“With overcapacity, fierce competition and market consolidation, business model innovations and new value propositions are key to succeed or even survive.”

Dr. Christian Roduner, former Vice President and Head of Technology at ABB Turbocharging

Business model innovation is key to stay afloat, otherwise you die.

Innoboard: There is no generally applicable definition of innovation. Every industry and every department conceive it differently. How do you define innovation at ABB Turbocharging?

Dr. Christian Roduner: An innovation creates value either for an enterprise or for the society. Having said that, it is obvious that we limit innovations not to technological innovations, but apply a wider definition, including process and business innovations.

ABB Turbocharging’s technologies and products have decades of technological history. From a technological point of view, most companies think in product generation engineering, means new products are strongly based on existing products. How can companies ensure to still offer new values with every launched product and avoid incremental innovation?

To overcome incremental innovations, we developed a new strategy with a market segment approach. A market segment is characterized by common values and needs, e.g. the “fuel segment”, where the total cost of ownership is dominated by the fuel costs and consequently fuel efficiency is a value, the customer is willing to invest into.
We derived from the company strategy the technology strategy and the technologies needed to add value to the respective market segment. On that basis, we then develop market segment specific products and solutions. This is a clear and fully intended breach with our legacy platforms.

Our newly developed and recently presented MXP turbocharger, dedicated for Marine Auxiliary Engines, is a result of this new approach. A clearly identified need of this market segment is the ability of the ship crew to maintain the turbocharger themselves. A big focus in the development of this turbocharger was put on serviceability. E.g. it is designed with only one size of screws with one unique tightening moment. Service instructions come with an interactive Smartphone App, and via this App spare parts can be ordered.

Some experts would say that in the past decades your entire industry has focused on innovating products and processes. How would you describe ABB Turbocharging’s and your industries’ innovation focus today? How important are business model innovations and new value propositions for further success?

Our industry faces a stagnating or even shrinking market, a classical buyer’s market, with overcapacity, fierce competition and market consolidation. Business model innovations and new value propositions are key to succeed or even survive.

I expect models like “paid by the running hour” as well as various maintenance contract models to significantly grow. Here our industry will follow the airline industry, where various ownership and maintenance models, including remote monitoring as an enabler for different offerings, are well established.

New value propositions and business models often imply additional technical requirements, e.g., additional sensors in the case of predictive maintenance. If you develop new business models with existing products, how do you manage this challenge?

Upgrades is here the keyword. Upgrading is the process of replacing an older part of the turbocharger, when an overhaul is due, with a newer and advanced one. The same goes for monitoring equipment. It is developed to fit on existing products.

What is your personal goal regarding innovation for the next 12 months?

To achieve the 2017 revenue targets, we have set in our innovation project, with innovations beyond the current product and solutions portfolio.

About the interviewee:

Dr. Christian H. Roduner, GM „Jet & Missiles“ at RUAG Aviation, Emmen, Switzerland, held over the last 16 years various positions and functions in R&D and Engineering at ABB Turbocharging, the global leader in the development, manufacturing and maintenance of large turbochargers for 500 kW to 80+ MW diesel and gas engines. Most recently he was Vice President and Head of Technology of the global business unit. In this function, he had the technical overall responsibility for all products and solutions of the global turbocharger business, on top he was also responsible for the start-up initiatives of the BU.

Christian wrote his Ph.D. at the Turbomachinery Laboratory of the Swiss Federal Institute of Technology Zurich (ETH), Switzerland. For his scientific publications, he received two times the prestigious best paper award of the ASME IGTI Turbo Expo and he is the inventor of several patents.