GE's New Durathon Battery and the Challenge of Faster, Better, Cheaper

Tuesday, July 24, 2012

    

General Electric has just introduced its new Durathon molten salt battery.

 

The battery illustrates the unique challenges of developing sustaining innovations - and particularly the Faster, Better, Cheaper challenge I described earlier. In doing so, it offers insights for both innovators and policy makers pursuing similar efforts.

The battery will initially be used for backup power in cell towers operating in unreliable electrical grids, primarily in Asia and Africa, with an eye on future markets including wind farms, locomotives, mining trucks, work boats and buses. Peter Coy, writing for BusinessWeek, said it well: "One clear lesson from GE's experience is that choosing the right elements off the periodic table is only the start. The hard part is producing the battery in large quantities with high quality and at low cost."

The Faster, Better, Cheaper challenge reflects an inherent challenge of bringing sustaining innovations - whether in energy, water, food, agriculture, or elsewhere - to existing markets. The process often requires reaching manufacturing scales that equal incumbent technologies (faster); making products as reliable as incumbent technologies (better); and requires making them profitably in spite of the low margins of most entrenched competitors (cheaper).

This is not easy, and dropping any one of these requirements can spell disaster for a project team or startup.

One way to approach the faster, better, cheaper challenge? Invent as little as possible. Molten salt batteries have been around for a while, and GE chose a design that already worked, having been developed in the 1970s in South Africa. The batteries were used by Daimler-Benz in its A-Class electric vehicles, and building on components developed by Ford Motor Company in the 1960s.

It also helps to pursue opportunities that exploit existing organizational capabilities, rather than require developing wholly new ones. Without the financial strength, manufacturing and market experience, and global reach of GE, it would be near impossible for companies to develop such a battery, tune the manufacturing process, and find the best customers for its particular strengths and weaknesses. (Molten salt batteries store twice as much energy as lead-acid batteries for their size; last 10-times longer; handle extreme temperatures; and but do not discharge quickly).

Being able to make and market the batteries to cell phone systems in Asia and Africa until the technology becomes competitive in developed economies is not an option most companies can entertain.

It's fashionable to talk of disruptive innovation. After all, don't we hope for large, rapid, and widespread changes to our current industrial model? But the very scale, speed, and quality of the changes we need actually require boldly incremental innovations like GE's Durathon battery.

We neglect that lesson at our own cost.   

 
 
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AndrewHargadonAndrew Hargadon is the Charles J. Soderquist Chair in Entrepreneurship and Professor of Technology Management at the Graduate School of Management at University of California, Davis. Hargadon's research focuses on the effective management of innovation, particularly sustainable innovation, and he is author of numerous articles, essays, and the book How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Harvard Business School Press).

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