Download - MTI The Flight of Kittyhawk

Hewlett Packard The Flight of Kittyhawk

Ansa Ephraim Shashikiran Nikhil John

Kurian Sidharth

Ramachandran Supriya K

Kavitha Jayaram

Tony Sebastian Alok K Sudipta M Veerender N Manikandan V

9/23/2011 Management of Technological Innovations | Indian Institute of Management Kozhikode 1

GROUP 6

Agenda

What could have been

done

Reasons for failure

Strengths and

weaknesses of the team

Major Players

Salient points of the

Kittyhawk project

Context of the case


The Kittyhawk

The Kittyhawk

Introduced in June 1992 by HP

The smallest hard disk drive in the world

1.3 inches in diameter

20 MB of storage!

Ability to withstand 3-foot fall without data loss


The Divisional Story

President and CEO

(Lew Platt)

Test and Measurement Organization

Computer Products Organization

(Dick Hackborn)

Personal Information

Products Printing Systems

Mass Storage Group (Ray Smelek)

Disk Memory Division

(Bruce Spenner)

Ink-Jet Products Sales & Support

Computer System Organization

Measurement Systems

Organization


The Disk Memory Division

A niche player Established in the

5.25” and 3.5” markets

Focus on higher capacities and

faster access times

High end work station and

network server markets

First to introduce many new high capacity drives

3%

97%

Revenues in 1992

DMD HP

519

4000

3000

HP IBM Seagate

Disk Drive Revenue

80%

20%

Market Segments

OEM Internal HP


The Project Team

Executive support from top management

Limited support from functional

management and R&D at DMD

The separation of Kittyhawk project

from DMD

Team autonomy

• Develop product

• Find markets

• Cultivate customer base

Core project team

• Manufacturing, Marketing and R&D

• Rick Seymour as leader

• ‘Can-do’ type of people

• Sign the creed “I am going to build a small, dumb, cheap disk drive”

• Team dynamics and Group development research


7 Management of Technological Innovations | Indian Institute of Management Kozhikode 9/23/2011

• Introduce Kittyhawk in 12 months

1

• Accomplish break-even time of less than 36 months

2

• Achieve a $100 million revenue rate in 2 years after launch

3

• To be the first 1.3” disk drive in market

4

• Grow faster than disk drive market to help HP become industry leader (~35%)

5

The Kittyhawk Project Charter

The Original Kittyhawk Market

The Potential Markets

• Mobile information technologies

• Communication technologies

• Consumer electronics

• Automotive electronics

• New opportunities in standard computer technology

Narrow focus

• Disk drive specifically focused at mobile computing market

• Inexpensive drive for use in currently unviable applications

The Original

Kittyhawk Market

The strategy

• Lead industry in 1.3” form factor

• Ride mobile computing explosion to get to low cost

• “I’ll sell you a drive for $49.95”


The Competition and Customers

Flash Storage

1.8” disk drive

The Competition

Planned Customers

• PDA

• Sub-notebooks

• Hard copy devices

• Printers

• Copiers

• Fax Machines

Actual Customers

• Japanese word processors

• PDAs

• Digital Cameras

• Cash registers

• Telecom switching systems 9/23/2011 Management of Technological Innovations | Indian Institute of Management Kozhikode 9

The New Kittyhawk Market

The Way Out

• Continue pursuit of ruggedness based applications

• Leverage ruggedness and electronics integration technologies to make a 2.5” drive

• A $50 disk drive

Discontinuation of Project on

September 7, 1994

• No enthusiasm from DMD Management

• No profit cushion for further redesign

• Flattening of existing sales growth

• Need for critical new products


Who were the key players in the emergence of the Kittyhawk project? What did each of them contribute?

Question 1

9/23/2011 Management of Technological Innovations

| Indian Institute of Management Kozhikode

11

The key players

Bruce Spenner (General Manager, DMD)

•Part of the RISC implementing team

•A visionary & risk taker

•Questions sparked entrepreneurial spirit

•Attack a new hill

•Allocated priority

•Empowered the team

•Strategic staffing

•Clear, specific, aggressive goals

Richard Hackborn (Exec VP, Computer Products)

•Known for building HP’s highly successful printer business

•Provided the banner of approval

•Believed in the project scope Allocated funds from the Computer Products Organization

•Failed to communicate between the notebook and DMD division

Lew Platt (President and CEO)

•Provided exec support, frequent checks, champion to the outside world

Rick Seymour (Team Lead)

•Quick thinker

•Recruiter for the rest of the team

•Set the pace- the motivator

•Bolstered HP’s commitment to Kittyhawk

Jack White

• Analysis and research, zoned in on a few product options

George Drennan

• The first designer who gave shape to the product


What are the strengths and weaknesses of the way HP structured and supported the Kittyhawk development team?

Question 2


Strengths

HP Culture

Senior Management

Team Formation

Movement out of the current set

up

Autonomy in product

development

Leaders

Technical expertise of employees


Weakness

Conflict with the parent division

Wrongly defined objectives

Senior leaders were not technical

experts Indecisiveness

Market Survey

No support from internal clients

Failure to recognize the

potential of the product and give a second chance


The ‘Cheap, Dumb Disk drive’

Financial goals to break even in 36 months and a

$100 MM

Targeted specific customers with high

requirements like sturdiness

Failed to challenge the industry cost floor of $130

A disruptive technology that pursued an industry that was in its infancy

• assumed an explosion in mobile computing to reach low cost


Why did HP pursue the Kittyhawk project this way? What should they do differently if they could do it over?

Question 3


Why did Hewlett-Packard pursue the Kittyhawk project this way?

Device market

predictions

DMD functioned as an OEM and hence had to

always follow the market and the major players

Personal Digital Assistants were predicted to grow in

usage and a lot of the major companies had

invested in them

Market Research

predictions

Market research technique was used to identify

potential markets that could prove ineffective with disruptive technologies like

Kittyhawk

The MR firm did not have technology experts who could predict the future

and therefore depended on the clients leading to a

shared view

Greater emphasis on the shock-proof requirements expressed by few potential

customers defining the entire product design and

characteristics

Technology restrictions

$130 was thought to be the cost floor for

manufacturing any hard disk drive; introducing

innovative design changes to bring this down was

thought near impossible in the short time

Internal customer

requirements

Ready internal customer in the form of Corvallis

division that was making a super sub-notebooks;

serves as a reassurance and safety net


Improved processes for

evaluating new product directions

Implement accepted innovation processes like the

Stage Gate model that attempts to evaluate the

market for a product before proceeding

Allows a company to move from intuition and gut-feel to strategic direction based on

calculated risks and estimates

Creating silos within an

organization does not always work

Leads to a differentiation of values and ideas that can

create out-of-the-box ideas but also lead to polarization

within the organization

HP need not have created an entirely separate area for this team but incorporated within the organization. Eg. Newton project for Apple had similar

individualistic tendencies that attracted too much attention

and also failed

Better market understanding &

company integration

As a manufacturer of OEM devices, DMD would need companies to innovate and

create new categories in order to drive their innovation

Using internal customers in the Computer division would be a

much easier way to drive innovation and create new

technologies

What should they do differently if they could do it over?


What key insights does the case offer related to innovator’s difficulty in executing on innovation?

Question 4


Inadequate top management support

Conflict of Sustaining and Disruptive Technologies

DMD’s functional management and most of the R&D managers

wanted to focus on their existing product line

They didn’t want to venture into something

whose market was unclear

The Kittyhawk project had to be moved to a remote corner of the

division site


The Five Forces of Disruptive Technology

Companies Depend on Customers and

Investors for Resources

Small Markets Don’t Solve the

Growth Needs of Large Companies

Markets that Don’t Exist Can’t Be

Analyzed

An Organization’s Capabilities Define

Its Disabilities

Technology Supply May Not Equal

Market Demand


Inadequacy of end product

Kittyhawk’s main targeted end product PDA wasn’t materialized as expected

• Apple’s Newton PDA was one of the major failure of its entire product line

Mobile computing market still required break-through

technologies to fit Kittyhawk into their

products


THANK YOU


Download - MTI The Flight of Kittyhawk

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