LIDAR/laser scanning which enables existing structures to be captured in digital format and translated straight into models and drawings. Now couple this with UAVs and we're in Sci-Fi land already!

Drawings

Aha, now this time I am in the 150-year window.  Back in the 19th Century the advent of blueprints enabled engineers and architects to make copies of drawings more easily and with greater accuracy. To make these drawings, though, required massive teams of draftsmen in their drawing offices.

Fast forward to the end of the 20th Century and Computer Aided Design (CAD) emerges on the scene to make the production and reproduction of drawings simpler (bye-bye drawing office, hello CAD-Tech).  The next step was to produce 3-D "models" instead of simple drawings, from which drawings and other information can be pulled.
Finally, we can now link these models to all sorts of engineering, costing and other design information in "Building Information Modeling" (BIM). Bippty-boppity, BIM! One model to rule them all!

Process Design

And now to my fun area of design: selecting and sizing wastewater treatment processes.  Wastewater treatment technologies are roughly 150 years old, so it's interesting to think about how process design has changed over the years. Even up until recently, hand-calculations to size major process units were not uncommon.  Certainly spreadsheets enabled these calculations to be done more efficiently and effectively through the 80's and 90's.  There are many examples and even books written on the topic!

One of the major limitations of spreadsheet calculations for poop plants (sorry, I mean water resource recovery facilities - tough to break old habits), is that treatment facilities are quite dynamic, with fluctuations in flows and waste constituents over daily, weekly and seasonal patterns.  It's tough to do spreadsheet calculations on dynamic systems.
New kid on the block: http://www.dynamita.com/the-sumo/
A major breakthrough in the tools used to design these dynamic facilities is process simulation.  I could go on for pages and pages about process simulators because they're one of my specialties.  Instead, maybe I should put in a plug for one or other of the books I helped to pull together on the topic (no royalties for me though, bah!). From innovative tools in the 1990's process simulators such as GPS-XBioWin and SIMBA have now become the mainstay for all our design work.

Future Disruption

OK, no self-respecting blog on innovation and disruption can resist taking a wild stab in the dark on future trends, so here goes!

Big data?  Hmm, not sure: we have a lot of bad dataAnalytics? For design...not really.  Artificial intelligence?  Ooh, now you're talking. So, starting from a UAV scanning an area, or existing treatment plant, to producing a BIM model seems like a pretty short couple of steps. The pieces and parts are there already; we just need the smarts and rules to link them up.  But wait, we need super-smart process engineers to run the simulations, right?  For now, yes.  But even this piece can be automated (we're not as smart as we seem). To see the future, check out this cool tool developed by Organica. My understanding is that it's not fully automated yet, but not far off.  The day may come when I can hang up my slide rule, burn my log tables and let robo-engineer do all the hard work!



Sunday, December 3, 2017

Patent paralysis

OK, so I may have a different perspective on patents than others. This is due largely to the fact that a couple of the professionals that had the most influence on my growth as a poop engineer had a less than positive view of patents.  To protect the innocent and to avoid accusations of slander I’m not going to name names, but one individual had his idea stolen by a large firm who then patented it and tried to stop him using his own idea. Thankfully it mostly failed and time has healed most of the wounds.  The other individual was an innovator beyond compare and his ethos was to keep developing new ideas and applications to stay ahead of the game. He didn’t have the time or inclination to “waste” money on patents.

At this point I should also give the background that my little world is mostly the design and upgrading of publicly-owned poop plants.

So, with this background, let me set out why I think patents can be a bad thing.

Why I don't like patents...

1. They stifle innovation

The very purpose of a patent is not to enable someone to produce something, but to prevent anyone else from doing it except you in order to have an advantage. If you patent an idea, no-one else is going to do it, and in our little poop-plant world that stifles acceptance and further development. In other realms where you’re mass-producing consumer goods or medicines I can see this is OK and fair, but in my space it’s really tough to get anyone to innovate, so patenting an idea can kill it pretty fast. I don’t think many equipment vendors get this.

2. POTWs can’t specify “one-of-a-kind” technology

Hand-in-hand with stifling innovation, or partly the cause, are the rules that prevent most public utilities from specifying unique technologies. This makes it VERY difficult to do anything new. On the other hand, having just 2 or 3 vendors competing in the same space can be a major boost. I actually spend quite some time comparing technologies and my job is made a whole lot easier if there is more than one of a type.

3. No-one likes lawyers

Now don't get me wrong, there are many fine and upstanding lawyers in the world, many of whom have been good friends of mine over the years. And we definitely need lawyers to help us uphold the law.  BUT in the litigious culture of the Western World (sorry, I mean where the "rule of law" prevails, yawn), as soon as you threaten to bring in lawyers, we all get a bit weird. Engineers in particular get very uneasy around lawyers and their word games.  Heck, we're straightforward thinking, problem solvers. Please don't try to trip us up with what we mean when use certain words or opinions.  I've read a couple of patents and the language in them is awful lawyer-speak, seemingly preventing anyone from doing anything anywhere, ever. 

Overcoming Patent Paralysis

OK, so I've bad-mouthed one of the main mechanisms for encouraging and protecting inventions since the 16th Century, so do I have any suggestions for a better way forward?  I'm not a lawyer (phew, you say), so perhaps I'm not qualified to comment, but here are a few ideas for alternative ways of driving innovation through new ideas and inventions without using patents to stop it...

A. Stay ahead of the game

I mentioned this already, but early in my career I worked for a company that developed some amazing online instrumentation including online respirometry which, to this day, no-one has ever come close to matching.  I didn't appreciate it at the time but the ideas produced in that small firm were way ahead of their time and I believe that they only patented one mechanical item out of all the ideas and innovations they produced.  The ethos of my boss was to just keep ahead of the game. It turns out he's still 20 years ahead of the game!

B. Go open source

This is a radical idea, but one used by Elon Musk.  Don't prevent others from using your ideas, but let them have a go too, then compete to win.  Particularly if your ideas are radical and maybe in a whole new domain of their own.  Opening up your ideas to others will help spur research and more ideas from which you and the others will all benefit. Isn't this how research is supposed to be done? Rather than hiding your ideas or locking them down so no-one else can develop them further, consider opening the black box and learning from your competitors.

C. Copyright, don't patent

Did I mention I'm no lawyer, so I probably can't comment fully on this, but there are protections under law for published materials and ideas that are covered by copyright.  I think there are some weird loopholes in US patent law that allow you to pinch ideas for the 1st year after they're published if you have good lawyers (the experience of my other colleague I mentioned earlier), but still, if you have an idea and publish it, then you have some protections, I think.  Doing this, plus considering the "open source" approach is really what research should be about, I think. But only if you want to encourage innovation!

OK, so equipment vendors and those of you who've patented a gazillion inventions, let me know why I'm off base as usual!




Sunday, November 12, 2017

A Value-based Approach to Innovation

Innovation is a very popular topic these days. A quick Google search on the word "innovation" shows that the use of the word over time has gone through the roof in the back half of the 20th Century until now:
Use over time for: innovation
I've read in many places (such as here) that the word innovation hasn't always had the positive connotation it has today, but in previous centuries was a derogatory term akin to the idea of "winging it" where you had to improvise because you hadn't planned properly or hadn't thought things through.

In the modern use of the term it's really supplanted the word "invention" to simply mean "coming up with something new." To be honest I prefer the word "invention" in the engineering world because it carries the idea of actually planning something, but hey, we don't always get to choose the buzzwords doing the rounds these days!


Innovation = Risk?

I love new ideas and new technologies, and, in my own poop-treatment world, I'm bowled over by the number of initiatives, businesses and people driving innovation. However, what I don't see is a lot of discussion on handling the risks associated with innovation, or - more specifically - a way of gauging whether the risk of the innovation is worth it in the long run.  I don't want to be a party-pooper when it comes to innovation, but I also hate to see us innovating just for the sake of innovation.


The Concept of Value

I've been through a number of "value engineering" (VE) exercises, both as the evaluator and also as the recipient of the evaluation.  It can be a frustrating process but I think it's a worthwhile exercise.

A fundamental concept in VE, is that value is quality over cost, or benefit over cost. So in principle you can improve the top line of quality or benefit and increase value with the same cost, or marginal cost increase, or simply look to reduce costs whilst trying to maintain the desired quality.  In the equation, we can use actual currency for each of the parameters if the quality can be quantified in monetary terms to give value in actual dollars, euros etc. More often though, quality is a non-currency improvement (e.g. more flow can be treated) or even a non-numerical benefit (e.g. more reliable, or more flexible).
So this equation can be used to assess value quantitatively or qualitatively.

Innovation Value

So, how about extending the concept of value to innovation i.e. an "Innovation Value" in which we see the value we get from innovation in terms of improved quality and/or lower cost, but include a term that takes account of risk too?  The equation would be something like:


This gives us now a way to conceptualize the extra value we get from innovating whilst also acknowledging and maybe even quantifying risk factors.

If the innovative idea has low or no risk, then Risk = 1.0 and we assess the idea the same way as any VE idea.

If the innovative idea has a high risk, then Risk > 1.0 and we can crank that factor up according to some scale that takes into account the risk profile.

I guess we can also think about innovation as a way to reduce risk, in which case Risk < 1.0 i.e. the innovative idea is less risky than the status quo.

Quantifying Risk - Conventional Approach

Risk is commonly assessed using a matrix of severity (or consequence) versus likelihood:
In this matrix, items in the "Acceptable" range can be scored with the Risk at or near 1.0, then items in the yellow range have increasingly larger Risk values from, say, 1.1 up to 1.5, and then items in the red zone can have larger multipliers of 2 or 3, or perhaps are simply designated "not acceptable," depending on the appetite for risk?   

It might look something like this...


Quantifying Technology Innovation Risk

Now the conventional approach to quantifying risk is subjective but very flexible.  In thinking about poop treatment and technology innovations, I can think of three factors that might influence how we score risk: Deviation from the Norm; Development Level; and Complexity.

1. Deviation from the Norm

How far does the innovation deviate from the "norm"? If the technology is simply an adaptation of an established technology or a simple add-on to something existing, then perhaps the risk is pretty low (Say a 1.0 - 1.2 in our matrix). However if this is a very different approach, using fundamentally different ideas and perhaps very different technologies that haven't been used in this particular application before, then it might be pertinent to use a higher risk factor (1.5 - 2.0).

2. Development Level

At what stage of development is the technology? The US government and others commonly use the "Technology Readiness Level" (TRL) to define how ready a technology is to full-scale application. Here's the version used by NASA:

So, if we have a technology that's already at TRL 9, we give it a risk factor near 1.0, but lower TRL values have increasing risk factors.

3. Complexity

Finally, is the innovation more or less complex (more to go wrong) than the conventional solution? If it has more parts and pieces that can go wrong, or relies on something more complex in order to make it work, then it should have a higher risk factor.  Conversely, if the innovation is inherently less complex than the conventional system, then it wouldn't be crazy to apply a factor of less than 1.0!

Pulling it all together

So, like a good engineer, let's take that simple equation, add in all my factors and come up with something way more complicated... well, maybe not too much more complicated (score me down on my innovation!) to give something like...


Hmm, I dunno, perhaps it needs a few exponents added to each factor to make it needlessly more complicated?!

Saturday, August 19, 2017

Pondering on Corporate Growth vs Growing an Extended Family Business

I should start with the disclaimer that I do not have an MBA, and I'm no expert on business development.  However I have worked in several different offices around the world and have my ears open to what goes on in the business side of what I do for a living.

I've been reflecting upon the assimilation of engineering firms by larger firms, especially the takeover of CH2M by Jacobs that happened this past couple of weeks. In our growth-driven economy firms seek increased profits for shareholders, private or public, which drives certain behaviors.  One way to grow your stock price is through mergers and acquisitions. If done right, it benefits the stock holders in a big way.  However there will undoubtedly be some collateral damage as the now merged firm seeks to reduce overhead costs and keep the stock price up.  I've heard it said that a good merger is where 1+1 = 3 through synergies between the two original firms. I think that's unrealistic and you actually get 1+1 = 1.5 which is still better for either of the original "1" but less value than the sum of the two.  Then from that position of 1.5, you can continue to build your firm (with the added bonus of having removed one of your opponents!) Elementary math tells you 1+1 = 2, at best, so I think it's wishful thinking or downright dishonest to claim otherwise! In these mergers there will be financial winners for sure but there will necessarily be losers in terms of people losing their jobs and increased uncertainty for those remaining.

But I'm losing the train of my thought and the intent of this blog...

Something I've observed in many smaller businesses, particularly those that engage multiple family members, is that driving profits up is important but it is the means to an end and not an end in itself. The ultimate goal seems to be to create a better life for the owners, employees and their families. Now, you still have to work hard and make profits, but that's not the end goal.  Somewhere along the line, as they get bigger, these "mom and pop" firms lose their way and the means (profits) to the end (family health) becomes the end in itself and often the original end, suffers.  I wonder if there's a way to grow a firm but keep the attitude and focus on the health and vitality of the employees and the families it supports? Or perhaps the growth-driven economy doesn't allow that?

I love working for Black & Veatch.  Most of all I love working with the people in the firm. It does feel like an extended family in many ways. Whenever we hire someone new, or we do surveys of why it's a great place to work, the most common comment is that we have great people.  I'm not saying that as a means to inspire greater investment or growth of our stock prices. I'm saying that in and of itself.  Let's value people first, with an eye to keeping the money rolling in as a vibrant and financially profitable firm.  Do I need to make a legal disclaimer that these thoughts are my own and not those of my firm...? Or maybe the shift in business away from a trust-based model to a litigious one, could be my next topic for blogging! Did I mention I don't have an MBA? And yes, I know I'm naive!

Anyone else as naive as me?!