Let me explain, why this will influence my future decisions in innovation marketing (advice).
The risk of a blast furnace
Iron is produced from iron ore, coke and additional materials (magnesite, dolomite...to decrease the melting pot, control viscosity ...). Among the processes of iron production, the blast furnace process is still the most prominent one.
A modern blast furnace produces up to 5 mio tons of iron / year and can be operated continuously for up to 10 yeas before shutdown.
To control the process you need to model various phenomena, like flows of iron ore and coke, liquid due to melting, gas - from bottom to top, energy - heat conduction and convection, mass and chemical reactions.
As the iron ore sinks it is indirectly reduced: Fe2O3 --> Fe3O4 --> FeO --> Fe (a process of improving material quality for the purpose)
BTW, the typical sitze of the problem: 40.000 spatial unknowns per scalar component of 20-30 unknown functions (temperature, max concentrations, velocities). The equations are of the reaction-convection-diffusion type and providing the required accuracy at speed you need to choose the mathematical solvers carefully.
To maximize the output you want to operate the furnace ambitiously but you must avoid that the liquid iron and slag erode the lining too early or, worst, melt through the shell of the furnace (if this happens, you better run).
With this respect, the risk of producing iron is a cost for securing the process, but also a strategic asset…it can be quantified, because of technical and economic modeling and simulation….consequently, optimized in the mathematical sense.
The risk of life
A good life? There is a widely expressed emphasis on the maximization of a benefit (health) and not the optimization of a risk. How to enjoy life, but avoid severe diseases? How much sport, how much mobility, how much interaction, how much celebrations, how much wine and dine…. how much medication…?
Yes, it is much easier to do risk management in quantitative fields - if dangers and opportunities are not quantifiable, we have limited ability to control them. But you're lucky if you're able to make danger and opportunities a positive contribution.
The risk of marketing
It's quite similar...it has the dilemma in it: is marketing risk a cost for securing a business or finding the optimal input fraction of an overall financial potential. This are the poles of the dilemma. Especially related to innovation marking where uncertainty dominates: predictability vs adaptability, control vs agility…?
I've introduced the reaction-convection-diffusion metaphor to marketing because it helps to optimize the market risk qualitatively…you put (the story of) your innovation into the pot (market)…it will
- react with worldview, states, solutions…in market segments related to its change potential and requirements
- circulate by convection at borders of segments with gradients in expectations, knowledge, persuasion
- diffuse through the market promoted by multiplying actors
Marketers can observe the "heat and speed" and control the process by adjusting access, information, education…avoid that the "pot" freezes the story or boils over with negative reactions.
Your innovation works and sells in principle…The Innovation Mesh tools helped to asses it…the reaction-convection-diffusion marketing metaphor will help optimizing market risk...
