Research Technology Management

Online ISSN: 0895-6308
Publications
Article
Extensive data from the largest R&D-performing companies in the United States, Western Europe and Japan reveal several key factors that influence technological effectiveness and R&D performance. For example, European firms are less involved with their customers in carrying out product development than are U.S. or Japanese companies. Timeliness of technical results and newness of the company's technology portfolio strongly affect overall R&D performance and, more specifically, new-product revenues. Company sales growth is statistically related to overall R&D managerial capability as reflected in R&D meeting its multiple project-level objectives of schedule, technical performance and budgeted cost. These and other findings on strategic management of technology (many presented in Part 1 of this article, in the January-February issue of Research · Technology Management) arise from a global benchmarking study of the 244 companies that account for approximately 80 percent of the R&D expenditures in Europe, Japan and the United States.
 
Summary of Research Findings (Categorized using the Tier Metaphor)
R&D Metrics Reported by Interviewees (from 6)
Article
Metrics affect research decisions, research efforts, and the researchers themselves. From a review of the literature, interviews at ten research-intensive organizations, and formal mathematical analyses, the authors conclude that the best metrics depend upon the goals of the R,D&E activity as they vary from applied projects to competency-building programs to basic research explorations. For applied projects, market outcome metrics (sales, customer satisfaction, margins, profit) are relevant if they are adjusted via corporate subsidies to account for short-termism, risk aversion, scope, and options thinking. The magnitude of the subsidy should vary by project according to a well-defined formula. For R,D&E programs that match or create core technological competence, outcome metrics must be moderated with “effort” metrics. Too large a weight on market outcomes leads to false rejection of promising programs. The large weight encourages the selection of lesser-value programs that provide short-term, certain results concentrated in a few business units. This, in turn, leads a firm to use up its “research stock.” Instead, to align R,D&E with the goals of the firm, the metric system should balance market outcome metrics with metrics that attempt to measure research effort more directly. Such metrics include many traditional indicators. For long-term research explorations, the right metrics encourage a breadth of ideas. For example, many firms seek to identify their “best people” by rewarding them for successful completion of research explorations. However, metrics implied by this practice lead directly to “not-invented-here” attitudes and result in research empires that are larger than necessary but lead to fewer total ideas. Alternatively, by using metrics that encourage “research tourism,” the firm can take advantage of the potential for research spillovers and be more profitable.
 
Article
OVERVIEW: Some R&D organizations have derived significant value from embracing knowledge management (KM) principles in order to promote the flow of both resident knowledge and external information. R&D's innovation charter demands a focus different from that of other functions, specifically, to nurture open access to people's extensive tacit knowledge—that which is "in and between minds." Your company's culture and structure will be the critical factors enabling knowledge flow, with choice of IT tools of secondary importance. From the many initiatives used by leading companies, there are at least six to choose so that you: 1) instill goals/strategies, 2) access tacit knowledge, 3) provide search tools, 4) promote creativity, 5) capture new learning, and 6) build a supportive culture. This last, most important, initiative—culture change—will take time and involve the entire business. Asustained commitment to the program is thus required. The results will be "worth the wait" in gold.
 
Article
We seem to be fast approaching a bottleneck in post-genomics R&D, brought on by the difficulties inherent in the process of "target validation." One way to speed up the tedious work of target validation is to examine the design of scientific work itself. From what could be learned about work design in drug discovery, it appears that industrial scientists are by and large left to work independently—as in the academic tradition, albeit without the kind of peer review practiced in academic settings. Hence, it might be possible to improve the productivity of industrial researchers by re-creating the culture of a "surgical team"—drawing on the academic peer-review tradition while also making scientists accountable to one another for the quality of their work.
 
Article
The phrase "knowledge is power" may be a cliché, yet in today's business environment it is as true a statement as ever. In fact, knowledge is a unique company resource because its value actually increases when it is shared. Viewing knowledge as a strategic corporate resource, managers need to examine their own organizations to assess the degree of stored knowledge and absorptive capacity necessary to accomplish what is required for sustainable competitive advantage. A key question is whether or not the organizational structure is appropriate—from the perspective of both breadth and depth of knowledge—to the mission at hand. Breadth is obtained through employee diversity and connectedness depth through R&D experience as well as basic research initiatives, partnerships, joint ventures, etc. Overall, knowledge, like other strategic corporate resources, must be actively managed if it is to result in sustainable competitive advantage.
 
Article
OVERVIEW: In 1998, the Industrial Research Institute predicted that people in the laboratory of 2008 would be more risk-taking and business-oriented, with skills that are constantly being upgraded; that technical intelligence would be fully integrated throughout the firm; that technical work in the lab would be far more efficient and effective, utilizing a wide variety of outside resources; that flexible organizational structures and true enterprise integration would capitalize on a new era for growth and competitiveness; and that leadership and skillful management would be critical elements of these evolving processes. A recent survey of the IRI membership was undertaken to determine whether or not these changes actually happened and if so, to what degree. The results show progress but some of the actions proposed 10 years ago are just now being implemented.
 
Article
Review of the recent literature on the management of scientists and engineers updates the four categories of study identified by M. K. Badawy in his 1988 survey, and identifies six new areas. Badawy's review covered human resources planning, rewarding scientists and engineers, appraising the performance of scientists and engineers, and career management. The new developments impacting the way scientists and engineers are managed comprise cross-functional teams, leading scientists and engineers, knowledge management, demographic diversity, electronic technology, and outsourcing. Based on this updated review of the literature, actions are recommended in each of these ten areas for leading scientists and engineers in today's business environment.
 
Article
OVERVIEW : As R&D executives cope with tight financial resources and demands for increasing new revenues, the pressure to measure their organizations increases. Metrics allow R&D leaders to optim ize R&D's productivity and justify to the CFO and CEO their returns on continued funding. There are actually rich sources of appropriate R&D metrics for leaders to select from. By understanding the recent history of such metrics, leaders can use them to set the context for discussions with their CEO. Additionally, it has become evident that managing any form of intellectual capital utilizes common measurement elements. Consequently, R&D leaders are in an excellent position to help the leaders of other corporate functions develop metrics for their respective organizations.
 
Article
OVERVIEW: Changes in industrial R&D will accelerate over the next 10 years. Scenario planning indicates that there are several drivers of change, the most prominent of which are information technology and globalization. People in the industrial R&D laboratory of 2008 will be more risk-taking and business-oriented, with skills that are constantly being upgraded. Technical intelligence will be fully integrated throughout the firm and far more comprehensive than today. Technical work will be more efficient and effective, utilizing a wide variety of outside resources. Flexible organizational structures and true enterprise integration will capitalize on a new era of creativity for growth and competitiveness. Leadership and skillful management will be critical elements of these evolving processes.
 
Article
Advances in science and engineering have brought the world to a place where distance no longer matters. In such a world it is necessary to ask how well Americans are being equipped to compete for business and jobs. It was to answer this question that the U.S. National Academies issued its 2005 "Gathering Storm" study report. The report warned that America's competitive edge would have to be its ability to innovate through cutting-edge research, create new products and services, and undertake extraordinary entrepreneurship. Among other recommendations, it called for producing 10,000 fully qualified math and science teachers every year and doubling the investment in basic research. Although the Obama administration has initiated a major increase in funding for research and research facilities, the challenge will be to sustain this increase for 15-20 years of more.
 
Article
As technologies become more complex, organizational networks become the keys to successful innovation. During those periods when incremental innovation is the route to success, managers need to take a hands-off approach; they need to let the process of network self-organization proceed. The critical role for the manager is to monitor the possibility of major technology changes by looking for such indicators as: technical community disintegration, foreign invaders, new technology waves, and climate changes. When major technology changes are approaching or occurring, managers need to make sure that major organizational adaptations take place. Those adaptations are essential to acquisition and creation of the knowledge needed for successful innovation.
 
Article
As 3M nears its 100th birthday, a long-term tradition of innovation, established by its early leadership, allows it to continue to grow, adapt and change. The company is moving rapidly into the "new economy" by continuing to embrace principles that reinforce innovation. These principles include establishing stretch goals, empowering employees, supporting broad networking across the company, and rewarding and recognizing its innovators. Because of this tradition, 3M expects to continue to change, enter new business space, and provide sustainable, profitable growth for decades to come.
 
Article
OVERVIEW: The Boeing 787 Dreamliner is revolutionizing the passenger travel experience with radical innovations in the airplane interior. These innovations are the direct result of an unprecedented focus on airplane passengers during the design research phase, rather than relying mainly on information and guidance from airlines. Blake Emery describes the unprecedented passenger research that led to the development of the innovative interior, explains the findings from this research, and highlights some of the key innovations in the 787 passenger cabin. The article concludes with a discussion of lessons learned and important reminders for those engaged in the process of innovation.
 
Article
Data from the annual survey for fiscal year 1997, when added to that of the previous five years, suggests that Industrial Research Institute member companies have restructured their R&D efforts in ways that have increased innovation performance, as indicated by an upturn in the New Sales Ratio, and that their R&D expenditures grew more rapidly than sales revenues in FY '97 - the first time in six years. The increase in the NSR is clearly good news, while the increase in R&D intensity sends a mixed signal in that R&D expenditures grew by 17 percent as sales revenues declined by an average of 1.5 percent. Company participation in the survey increased, with 81 firms providing usable data in FY '97 compared with 78 in FY '96. However, reporting on business segments declined from 141 to 137, and the diversity of business segments reported upon also declined. As a result, fewer business segments met the "five-firm minimum" than in prior years. On the other hand, laboratory reporting increased from 49 in FY '96 to 57 in '97. CIMS and the IRI are beginning a concerted effort to increase the depth of coverage of research/technology management issues in specific business segments.
 
Article
Data from the IRI/CIMS Annual R&D Survey for fiscal year 1998 confirms continuation of the recent upward trend in both the New Sales Ratio and R&D intensity that was first reported last year. The increase in the New Sales Ratio and the increase in R&D intensity the last three years (1996-1998) reverses an earlier downward trend in these two metrics during the previous three years (1993-1995). These trends are only evident if one examines time-series data from a common set of companies. Although more than 75 IRI companies have provided R&D expenditure and sales revenue data in any given year, the trends noted above are based on only the 23 IRI firms that reported data for each of the last six years. This is a small sample. To examine the validity of these trends, R&D intensity values were computed over six years for a much larger set of IRI companies (136) from Standard and Poor's Compustat database. The results of this analysis served to confirm the R&D intensity trend noted above. One of the important aspects of the IRI/CIMS Annual R&D Survey is the ability to link the survey results with those of other complementary databases.
 
Article
"We spend too much on technology, and we don't earn enough from it!" This quote, attributed to Siemens' CEO Heinrich von Pierer in 1994, anticipates the essential question explored in this article: Is the strategy of ever-heavier commitments to internal R&D spending to establish an advantage in time-based competition inherently self-limiting? Investment-mix shifts to support accelerating technical advance as well as deteriorating rates of new cash returns to those shifts have been widespread throughout U.S. manufacturing since the mid-1970s. While no causal linkage between the two trends is detectable in the aggregate, there is a strong possibility that such a linkage functions at the level of specific sectors and industries. This has implications for both broad and deep industrial restructuring as well as the deployment of time-based competition as a corporate strategy.
 
Article
Accelerating the rate of innovation is a top priority for technology managers; understanding and managing common innovation enablers and barriers saves time and money. A review of multiple programs in Hewlett-Packard revealed that the top enablers of innovation are highly skilled people, a helping culture, management support, using checkpoints to provide focus, and interdisciplinary people working together. However, barriers are different across programs; consequently, managers should regularly interview teams to determine which barriers need to be addressed. And, barriers can be predicted on the basis of technology and market newness. For example, products with technologies that are new to the company face capability issues while products with new markets may experience market planning issues.
 
Article
OVERVIEW: The last half century has seen the emergence of a new model of business innovation featuring the convergence of entrepreneurs, rapid technological change, and venture capital. This combination has proven an effective force at realizing disruptive innovation that has often left incumbents shattered in their wake. What can the mature enterprise learn from this venture capital model of innovation management? What is the role of the CTO in identifying and adopting these approaches? This article investigates the ten leading strategies employed by venture capitalists and entrepreneurs to test new ideas and commercialize innovations quickly. The most disruptive innovations are seen to be those that go beyond technical discovery to embrace business model innovations that disrupt supply chains, disintermediate incumbents, and create new markets. This article presents the tools the modern CTO needs to participate in this dynamic process.
 
Participants in the consortial benchmarking project on supplier innovation.
Preferred customer matrix and generic strategies for the buying fi rm.
Article
OVERVIEW: In the context of open innovation, firms increasingly rely on the collaboration of suppliers in their innovation processes. However, not all competent suppliers are willing to collaborate with all buyers, which is why achieving preferred customer status with key suppliers becomes important. This paper presents the results of a consortial benchmarking project that studied the supplier relationship management tactics of several best-practice firms. It identifies characteristics of suppliers who innovate well with their customers and emphasizes the importance of a firm establishing itself as an attractive customer as a prerequisite of successful buyer-supplier collaborations. This paper proposes additional sourcing criteria to identify innovative suppliers and introduces a supplier portfolio model based on customer attractiveness and supplier competence.
 
Article
R&D managers express displeasure with the state of the art in portfolio decision models and are often doubtful about their firm's current portfolio of projects. Many feel that conventional portfolio decision models are impractical, requiring data that are almost impossible to estimate, or fail to take into account the risk-mitigating effects of diversification across a portfolio. The new approach presented here is scientifically rigorous, yet simple and practical. It can be implemented easily using only an EXCEL spreadsheet, and requires as inputs only the estimated success probabilities and payoffs of each R&D project. The model develops priorities for each of the R&D projects, which take into account the joint risk of the entire portfolio. The project priorities developed by this model are closely correlated with the internally established priorities for 54 R&D projects in two large ethical pharmaceutical firms.
 
Article
Getting talented engineers and scientists to take appropriate risks is one of the keys to building a more innovative organization. Boeing has worked to accomplish this over the past nine years by emphasizing educational opportunities, recognition programs, challenging work assignments, sharing the lessons learned, and communication that is "frequent, open and honest." Organizationally, Boeing's Phantom Works has been its catalyst for innovation across the company, providing technology to the business units and learning from them at the same time. One of the many learnings is that good ideas are found mostly outside the organization; hence, Boeing has established listening posts and partnerships around the world. But above all, it is leadership that leads the way to business success.
 
Article
As no one company can create all of the technology needed to support today's complex products and sophisticated customers, technology leaders have been seeking ways to incorporate external technology into their organizations' internal technology and commercialization streams. Consequently, a study was undertaken to identify the processes and techniques that 22 companies were using to establish their internal technology needs, identify the external technology to fill those needs, evaluate the technology for its quality and robustness, access the technology through agreements, and integrate it into their internal portfolios. Overall, the most successful programs were found to be those in which technology is valued by the business and where decisions to invest in technology are made by a senior-level, cross-functional team.
 
Article
The integration of technology organizations is a key element in the success of mergers and acquisitions. Research managers benefit significantly by an awareness of the unique set of people and organizational management skills that impact the integration process. R&D leadership provides significant value to the process if it becomes involved early in the planning process and remains involved through due diligence and post-closing integration of the combined organizations. Successful managers devote special attention to developing a common vision of the new organization, conducting technical due diligence, retaining the R&D infrastructure, managing employees through change, integrating intellectual asset portfolios, and integrating disparate R&D cultures.
 
Article
In today's competitive business and technology environment, the consideration of acquiring technology from industry leaders to deliver technology-based solutions is an imperative. Although there is an increased recognition of the need to establish collaborative arrangements for technology acquisition, there is evidence that the success rate of alliances is less than 50 percent. This finding highlights the need for a structured approach to technology acquisition. The approach adopted in the Mexican oil industry not only assists managers in considering relevant factors for establishing more successful collaborations for technology development in a new product development (NPD) context, it also encourages organizations to regularly scan available technologies in the marketplace before deciding on in-house technology development.
 
Article
Despite the evidence that most acquisitions fail to add value to the acquirer, an acquisition can be successful by following a disciplined integration program based upon best practices. A solid strategic foundation that explains the "why" of the deal is the right place to start customizing the integration process for maximum value capture. After the process is created, it should be followed rigorously. While speed is essential, quality is paramount; in fact, excellence at each stage of the integration cumulatively increases the odds of overall success. And don't forget the major impact of simple actions like CEO visits. By following these guidelines you can weather the inevitable surprises that sink many acquisition integrations.
 
Article
When scientists and engineers are first promoted to management, they need to have much more communication with people in other " silos" than previously. But they typically lack the skills to do this effectively, say corporate trainers. Some companies have developed in-house training programs to help bridge this gap, and others bring in outside consultants to teach classes. Each company's approach is different. But in general, communication skills are emphasized, including how to give constructive feedback, how to appreciate another person's perspective and how to coach someone. Training may be tied to real-life office challenges through multi-source feedback—written appraisals by peers, subordinates and supervisors, through mentoring, or a discussion with other students of a manager's specific "people" challenges. Still unresolved, however, is how to assess the effectiveness and benefits of individual programs, particularly when success depends on the individual's long-term commitment to changing his or her performance.
 
Article
Efficient portfolio management is paramount to adding shareholder value in any organization. However, the art of portfolio management stretches beyond evaluation techniques. More significantly, it is the ability to promote actionable steps utilizing all company assets that allows managers to create shareholder wealth. The strategy table approach to R&D portfolio management helps focus efforts into this realm of action for the following reasons: 1) It generates alternatives where choices will actually be entertained (the equivocal projects); 2) It eliminates unnecessary analysis where no alternatives are under consideration (doomed, favorite projects); 3) It focuses decision makers on portfolio issues rather than project issues; 4) It provides the materials necessary to communicate a recommendation for action. Although significant challenges remain to make this approach commonplace, it appears to be an attractive methodology that should be considered for effective R&D portfolio management.
 
Article
The business climate has changed tremendously for North American automobile manufacturers. Until the late 1970s, there was little foreign competition. Manufacturers could benefit by large economies of scale, and there was little incentive for radical innovation within the business. Today, manufacturers from all over the world compete in the United States. Customers have more than 600 vehicle options to choose from, and the intense competition has kept prices competitive and margins thin. Such changes have forced manufacturers to innovate as they never have before. In 1998, GM embarked on a corporate strategy of innovation and growth. As a result, GM Research transformed itself from a lab that had been working primarily to support an existing production system, to a lab focused on business innovation. The target was to put 30 percent of the lab's resources on exploratory projects, but projects that could create wealth for the company. Changes required by the new emphasis included establishment of metrics at the lab level, increased research partnering with universities, and initiation of research programs with key suppliers and automotive alliance partners. Lessons learned: move fast, communicate well, keep some seasoned researchers involved, and make sure the company's top leaders support, if not demand, the new R&D focus.
 
Article
The decision-free approach to the valuation of R&D projects is mathematically identical to a probability-adjusted sequence of real options, when systematic (or market) risk is set to zero. Besides adding confidence to the calculation, this observation allows a clean separation of the value contribution of the option to abandon contained in a stage gate approach plus the additional value gained from market risk (as measured by volatility). One consequence is to enable the risk-adjusted valuation of R&D projects on a compact and familiar set of variables: net present value, initial investment, and the estimated cost, duration and probability of success for each R&D stage. An estimate of the value of the project at the completion of each successive R&D stage is also a useful output of the method.
 
Article
Technology executives are increasingly being called upon to find innovation opportunities along the technological frontier. To do this properly, they need a special kind of technological knowledge—they need broad technological edification and sophistication, including a panoramic grasp of the entire technological landscape and its major evolutionary trends. To help executives achieve this understanding an Atlas of Technological Advance is being created that will chart the global technological frontier.
 
Article
OVERVIEW: Advanced manufacturing technology is often considered only in the context of the direct benefits it provides to manufacturing operations—for example, lower cost, greater efficiency and more consistent quality. Not so for William Epstein, a small South Carolina-based apparel manufacturer. His companies integrate advanced manufacturing technology into virtually every aspect of the business enterprise. Advanced technology not only tempers the design of the manufacturing unit, but also profoundly shapes the business strategy and is heavily exploited for new business development. It even has a fundamental bearing on the corporate capital structure of the firm. Moreover, Epstein employs a variety of novel approaches for motivating the acceptance of new technology into his apparel operations.
 
Article
Research organizations are learning how to turn a diverse workforce into a competitive advantage. An effective diversity program begins with training at all levels of the organization. The best training programs focus on inclusion and are professionally developed. Providing "eye-opening" experiences such as temporary assignments in foreign cultures is recommended to help specific employees better understand the challenges faced by others. Mentoring is also important in gaining the full value from a diverse workforce. Special attention must be paid to the pipeline. Succession planning addresses the pipeline at the top of the organization, but pipeline development efforts must extend down into the organization where diverse candidates are being lost. Mid-level managers and supervisors must be encouraged to identify and develop a diverse pool of candidates.
 
Article
Innovation strategy helps a company in three ways: exciting its customers, outperforming competitors, and building a new product portfolio. The literature describes many frameworks for innovation strategy but offers little detail about how to implement them. This paper identifies 12 ways of visualizing innovation strategies: platform offering, co-creation, cycle time reduction, brand value enhancement, technology leveraging, future-proofing, lean development, partnering, innovation mutation, creative destruction, market segmentation, and acquisition. These strategies allow 100 leading global companies to dominate their markets and outperform the competition through innovation.
 
Article
Disputes or uncertainty over patent rights can impede negotiation of a collaborative research agreement or create ill will during alliance implementation. However, prospective collaboration partners can avoid these pitfalls by carefully defining both parties' marketplace intentions during the negotiation. Through such means as initial focus on "rights to use" rather than patent ownership and by carefully specifying the scope of the alliance, the parties can quickly create acceptable rules for allocation of patent rights or else determine that marketplace intents are so conflicted that an alliance is unwise. By considering the nature of the anticipated working relationships between the parties' technical staffs, prospective partners can decide how rights to use patentable inventions should depend on the source of invention. And by reaching a clear understanding on the impacts of the inventing source, the parties can establish effective ground rules for research staff interaction during alliance implementation. Throughout the negotiating process, research and business managers must get ongoing help from legal counsel as they translate marketplace intentions into a collaborative agreement.
 
Article
The allocation of resources within an R&D organization does not often explicitly consider the allocation among basic research, applied research, and development. However, a misallocation among these phases of research can have adverse consequences, sometimes unexpected, over time. A method of modeling a firm's R&D operation has been developed that uses system dynamics methodology and data from the firm's own experience. The model can give insight into the effects of changing allocations to phases, whether those changes are internally or externally driven. For example, increasing the share of R&D resources going to the final phase in order to accelerate the production of new commercial technologies may succeed in the short run but will eventually decrease that production in the long run.
 
Article
Heightened expectations for growth from internal technology suggest a requirement to improve the productivity of the "fuzzy front-end" of the innovation process. Its description as an organizational process should mesh with that of product development, as characterized by "stage-gate" concurrent engineering. With this in mind, a "Front-End Innovation Process" (FEIP) was established, first at AlliedSignal and later at Alcoa. Both processes were designed to meet business objectives and be able to drive "game-changing," technology-based, breakthrough opportunities. Both were based on a "fast-failure" model, derived from lean manufacturing thinking. Based on the experience at Alcoa and AlliedSignal, it is concluded that the integration of customer needs, future market directions, and technology evolution, with a formal idea generation process like FEIP, is achievable and increasingly necessary.
 
Article
Alcoa's evolving business strategy has transformed its technology organization to better meet the needs of the company's growing global reach. Technology strategies and program sponsorship are now led by Technology Management Review Boards (TMRBs), composed of business and technology leaders from business units with "like-kind" technologies. Technology strategies for these TMRBs, aligned with business units' needs, have been developed and reviewed with the Alcoa Technology Board. A new operational mode is now underway in which technology is managed globally as a "virtual," enterprise-wide, organization. Engineering-oriented activities have been moved into business units and/or to "development factories," closer to operations. The former central laboratory role of the Alcoa Technical Center has been changed. Technology teams, housed at ATC and led by TMRBs, are driving technology transfer globally, as well as pushing the envelope with breakthrough technologies to close those critical gaps identified during strategic technology planning. Other capabilities have been reorganized to better provide enterprise-wide shared services. Alignment of technology objectives with the Alcoa Production System and with increased customer and market focus is continuing. The change process has also brought new, extended responsibilities to the role of Alcoa's chief technology officer.
 
Article
Considerable work has been done by the Industrial Research Institute and other organizations to improve the efficiency of the technology function within a company. Protocols have been developed to evaluate projects, transform them from ideas to products or processes, and generate a balanced project portfolio. However, very little has been done to determine whether or not the portfolio developed is aligned with the company's business strategy, to achieve the company objectives. Consequently, an IRI committee developed a tool for testing this alignment. Ten "Alignment Dimensions," covering many necessary areas of alignment, have been formulated for use as a communication tool between the different functions within a company. It is believed that more and better discussion will lead to integrated planning and, in turn, better results.
 
Article
R&D faces challenges when serving multiple businesses and markets, each with its own strategies within an overall corporate strategy. To perform in this environment, Genencor has created an interactive, cross-functional engagement within the corporation that involves R&D, manufacturing, supply, and other supporting functions. Business integration teams (BITs) have been introduced to create the necessary cross-functional linkages. A process for setting and managing portfolio priorities has also been implemented, and stress is placed on the importance of open and proactive communication across both the internal organization and with external customers and industries. The resulting staff engagement and project ownership in various functions within the business have enabled dynamic, real-time management of the R&D portfolio. With effective leadership of the corporate innovation portfolio, significant performance gains have been achieved for Danisco's Genencor Division.
 
Article
OVERVIEW: Every technology-based company struggles to keep R&D focus in alignment with corporate business strategy. However, ensuring that the unique perspective of the R&D organization is included in the corporate strategic planning process is often a greater challenge, but one that is crucial for a company confronting new and emerging technologies with the potential to significantly change the competitive landscape. International Paper has found a "Voice of Technology" protocol and an Innovation Council to be effective in creating such alignment and fostering R&D input into the strategic planning of the business.
 
Article
Overview: Creating breakthrough innovations requires alignment of both marketing and R&D processes within organizations. In a study aimed at determining the most effective practices for developing innovative new products, executives from 32 successful technology companies were interviewed. Success in achieving breakthrough innovation was found to depend strongly on the nature of a firm's organizational structure, market research processes and corporate culture. Those companies with a history of successful breakthrough innovation have established processes that integrate marketing and technology functions. They utilize cross-functional teams that identify more strongly with the innovation project than with their functional orientation, participate in idea generation processes that marry marketing pull and technology push, engage both marketing and R&D staff in market research processes, and integrate R&D and market inputs when selecting innovation targets.
 
Article
Providing Weyerhaeuser with strategic options for dealing with fundamental change within the forest products industry is a critical role for Weyerhaeuser R&D. Business success in general is increasingly tied to the development and implementation of the right technology. For Weyerhaeuser, that includes technology that is well aligned with the needs of its core businesses over the long term. Key elements of a well-aligned technology program process are an effective technology intelligence effort, combined with knowledge of future customer needs, strong business participation to define their technology needs, engagement of businesses in developing the needed research program, and a commercial development process that brings valuable new products to market quickly. Weyerhaeuser has developed a program planning and prioritization process that focuses on providing the necessary competencies and products to meet business strategic needs.
 
Article
Leaders of R&D usually want consistently higher levels of innovative outcomes from their organizations than they normally experience. Attempts at "shotgunning" the problem may produce sporadic improvements, but, more often, innovative outcomes diminish when the shotgun is put away. A better way to sustain innovation is to make it as much a part of the organization's value system as, say, honesty and integrity. This, in turn, requires making values "real" by taking action in the "support legs" of awards, taboos and repetitive reinforcement.
 
Article
Although alliances are increasingly important to pharmaceutical companies, about 60 percent of alliances fail to produce their desired outcomes. Most of these failures are due to non-technical reasons. An analysis of Aventis' portfolio of drug discovery technology alliances suggests that addressing the key challenges that alliances pose to large pharmaceutical companies can reduce these failures. Moreover, three lessons emerge from the analysis as a pattern across successful alliances between large pharmaceutical companies and biotechnology firms as well as academia. These lessons provide a tactical basis for managers to implement and manage alliances across the drug discovery value chain.
 
Article
Applying project management disciplines to new product development projects is challenging, given the unpredictability inherent in the creative process. By using statistical design of experiments within the context of the scientific method, a project team can readily apply project management disciplines to new product development. Discoveries made during project execution may invalidate certain assumptions that were made during project planning. These discoveries may make some aspects of the plan irrelevant or impractical. Having a well-reasoned plan with well-articulated hypotheses and experimental protocol provides a framework for reacting to these discoveries. This is a framework for scope control. It gives management and the project team a better ability to make reasoned decisions regarding tradeoffs among timing, risk and project deliverables.
 
Article
Long-recognized for its capability in knowledge management, BP has used principles established prior to the merger with Amoco in 1998 to accelerate the integration of assets from BP, Amoco, Arco, and Burmah/Castrol. The new organization is furthering their capabilities for transferring know-how and innovation through applied technology and a focus on core processes. Improved capability in these areas is a corporate imperative, linked to improving productivity by more than 4 percent per year.
 
Article
Since 1851, Corning has successfully navigated through periods of tremendous economic and technological change. While change is often difficult to predict, it is important to take advantage of it—responding quickly and, at the same time, strategically positioning the organization for growth. Creating growth requires that heritage, products, markets, and vision come together. At Corning, this is accomplished in a centralized organization headed by a chief technology officer who reports directly to the CEO. They steer an innovation process made up of a balanced portfolio of initiatives and a tolerance for risk that recognizes that one often learns more from failure than from success. The importance of the role of leadership and corporate culture in managing through turbulent times, both good and bad, cannot be underestimated.
 
Article
The cost of innovation is a measure of the level of R&D investment necessary to generate inventions in a particular industry or industry segment. It can be used as a technology planning tool, particularly in support of the decision by technology-driven companies to expand into new areas. As an illustration, an analysis of the historical trends in the cost of innovation in the chemical and pharmaceutical industries reveals a significant difference between them: relatively low and constant for the chemical industry, higher and increasing rapidly for the pharmaceutical industry. This helps to explain why it has become increasingly difficult for chemical companies to expand into pharmaceutical applications. Within a single industry or industry segment, the cost of innovation concept can also be used to benchmark the effectiveness of an R&D operation.
 
Article
OVERVIEW: Innovation is often perceived as an unmanageable process. At best, sophisticated selection procedures can impose discipline and guidance so as to contain costly errors. The research reported here, conducted with 923 chief technical officers and senior R&D managers, yields a more nuanced view. Innovation becomes manageable when managers move away from prescriptions that view the process as uniform and recognize that different rules and practices apply in different contexts. The main argument presented here is that product architecture has become a key element of innovation strategy. Innovation focuses not only on stand-alone items but increasingly on systemic as well as modular products and services. Product architecture interacts with market dynamics, which leads to distinct "games of innovation," seven of which have been identified empirically. These games are not predetermined but leave ample room for creative actions.
 
Article
OVERVIEW: An innovation portfolio, which is focused on early-stage ideas whose role in the overall strategy is still evolving, is very different from a project portfolio, which is focused on managing products in development. Our company sought to implement an innovation portfolio program to manage the development of concepts from initial idea to the front end of the project portfolio. The design of the innovation portfolio was motivated by the desire to increase the number and quality of projects entering into the project portfolio process. The innovation portfolio must allow for an evolving strategy as the most promising concepts emerge, leveraged by incremental investments. Unlike a project portfolio, attrition in the innovation portfolio will be very high, with concepts being shelved at each phase of analysis. The innovation portfolio is still in the process of thorough evaluation, but initial results are encouraging.
 
Top-cited authors
Robert Cooper
  • McMaster University
Elko J. Kleinschmidt
  • McMaster University
Scott John Edgett
  • Stage-Gate International
Henry William Chesbrough
  • University of California, Berkeley
Edward Roberts