Innovation and the Engineering Design Process

• Introduction: About Onshape and PTC
• Innovation Challenges for Product Developers
• Company Culture and Innovation in Product Development
• Innovation in the Product Development Process

Michael Krigsman: We're talking about engineering and the new innovation economy with industry pioneer Jon Hirschtick. Jon, tell us what you're doing now. You're a serial entrepreneur. What are you up to now?

Introduction: About Onshape and PTC

Jon Hirschtick: Well, right now, I am the head of the software as a service or SaaS business unit at PTC. I came to PTC when they acquired my company Onshape where I was a co-founder and CEO. Before that, I was co-founder and CEO for a long time at SolidWorks. Prior to that, I worked for many years on other software tools for product development, CAD, PDM, simulation, and tools like that.

Michael Krigsman: Very briefly, tell us about Onshape.

Jon Hirschtick: Onshape is the world's first and only full-cloud toolset for product developers. It includes CAD, data management, workflow. Basically, you could call it CAD and PLM tools and were built in the cloud to solve a lot of the problems that modern teams face with the old generation systems.

Innovation Challenges for Product Developers

Michael Krigsman: Jon, when we talk about product developers, who are we speaking about?

Jon Hirschtick: Product developers are the millions of people around the world who design, engineer, manufacture, bring to market new, what I'd call, manufactured products. Basically, anything you'd think of in the world that's made in a factory from the chair you're sitting in, to the car in the garage, to the machine that ground your coffee, kids toys, medical devices, PPE systems for doctors, ventilators, literally everything you'd imagine and a lot of things you'd never even imagine that exist in this world.

Michael Krigsman: Okay, so these are the folks who are literally designing and creating our physical world. What are the innovation challenges, especially when we move into a digital era like we're in today?

Jon Hirschtick: Everyone who manufactures products is under pressure to design the future. They have to build a new product. To be competitive in any business, manufacturing, designing, you have to always be innovative, always be building the future, something new that performs better, looks better, is cheaper, is better for the environment. Maybe it complies with new regulations or whatever. There are all kinds of pressures to bring out new products faster and faster with more and more innovation.

Michael Krigsman: What makes it particularly challenging as we're in this digital time? We're working from home. We are collaborating with dispersed teams across geographies. Why is it particularly hard to do that in engineering and product design?

Jon Hirschtick: The reason it's hard for us to do it is our world exists at the intersection of the physical and the digital. We're not just doing digital work on the computer screen. We ultimately have to build something physical. You can design an airplane or a chair on the computer screen using our software, but no one sits in a virtual chair. It has to be made.

A lot of what people do can be done digitally, but a lot of it is about understanding the physical reality: how it's going to feel, how it's going to look. We're doing that more than ever with digital representations. We're giving people a better and better idea, but it's still particularly challenging.

If I can add a couple of other reasons it's very challenging, the toolsets and amounts of data for modeling products, doing design, so-called computer-aided design or CAD systems, they're very complex pieces of software with huge amounts of functionality and huge amounts of data, much larger than anything normal people would be using, say, in a word processor or spreadsheet. You'd have to imagine, really, thousand-word processing docs just to make one simple product. Something like an airplane could have millions of those things, little pieces put together. It's particularly challenging to work with these tools, a very complex, heavy toolset in our world.

Michael Krigsman: How do you overcome the hurdle of designing a physical product yet not having access to a physical representation? I'm reminded of Beethoven who was deaf and yet he still composed symphonies.

Jon Hirschtick: First of all, in today's world of remote work, it's only amplifying needs that were already there. There was already a trend to distributed teams, Michael, even before the COVID crisis, because a distributed team can work faster.

The COVID crisis didn't invent this trend. It just amped it up. It turned up the gain and increased it.

One of the ways we're dealing with it is we're seeing teams go from older tools that involved installed software, heavy-duty workstations, and things that really require you to be in the same place. Those are getting swept aside in favor of cloud-based tools that not only make it super easy to deploy the system—basically go to a Web browser or use your iPad, your mobile phone, or whatever—but also, it allows people to work together in real-time, at the same time, on the same model, a 3D model on the screen of a physical product, anyone. You get on the Internet and, boom, we're designing in real-time together as if we're sitting next to each other.

Michael Krigsman: Product development as an industry has the reputation of being slow to adopt new technologies.

Jon Hirschtick: Yes, certain kinds of new technologies, of course. Yeah, when it comes to computing technology, product development is kind of the caboose on the train. It's the last one to head to the New World.

It was the last industry to move from mainframes to Unix workstations and then PCs. It was the last one to get on PCs. It's a very heavyweight.

It's the most demanding on any sort of computing platform, the largest data sets, the largest, most complex pieces of software, but it's also about culture. Manufacturing and design culture rely on precision. It's a complex process to make things.

There is a very ingrained culture around paper drawings, for example, where I was around when people said, "We'll never do it without paper drawings. It's got to be done on paper, on the board," you know. It takes a long time to uproot a very deeply entrenched culture and process around making things.

Company Culture and Innovation in Product Development

Michael Krigsman: In many cases, those kinds of entrenched, historical, cultural attributes arose for a good reason. For example, safety concerns. How do you address those kinds of challenges, such as safety, as you transplant these processes from paper to embed then essentially in the network?

Jon Hirschtick: When you digitally transform an enterprise, you're right, Michael, you have to be highly concerned about safety, repeatability, and quality because manufacturing is about repeatability, usually. You'd be very upset if you bought an iPhone and it didn't fit with the power adapter you bought months earlier. It's got to be exactly right. The parts have to fit together.

Today's consumers are more demanding than ever, of course, and safety is critical. As a result, what we see, Michael, is that the digital world lets us manage these processes better than in a paper world. In the paper world, yeah, it was a good idea to have a drawing that someone signed off on to approve it and say, "This is the drawing of the thing we're going to manufacture." But in the digital world, we can have approval systems that are even better, that are digitally signed.

The need is there, but we address the need in different ways. Again, not by haphazard copy in a file and who knows who's got the latest version, but by using a locked database with roles-based access control. This is the way not only product development systems work, but this is the way software development is going with clear release makers. This is the way permissions are set in computer databases like for HR administration. We're seeing better controls on security and access to data than were in the paper world, but you're absolutely right. You still need to think about safety, repeatability, and formal release management.

Michael Krigsman: Would it be correct to say that you are adapting the traditional processes as you move them into the cloud and, in some cases, it's not just an adaptation, but it's an actual improvement to take advantage of the capabilities that modern software provides?

Jon Hirschtick: Yes, exactly. We're adapting it. We're taking advantage. Just in the way you digitally transform banking from in-person with paper checks to very secure, reliable electronic means, we're seeing that with the controls around product development and manufacturing.

Michael Krigsman: As I speak with business leaders across multiple domains, culture seems to emerge as one of the core factors of digital transformation. What's going on with the cultural aspect in this shift?

Jon Hirschtick: The cultural aspect of digital transformation is very important, Michael. What I think, first and foremost, we're seeing the new generation of workforce coming out of schools and the younger people coming in with very digitally transformed lifestyles. They're ahead of the curve on this. They're used to collaborating.

The new generation workforce that's grown up with video games, the Internet, YouTube, they're used to globally collaborating. That's not a new idea of digital transformation. That's something they do every day on video games. That's very familiar to them to jump in and join a collaborative team in a 3D world. That's not industrial digital transformation to them.

In the existing companies, it's the same old story. There are innovators and then there are followers. The innovators see what needs to be done and they top-down, force their company to new styles of working.

Michael Krigsman: Are traditional product designers making that cultural shift?

Jon Hirschtick: I think it comes down to how much are you embracing these technologies outside of your work life as a leading indicator and a barometer of how much you'll embrace inside your work life. The product developers I meet, oftentimes they're driven to embrace new ideas because of their experiences outside of product development where they say, "Hey, I just ordered a pizza and that was so much easier than ordering parts from my local supplier. Why does it have to be like that?"

It's those people who are curious, I think, about the rest of the world and apply the same level of innovation they'd apply to get a wonderful hinge mechanism smoothly working at a consumer product when they start to step back and apply that same innovative mind and experimental mindset to how they work and the tools they use. Those are the kind of people that step ahead. I think that's not just in product development. It's in many other fields as well.

It's the innovators who look around and are constantly curious. I think, in order to be an innovator, you have to be willing to spend time looking at things that don't even seem relevant to what you're doing. You have to be somebody who says, "I'm going to just learn about this because it's different and new."

Just like, Michael, in setting up for this video, we were talking about microphones, cameras, and how you do your software. I'm always interested in how people are doing. What you're doing with video may give me an idea for product development tools.

What you're doing with video might give a customer an idea about how they could change something in their product or service. It might be that they could make a better coffee machine [laughter] if they could transmit data using IoT sensors over the Internet and collect that in some centralized way. Maybe some minor thing that we see in what we're doing sparks that interest.

Designers are always inspired. We're informed. We have inspiration boards of examples, if you walk into designers. They should be inspired not just by things in nature or the Bauhaus Furniture. [Laughter] They should be inspired by the tools and processes they see in other parts of the world and they can bring those to how they develop products.

Innovation in the Product Development Process

Michael Krigsman: Jon, you speak with lots of customers, lots of your customers. Can you draw connections between the folks who are adopting these new ways of working and the kind of results that they get, whether it's designing, as you said, a coffee pot or a jet airplane?

Jon Hirschtick: Absolutely. I think I can correlate the new ways of working with success in customers' product development. A great example are some of the COVID projects we're seeing, Michael. Teams are jumping in to build ventilators, build personal protection equipment, and they're doing it at unheard of speed and unheard-of quality.

They're not just producing cheap knockoffs of the old products. They're producing, in some ways, superior performing products. How are they doing that? They're jumping in with a "hyper-agile" process and attitude partly because they have to.

The circumstances forced their hand. Then they're finding they can work faster than they ever could before. They're embracing the new tools.

We have all kinds of people telling us stories of using our tools to do these projects. I'm thinking of a ventilator in particular. I was blown away by what they produced in a few weeks. Our tools play a part, but it's their attitude that plays a part and their sort of crisis-induced blowing up of all the norms of how they'd work together.

It's like that scene. I keep thinking of the scene in Apollo 13, the movie, where they dump the parts on the table and they're like, "We've got 12 minutes to figure this out. Everyone, jump in." You know? You know what I mean?

The didn't say, "Uh, why don't you? Joe, why don't you take the box of parts and come back with three ideas next Tuesday and we'll have a staff meeting?" There's no time for that. Dump it on the table and everyone jumped in at once.

I think that's kind of a model for the, unfortunately, crisis-induced activity. But what's going to happen in product development is, after the crisis is over, those lessons will be put to work in the normal business. The team that went and built that ventilator, they're going to go back to making bicycles, coffee machines, automotive sound systems, or whatever it is they're making.

Some of that hyper-agile experience is going to stick with them. They're going to say, "Well, on that COVID project we worked ten times faster than this. Let's put that to work in our business." You don't want to wait and have your competitor put those techniques to work before you do.

Michael Krigsman: If you're a product designer or product developer, what are the pieces that need to be in place that you must put in place in order to be hyper-agile and be super competitive, just as you were describing?

Jon Hirschtick: To be hyper-agile and super competitive as a product developer, you need to put several pieces in place.

• One, you need to be willing to change your process completely. You need to be openminded and say, "I'm going to do things differently."
• Two, you need to be a risktaker because the first time you do it, it's not going to all go perfectly.
• Three, you need to have the right team because no product is built by one person. If your team isn't selected to be compatible with this or they don't buy into it, it's going to be a problem.
• Four, you need the right tools.
• Five, you need the right project. Not all projects are ready for hyper-agile. If you're in the middle of a big long-term design project, maybe you don't switch. You have to pick the right project.

A bunch of things have to come together.

Michael Krigsman: Who is responsible for this inside an organization? It's not just individual passion, although, clearly that's part of it, as you're describing. But you're talking about an organizational change.

Jon Hirschtick: Yeah, you are. You're talking about organizational change that, in different types of organizations, come from different places. If you've got a small startup, it's probably coming from the lead entrepreneur, the founder, the CEO, who may also be the product developer. When you have a larger, more complex organization, the change agent could be bottom-up.

The other thing is to pick a project. Pick the right project. Maybe you're an auto company. I hear about this a lot. You make automobiles. You're not going to change in the middle of a new auto platform. You can't change everything then. But starting a new project, maybe you're doing something autonomous or electric vehicles, a small vehicle, or a ridesharing project.

These days, people instinctively understand they want to break the process in those. The point is you can do it in a special project. You can have intrapreneurship. It's kind of like the startup, but it's happening inside a larger organization.

Companies should think about processes and tools a little more per project and say, "Let's take this new, innovative project and use new ideas on it. Maybe even new people, too."

Michael Krigsman: The common thread is rethinking the process, bringing in the right toolset, working with folks to adopt different ways of working, bringing all this together.

Jon Hirschtick: I would say, companies need to realize they must be multidimensional innovators. They know they need to innovate in a core manufactured product. They know they need to come up with a better valve, pump, motor, or whatever. They need to know that they need to innovate in other dimensions—their processes, their tools, or even their personnel—if they're going to really be the innovative company of tomorrow.

Michael Krigsman: Jon Hirschtick, thank you so much.

Jon Hirschtick: Michael, it's a pleasure.

This transcript was lightly edited for clarity.