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Confronting the Innovation Challenge

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Created on September 12, 2012

Just a couple of years after they launched their new business, Mukund Kavia and Kusum Kavia could see the end coming.

Combustion Associates, Incorporated (CAI), a minority business enterprise, had opened its doors as an engineering consulting firm in Southern California in 1989. Their timing could not have been better. California Air Quality Management Districts had just passed more demanding air quality regulations. Commercial boilers of a certain size — those used to provide heat and hot water in schools, hospitals, and hotels, for example — needed to be upgraded to meet the new standards. The managers of such operations did not typically employ experts on boiler emissions. They needed help. They needed someone like Mr. Kavia.

As a result of its fortuitous timing, CAI got off to a fast start. Mr. Kavia was a Kenyan of Indian descent, and he had been educated in the United States and the United Kingdom in the field of mechanical engineering. In starting CAI, he had found a satisfying way to put his skills to work and to earn a living as an entrepreneur.

There was just one problem. What would CAI do once all of the boilers affected by the new regulations had been upgraded to meet the new standards? That day was coming, and it was coming fast.

For CAI to survive, Mr. Kavia needed to reinvent it. He needed to find an innovative way to put his skills and his colleagues’ skills to work. In the course of CAI’s consulting work, the company expanded its expertise in the design, manufacture, installation, and operation of boiler systems, and deepened relationships with several manufacturers. Searching for a way to build on these new assets, CAI started to take on expanded contracts. Rather than just giving advice, CAI began operating as a general contractor providing installation, training, and after-service support.

Then, the company went a step further. Some of the manufacturers that CAI was working with had more orders than they could handle. CAI developed partnerships with the manufacturers, handling some of their manufacturing in their own facility. The manufacturers respected CAI and recognized that the company’s close contact with customers gave them insight that they otherwise would not have. CAI steadily expanded the kinds of products that it manufactured and tripled its revenues over the next five years. Through innovation, through bringing new skills to market, CAI created a new future for itself, and became a rejuvenated force in the California economy.

CAI's story was initially published in our 2007 The Sophisticated Innovator authored by Chris Trimble, Dartmouth College - Hanover, New Hampshire.