Showing papers in "Research-technology Management in 2003"

Overcoming the Crunch in Resources for New Product Development

Abstract: OVERVIEW:Most new product development efforts suffer from serious resource deficiencies across all business functions, and many of the symptoms that beset NPD can be traced directly to this resource crunch. The underlying causes of this crunch are a preoccupation with short-term financial performance, reluctance to kill projects (and the resulting lack of focus), and a desire for excessive speed to market. Strategic solutions to this problem include matching resources to the goals of the business, recognizing that all businesses should not be measured with the same yardstick nor resourced the same way, and “ring-fencing” NPD resources. How these resources are allocated is a problem in most businesses, and thus another solution is to implement an effective portfolio management system. Portfolio management provides greater focus (fewer but higher-value projects) and also relies on strategic buckets to achieve the right balance of projects and spending. Finally, tactical solutions include tracking the deploy...

Managing Project Portfolios

Abstract: OVERVIEW:The day-to-day management of a new product project portfolio is critical to its success. The management practices that are effective, however, depend on your objectives. Portfolios that best meet their objectives include a higher proportion of uncertain projects. Their managers allocate a higher proportion of core team members to those more uncertain projects, are more likely to leave some slack capacity when loading their portfolios, and empty the portfolio pipeline faster. Managers whose portfolios have a higher percentage of projects that succeed in the marketplace review their portfolios more frequently, are less tolerant of schedule slips, and increase resources to projects rather than let them slip. This study also shows that some practices are destructive no matter what the goals are, including switching team leaders and members in the course of a project, and stretching people and financial resources across too many projects.

How six sigma improves R&D

Abstract: MANAGERS AT WORK Many people claim that Six Sigma is not useful in research. For instance, in a recent Quality Digest article, Dick Dusharme quoted author and quality consultant Thomas Pyzdek as stating that he would never apply Six Sigma to research because it would kill creativity (1). The experienced R&D leaders who participated in the Industrial Research Institute's "Six Sigma in R&D" Workshop last March would likely disagree with Pyzdek (2). They shared demonstrated results from use of Six Sigma and Design for Six Sigma (DFSS) in R&D. They told us how they taught Six Sigma concepts to R&D technical staff, guided R&D's participation in corporate initiatives, and implemented Six Sigma without spending a fortune on relatively little-used tools. One reason the workshop participants would disagree with Pyzdek: They understand, and shared with the rest of us, the importance of distinguishing between Six Sigma as management strategy and 6sigma as statistical terminology. As a metric, 6sigma performance simply represents a level of 3.4 defects per million opportunities. But in the broader context of management strategy, the 6sigma metric is an anchor. That anchor provides focused identity and stability to management strategy for eliminating defects and extracting value from many industrial activities, including R&D. Six Sigma is focused on measuring process capability and motivating improved performance to eliminate defects. This focus on "elimination of defects" is relevant to many, but not all, processes within R&D. Random, seasonal and biased processes that occur in R&D (and elsewhere) are difficult to reconcile with the concept of "statistical control." So in an R&D context, Six Sigma represents a mindset that is a consequence of adopting 6a as a business performance standard. In Six Sigma, the focus is on problem definition and problem solving. To apply Six Sigma, problems have to be stated formally-in the manner of solving y = f(x), where y is the dependent variable and x is the independent variable. In formulating a Six Sigma problem, this usually means that y is a symptom, output or effect and x is a cause, input-and-process or a problem. The Six Sigma mindset gives us a measurable, goal-- oriented context for working on quality improvement in R&D. At the "Six Sigma in R&D" workshop, experienced R&D leaders taught us that Six Sigma has broad applicability in an R&D context because R&D is fundamentally a series of problem-defining and problemsolving processes. Workshop Participants The two-day workshop was hosted by Lubrizol Corporation at its headquarters near Cleveland, Ohio. Attending the conference were 140 Six Sigma practitioners and R&D leaders from 49 companies representing $0.9 trillion gross sales and $34 billion in R&D spending. Topics included metrics, impact ("how do we know it's working?"), alignment of Six Sigma with other company initiatives, and implementation. A survey of the participants indicated that only 37 percent had a formal Six Sigma program in their R&D organization. Otherwise: * 70% have a formal Six Sigma program in their company. * 29% have a formal DFSS program in R&D. * 50% use Six Sigma methods to improve R&D. * 76% have 25% or less of their company's employees involved in Six Sigma. * 76% have 25% or less of their R&D projects using Six Sigma or DFSS. Key Insights Companies that have formally implemented Six Sigma have done so for a variety of reasons. However, the themes of decreasing cost, increasing speed to market, and improving both process and product quality emerged as dominant reasons for organizations to formalize Six Sigma as corporate culture or mindset. Because of the focus and sponsorship that these themes require, most companies use a similar approach to their Six Sigma programs. …

Piloting the Rocket of Radical Innovation: Selecting the Right People for the Right Roles Dramatically Improves the Effectiveness of New Business Development

Abstract: For as in one body we have many members, and all the members do not have the same function.... Having gifts that differ according to the grace given us, let us use them (2). If we get the right people in the right job, we've won the game--Jack Welch (3). Staged processes with periodic management review gates for new business development (NBD) have been in existence for well over 50 years (4-7). Over half of all Fortune 500 companies are estimated to use such processes, which typically have 4 to 8 stages (8). Many excellent benchmarking studies over the last 50 years have focused on the factors associated with industrial NBD success across hundreds of projects. Virtually every study has found that the number one success factor at the project level is "product superiority," or "product advantage" (5,6,9-12). More recent studies at the company level by Cooper and Kleinschmidt show that the number one success factor is a high-quality NBD process (13). However, in spite of the innumerable changes in NBD thinking over the last 50 years, in spite of all of the NBD staged-gate processes that have been put in place, and in spite of the many studies of NBD success factors, the overall odds of success at the commercial launch stage have remained essentially unchanged. Only 60 percent of new product launches succeed, or one out of 1.7 launches (14). Indeed, a recent global study of 360 industrial firms launching 576 new industrial products confirms an overall success rate of 60 percent from launch. The success rate was close to the same in all the countries studied: The Netherlands (61 percent success), the United Kingdom (62 percent), and the United States (56 percent) (15). These success rates from launch are virtually identical to the success rates reported in the 1950s and 1960s (4,5,6). While much has changed "on the surface" of NBD during the last 50 years, it appears that the underlying success rates from launch have remained virtually unchanged. Based on these results, one might question whether significant progress in NBD has really been made. Yet, failures at launch continue to be very expensive because production plants have been built or a service has been fully designed and promotional dollars spent. While the cost of failure is less at the earlier stages of the NBD process, the failure rates at earlier stages are much higher, as shown in Figure 1, the "universal industrial success curve" for NBD projects involving substantially new-to-the-world products. The curve was developed from three distinct sources of information: 1) tracking the commercialization of patents; 2) venture capitalists' experience; 3) the project literature. The success rates found (as a function of the stage of the project) were remarkably similar in all three cases (14). The universal success curve is a benchmark that shows, for example, that the odds of commercial success for new-to-the-world products averages 1 in 300 at the idea submission stage (or at the patent disclosure stage), and 1 in 125 at the small project stage (or after a patent is granted). After Stage 4 of 7 stages, when a detailed analysis has been completed and an early-stage development effort is underway, the success curve shows that, on average, only one in nine projects or 11 percent is commercially successful. Even when a project reaches the stage of major development, the odds of success typically remain no greater than 1 in 4, or 25 percent (14). [FIGURE 1 OMITTED] Given that excellent NBD processes are often in place within major corporations today, as was the case in the company studied for the research reported here, the issue becomes how to further increase the productivity of these processes. With the success rates from launch essentially unchanged over the last 50 years, it is critically important to look for any factors that can improve success rates. Overlooked Human Factors The studies conducted to date show some of the things that can be done to increase the rate of NBD success. …

Roadmapping in the Corporation: Product-Technology Roadmaps Define and Communicate Product and Technology Strategy along with a Longer, Smarter View of the Future

Abstract: In a corporation, an important need for roadmapping is at the product-line level. Product-Technology Roadmaps in the corporate setting are used to define the plan for the evolution of a product, linking business strategy to the evolution of the product features and costs to the technologies needed to achieve the strategic objective. This article describes the experience of Lucent Technologies in deployment and use of the roadmapping methodology during the past several years. A small group shepherded the deployment and use of roadmaps during that time, and the format and application described here have evolved with the experience gained. Deploying roadmaps across a corporation helps achieve several key objectives. For each product line, roadmaps link market strategy to product plans to technology plans. Roadmaps created at the product line level are the base for corporate technology planning, identifying needs, gaps, strengths and weaknesses in a common language across the corporation. Roadmaps help focus attention on longer-term planning and improve communication and ownership of plans. Finally, the process helps focus a team's thinking on the few most important priorities at each step of the planning process: * Linking strategy to product plans to technology plans.--Creating the roadmap story means explicitly describing the why's for each key decision in the plan. Typically, strategies, product plans and technology plans are created independently by the people responsible for them. Roadmaps explicitly create the linkages, first linking strategic choices based on market needs and the competitive environment to product evolution and feature implementations, and then linking product plans to technology implementation plans. * Enabling corporate-level technology plans.--With roadmaps for several product lines, it is possible to look across the roadmaps for common needs that may be met by a single development program or technology acquisition. This can be done by analyzing a database of roadmaps or with cross-roadmap reviews where product teams come together to identify common needs. Time-to-market improvements and other platform opportunities can result. Besides overlaps, cross-roadmapping activity can address hidden gaps and identify key strengths that can be deployed in other areas of the business. * Focus on longer-term planning.--Today's business climate can lead to a focus on short-term thinking, often tied to the reporting needs of the budget cycle or the next deliverable. Roadmapping helps to focus the attention of the team on future product generations, initiating longer-term projects or technology acquisitions so that their outputs will be ready when needed. For technologies with long lead times, the choice to develop or acquire is a near-term decision with long-term consequences. * Improving communication and ownership of plans.--The use of a cross-functional team to create a product line plan allows the members of the team to develop a shared plan. All share in the creation of the plan, developing ownership across functions. Roadmapping provides a common vocabulary that is shared across the team with diverse backgrounds such as product management, marketing, sales, research and development, manufacturing, project management, logistics, etc. The team develops its roadmap in a step-by-step fashion, building on each team member's special knowledge. The process is usually iterative, as the team realizes that the plan it has set out is not feasible or that there is a better alternative. * Focus planning on the highest-priority topics.--A key goal of roadmapping is to identify and focus strategy and product development on the few most important elements for success. At every stage of roadmap development, the group strives to define the two or three most important drivers, elements or issues. In this way, the focus is kept on identifying the highest priorities. As the roadmap is developed and implemented, the team identifies gaps and the actions to close the gaps. …

Technology Roadmapping: Starting-Up Roadmapping Fast

Abstract: A company-specific process for the rapid initiation of roadmapping encourages learning and staff involvement, and identifies key issues, knowledge gaps and actions. Technology roadmapping is a powerful technique for supporting technology management and planning in the firm. Although roadmaps can take various forms (1-6), the most common approach is encapsulated in the generic type proposed by EIRMA (6). The generic roadmap is a time-based chart, comprising a number of layers that typically include both commercial and technological perspectives (Figure 1). The roadmap enables the evolution of markets, products and technologies to be explored, together with the linkages between the various perspectives. A recent survey of 2,000 manufacturing firms in the United Kingdom indicates that about 10 percent of companies (mostly large) have applied the technology roadmapping approach, with approximately 89 percent of those companies using the technique more than once, or on an ongoing basis. However, application of the roadmapping approach presents considerable challenges to firms, because the roadmap itself, while fairly simple in structure and concept, represents the final distilled outputs from a strategy and planning process. Key challenges reported by survey respondents included keeping the roadmapping process "alive" on an ongoing basis (50 percent), starting up the process (30 percent) and developing a robust method (20 percent). This article describes a process called T-Plan, which has been developed to support the rapid initiation of roadmapping and thereby address these challenges (7). T-Plan Fast-Start Process The aims of the T-Plan process are to: * Support the start-up of company-specific roadmapping processes. * Establish key linkages between technology resources and business drivers. * Identify important gaps in market, product and technology intelligence. * Develop a "first-cut" technology roadmap. * Support technology strategy and planning initiatives in the firm. * Support communication between technical and commercial functions. The "standard" process aims to support product planning and is based on four facilitated workshop (see Figure 2). The process is flexible in terms of time, resources and focus, and the workshops can be modified, extended or compressed depending on the intended purpose, available information and the unit of analysis. The main elements of the process are summarized in the following sections, illustrated with examples from an application in Domino Printing Sciences plc. Several factors should be considered prior to initiation of the roadmapping workshops, including: * The unit of analysis (scope and focus). * Clear articulation of company objectives for the process. * Appropriate participants. * Information required to support the process. * Required resources and scheduling of workshops. Workshop participants should include both technical and commercial functions (such as research, development, manufacturing, marketing, finance, and human resources). Continuity of participation is desirable, at least for a core group of participants. Establishing the objectives for the process is important as a means for judging success, together with ensuring that the focus of the process is appropriate. Coordination is a key element of the T-Plan approach, with the need to ensure that the process is continually aligned with company needs (coordination points are included between each step), as the results from each workshop cannot always be predicted in advance. The first workshop ("Market") aims to establish a set of prioritized market and business drivers for the future, reflecting external and internal factors. The "performance dimensions" that drive product development within the business are considered first (for example, speed, weight, reliability, and aesthetics). …

Leading Global Product Development Teams

Abstract: More and more firms face the need to access a critical resource for new product development--people who are dispersed around the world. Not only are these new-product developers separated by time and distance but they are separated by cultural and language differences as well. The challenge for their leaders is to integrate and coordinate these individuals and their activities by forming global teams of nationals from a variety of countries. Like other types of product development teams, global teams experience the challenge of getting a diverse group of individuals from different functional areas to work together effectively for a finite period of time to accomplish specific project objectives. These teams must build trust among team members, meet schedules and adhere to budget guidelines. Global product development teams face additional challenges, however: physical distance, cultural diversity, language barriers, and technological infrastructure differences. And, because global team members are from different countries, they are unlikely to know one another, may never meet or else meet infrequently, may be more or less fluent in the team's "common" language, and are likely to have strikingly different work, communication and decision-making norms (1). In light of the critical role that global teams play in NPD, it is surprising that our understanding of how to manage them effectively has not kept pace with their increasing use. While this may simply reflect the difficulty of managing teams whose members are scattered across the globe, developing an appreciation of how to manage these teams is critical (2,3). Firms that fail to develop this capability may find themselves at a competitive disadvantage. To close this gap in our understanding, we undertook a study that sought to understand why companies use global teams, the challenges that managers and project leaders face in leading global teams, and the practices that they use to do so successfully (See "How the Study Was Conducted," next page). Global Team Usage The managers we surveyed indicated that there were four principal reasons for using global teams: 1. To address global markets/customers by identifying common product platforms.--Two competing needs have driven the increasing use of global teams. On the one hand is the need to develop a global product, i.e., one that can be sold in a number of countries with little customization. As one respondent noted, "Product definition and market attractiveness needs to be global--the regional/country mindset must be replaced by global priorities." For these managers, the value of global teams lies in their ability to identify a common product platform that will appeal to customers in many different countries. 2. To identify and incorporate unique needs and requirements of local markets.--On the other hand is the need for products tailored to the unique needs and requirements of a local market. Because they are from different countries and cultures, the inputs and insights of global team members can be used to identify and incorporate the market needs and requirements of their different countries into a new product. The beauty of a global team is that, properly managed, these insights can not only be used to identify different needs, but to develop common product platforms. Thus, global teams can implement two different yet potentially complementary marketing strategies. 3. To capitalize on globally distributed "Centers of Excellence."--Global teams allow a company to leverage expertise that exists in different countries, rather than attempting to collect that expertise at a single site by relocating team members. Not only does this save enormous costs, but it also saves wear and tear on a team member's personal life. 4. To bring together dispersed resources.--By bringing individuals together "virtually," global teams allow companies to take advantage of lower manufacturing costs in one country, the central location of a distribution center in another, research skills in still another, and "on site" sales offices. …

Technology Roadmapping: Roadmapping the Corporation

Abstract: Product-technology roadmaps define and communicate product and technology strategy along with a longer, smarter view of the future. In a corporation, an important need for roadmapping is at the product-line level. Product-Technology Roadmaps in the corporate setting are used to define the plan for the evolution of a product, linking business strategy to the evolution of the product features and costs to the technologies needed to achieve the strategic objective. This article describes the experience of Lucent Technologies in deployment and use of the roadmapping methodology during the past several years. A small group shepherded the deployment and use of roadmaps during that time, and the format and application described here have evolved with the experience gained. Deploying roadmaps across a corporation helps achieve several key objectives. For each product line, roadmaps link market strategy to product plans to technology plans. Roadmaps created at the product line level are the base for corporate technology planning, identifying needs, gaps, strengths and weaknesses in a common language across the corporation. Roadmaps help focus attention on longer-term planning and improve communication and ownership of plans. Finally, the process helps focus a team's thinking on the few most important priorities at each step of the planning process: Linking strategy to product plans to technology plans.-Creating the roadmap story means explicitly describing the why's for each key decision in the plan. Typically, strategies, product plans and technology plans are created independently by the people responsible for them. Roadmaps explicitly create the linkages, first linking strategic choices based on market needs and the competitive environment to product evolution and feature implementations, and then linking product plans to technology implementation plans. Enabling corporate-level technology plans.-With roadmaps for several product lines, it is possible to look across the roadmaps for common needs that may be met by a single development program or technology acquisition. This can be done by analyzing a database of roadmaps or with cross-roadmap reviews where product teams come together to identify common needs. Timeto-market improvements and other platform opportunities can result. Besides overlaps, cross-roadmapping activity can address hidden gaps and identify key strengths that can be deployed in other areas of the business. Focus on longer-term planning.-Today's business climate can lead to a focus on short-term thinking, often tied to the reporting needs of the budget cycle or the next deliverable. Roadmapping helps to focus the attention of the team on future product generations, initiating longerterm projects or technology acquisitions so that their outputs will be ready when needed. For technologies with long lead times, the choice to develop or acquire is a near-term decision with long-term consequences. Improving communication and ownership of plans.The use of a cross-functional team to create a product line plan allows the members of the team to develop a shared plan. All share in the creation of the plan, developing ownership across functions. Roadmapping provides a common vocabulary that is shared across the team with diverse backgrounds such as product management, marketing, sales, research and development, manufacturing, project management, logistics, etc. The team develops its roadmap in a step-by-step fashion, building on each team member's special knowledge. The process is usually iterative, as the team realizes that the plan it has set out is not feasible or that there is a better alternative. Focus planning on the highest-priority topics.-A key goal of roadmapping is to identify and focus strategy and product development on the few most important elements for success. At every stage of roadmap development, the group strives to define the two or three most important drivers, elements or issues. …

The Chief Technology Officer: Strategic Responsibilities and Relationships

Abstract: OVERVIEW:The significant role of technology in strategic business decisions has created the need for executives who understand technology and recognize profitable applications to products, services and processes Many companies have addressed this need through the appointment of a chief technology officer (CTO) whose responsibilities include: monitoring new technologies and assessing their potential to become new products or services; overseeing the selection of research projects to ensure that they have the potential to add value to the company; providing reliable technical assessments of potential mergers and acquisitions; explaining company products and future plans to the trade media; and participating in government, academic and industry groups where there are opportunities to promote the company's reputation and to capture valuable data Integrating these technology-based activities into the corporate strategy requires that the CTO nurture effective relationships with key people throughout the compa

Better Forecasts, Better Plans, Better Results

Abstract: Enhance the validity and credibility of your forecasts by structuring them in accordance with the five different ways people view the future. Overview: The value that decision makers place on formal forecasts-and the extent to which they act on those forecasts-depends on their conviction that the forecast is supported by credible data, treated in a logical manner. Structuring forecasts in accordance with the different ways that people view the future can enhance both the validity and credibility of the forecasts. These viewpoints can be classified into five categories: extrapolators, pattern analysts, goal analysts, counterpunchers, and extrapolators. Although there are circumstances under which each of the different ways of viewing the future is most appropriate, the likelihood of a successful forecast is greatly increased when techniques from several of these viewpoints are used in concert. Society's long-term ambivalence about projections of future developments is illustrated by the intriguing fact that at the time Greek city states were basing their military strategies on the predictions of the Oracle at Delphi, the Roman Emperor Justinian decreed the death penalty for anyone engaged in forecasting. (Given Rome's subsequent conquest of Greece, it doesn't appear that the entrails-readers provided much help.) In reality, of course, all important business decisions are based, in large measure, on how decision-makers foresee developments in market demand, competitive threats, new technologies, financial realities, regulatory restrictions, social mores, and a host of other influencing factors. The key question, therefore, is not whether executives use forecasts, but rather, how they formulate their views of the future and how they act on these views. The value that decision makers place on formal forecasts-and the extent to which they act on these forecasts--depends on their conviction that credible data, treated in a logical manner, support the forecasts: credible and logical in the mind of the decision-maker, not necessarily in the mind of the forecaster. Therefore, to be useful, a forecast must be both valid-based on solid facts and proven analytical techniques-and credible, meaning convincing to the people making decisions. The term "valid" instead of "accurate" is used deliberately here. Although all forecasters would prefer that their projections be accurate, actually, the value of a forecast depends not on its specific accuracy but, rather, on the extent to which it contributes to better decisionmaking. In forecasting, being approximately right is always better than being precisely wrong. In fact, the best forecasts are often never borne out because the decision makers have acted to prevent unfavorable predictions from happening. Structuring forecasts in accordance with the different ways that people view the future can enhance both the validity and credibility of the forecasts. These views can be classified into five categories: Extrapolators. Pattern analysts. Goal analysts. Counter-punchers. Intuitors. Each of these views has both strengths and shortcomings that motivate their use under certain circumstances and discourage their use in others. There are specific methods and techniques recognized in the forecasting field that can be associated with each category, and each has its supporters and detractors. Almost everyone feels most comfortable with one or another of these views. Although there are no hard-and-fast rules, it seems that most engineers are basically extrapolators, most pure scientists are primarily pattern analysts, and most marketing people are goal analysts. The majority of executives appear to be intuitors, although, interestingly, many characterize themselves as counter-punchers. These five approaches, individually and in concert, can provide the foundation for a powerful forecasting program. …

Turn Diversity to Your Advantage

Abstract: OVERVIEW: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.

Post-project reviews in R&D

Abstract: Post-project reviews - sometimes called post-mortems - are opportunities to improve performance in subsequent R&D projects. However, most companies have not established a structured approach to learning from projects after their completion. Even worse, most projects that have been prematurely terminated never undergo a retrospective analysis of what caused them to fail. A recent survey indicated that 80% of all R&D projects were not reviewed at all after completion, and most of the remaining 20% were reviewed without established review guidelines. Companies that neglect post-project reviews as a tool for systematic inter-project learning throw away invaluable potential for competence building. A five-level post-project process model is presented that helps to build such a learning organization in R&D: 1. initial review practice, 2. repeatable review processes, 3. defined review standards and processes, 4. managed review capability, and 5. optimizing review maturity.

Risk-adjusted Valuation of R&D Projects

Abstract: 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 ...

Managers at Work: How Do You Best Organize for Radical Innovation?

Abstract: In an era when so many large companies seek growth through technology-driven new product breakthroughs, some question whether these companies can innovate fast enough to create such step-out growth. Such questioning has led an Industrial Research Institute Research-on-Research subcommittee to study how companies organize to support successful radical innovations (1). The subcommittee began by collecting tacit knowledge possessed by 40 IRI member companies about how to best organize to create breakthrough innovations in medium-to-large companies (2). We share this information here but emphasize that there are many opinions on this topic and we don't claim to have made groundbreaking discoveries. We do, however, believe there is value in summarizing the factors a group of managers feel are most important and in encouraging readers to use this information to spark their thinking about what is most appropriate within their own organizations. What is Radical Innovation Anyway? In the IRI, we have defined a radical innovation project as one with the potential to produce one or more of the following: * An entirely new set of performance features. * Greater than five-fold improvements in known performance features. * A significant reduction in cost (>30 percent). Others use different terms, such as \"step-out innovation\" or \"break-out results.\" The exact term is not critical-the key point is that we focus here on significant changes, not incremental innovation. Key Themes Several themes emerged repeatedly in the many discussions we have had with R&D directors and managers who possess many years of collective experience. Below, we highlight the most striking ones and comment on what further research might be undertaken. 1. Senior management must be passionate. The support, involvement, commitment, and championing of the CEO and senior management is perhaps the most critical success factor. The role of radical innovation in accomplishing the company's long-term strategies and objectives must be clearly stated and reinforced at all levels. Adequate funding should be provided and sustained, even in difficult economic times. This funding should not be discretionary for the business units in the early stages of projects. Patience and a long-term perspective are key. \"Corporate Courage: Breaking the Barrier to Innovation,\" by Mel Perel (RTM, May-June 2002, pp. 9-13) addresses this issue very appropriately. Potential research topic: \"How can technology managers engage the CEO and senior managers as champions of radical innovation?\" 2. Set extraordinary goals, with \"close enough \"fit. Challenge the organization to do more than it thinks it can. A key challenge for management is to find the right level of challenge: enough to stimulate extraordinary results, yet not too much to paralyze or break the organization. Avoid incrementalism. Goals should be consistent with and enable the accomplishment of the organization's business objectives and strategies. Recognize, however, that many radical innovation projects will not be successful. Financial goals or expectations should therefore be based upon a portfolio and not individual projects. \"Real options\" methodology may be helpful here. Potential research topic: \"Stretching but not breaking the organization: motivating for radical results.\" 3. Create the right environment. There are several ways to create the right environment for radical innovation: Physical Protection.-Groups can be protected so that concepts can incubate and develop. Protection can be in the form of physical isolation, or insulating the organization to minimize distractions and pressures. When possible, it is recommended to spin the groups out from the conventional internal organization. Psychological Support.-A spirit of persistence and patience is critical. …

Technology Roadmapping: Frontier Experiences from Industry-Academia Consortia

Abstract: Corporate roadmappers create value with product and technology roadmaps. OVERVIEW: Technology roadmapping has been applied successfully in many industrial organizations. Designed to facilitate and communicate technology strategy and planning, roadmaps (or, as in Europe, route maps) can take a variety of specific forms, depending on the type (opportunities, capabilities, products, technologies, etc.) and particular company context. While roadmaps are generally manifest in a number of program elements or levels" superimposed upon a timeline, experienced mappers often claim that it is "roadmapping" rather than "the roadmap" that generates the value. This special report focuses primarily on product and technology roadmaps. Following an introduction to the evolution, purpose and applications of corporate/industry roadmapping, four industry-developed articles examine roadmapping in Lucent Technologies, Rockwell Automation, the pharmaceutical/biotechnology industry, and UK-based Domino Printing Sciences. A roadmap, in its most general definition, is the view of a group of stakeholders as to how to get where they want to go-to achieve their desired objective. The purpose of a roadmap is to help the group make sure the right capabilities are in place at the right time to achieve this objective. This very general definition of a roadmap captures the essence of roadmapping-developing a common view within a team about their future and what they want to achieve in that future. Roadmapping is a learning process for a group, in that members discover gaps and new directions. The planning activity helps the group develop a common language and thereby improve communication among its members. A roadmap can also help the group communicate its vision and plan to customers, suppliers, partners, and other groups. Roadmaps have a variety of applications. For example, a roadmap can be used to describe the past or future development of a field of science or technology in which there may be an optimal evolution path among several alternatives. Or, roadmapping can be used to describe the future path of progress in an industry. For example, the Semiconductor Industry Roadmap describes the next ten years of progress in semiconductors, and several industry roadmaps have been developed under the leadership of the U.S. Department of Energy's Office of Industrial Technology. In a corporation, an important need for roadmapping is often at the product-line level, to define the plan for the evolution of a product, linking business strategy to the evolution of the product features and costs to the technologies needed to achieve the strategic objective. The roadmap combines internal development needs with a marketplace view of technology trends. Roots of Roadmapping While the field had its early roots in the US. automotive industry, it was Motorola and Coming that first championed roadmapping approaches in the late 1970s and early 1980s. Coming advocated a critical events mapping approach to corporate and business unit strategy; Motorola undertook a technology evolution and positioning approach. The Motorola approach has been more visible in the U.S. practice of technology management. Under the leadership of its then-CEO Robert Galvin, Motorola initiated a corporate-wide process with the stated purpose of "encouraging our business managers to give proper attention to their technological future, as well as to provide them with a vehicle with which to organize their forecasting process" (1). The approach was introduced to help balance long- and short-range issues, strategic and operational matters with technology and other disciplines in the company. The seminal Willyard and McClees 1987 Research Management paper describing Motorola's use and approach was the first to appear on the subject (1). The account states that roadmapping "provides a means of communicating to the design and development engineers and to the market personnel, which technologies will be requiring development and application for future products. …

Web-enabled innovation in new product development

Abstract: A Web of Innovation model will help your organization to assess its use of software tools in the NPD process. OVERVIEW: Knowledge management in the innovation process has become inextricably linked with intranets, with the Internet, and with networks public and private. This study takes the concept of knowledge flow for the new product development (NPD) process reported previously and considers the application of Web-based tools and methods to it (Web-enablement). A model, called the Web of Innovation, will permit an organization to benchmark and develop its own e-knowledge management program for the NPD process. A survey of software tools for enabling the web-based management of innovation within NPD shows that the most useful tools are not the most highly used, and commercial tools will usually require customization. Metrics have been difficult to apply to the use of these tools, and quantification of bottom-line impact remains elusive. This article develops a model of the web-enablement of the innovation process that we call the "Web of Innovation." It reflects the evolution of the knowledge flow process described in an earlier RTM article (1) into a web-enabled (and then, web-driven) process. It also provides a basis for further innovation in the design of web-based tools. Setting the Stage The aforementioned knowledge flow process describes the stages of knowledge transactions within the innovation process (e.g., creation, communication, usage, regeneration). It represents a formalization of the process of knowledge management within the R&D environment consistent with process formalizations like Stage Gate(TM) (2), portfolio management and their sub-processes. Three primary enablers of knowledge flow were identified in the previous RTM paper: culture, infrastructure and technology (specifically, Information Technology). Of these, culture is the most important as well as the most difficult to manage. Information Technology (IT) is perhaps the least important of the primary drivers but the easiest with which to develop commercial offerings to assist the NPD and other processes of the model. Not surprisingly, there has been explosive growth in the range of software and web-based tools available to manage the knowledge flow process. Some aim at the management of the ideation process (3), some at the NPD process, and some at the new-product commercialization process and portfolio management. Software tools from 3DKMG, Sopheon, Gensight, IDe, Novare, Value Innovations, and others fall into this group. Other tools manage the knowledge base itself, both tacit and explicit knowledge, including intellectual property (one's own company and that of competitors). Other developments attempt to bridge the divide between in-house innovation and that undertaken by partner organizations by offering technology synergy through a range of tools and effectively blurring the differences between the two. Tools from organizations like MicroPatent, Yet2.com, PLX, Delphion, and Invention Machine fall into this category. Our earlier paper delivered a strong caveat: IT tools are not in themselves knowledge management, despite the marketing message from software developers that each tool is essentially equivalent to knowledge management. Why, then, focus on this particular enabler? The answer, we submit, lies in the (supposed) ability of the IT tools to enable the innovation process (i.e., improve the quality, speed to market and profitability obtained from the NPD process). Dustdar and Ruppel have more general discussions of the place of software tools in knowledge management and the knowledge flow process, especially the interplay of tools and culture (4,5). Evaluating Software Tools We propose that the Web of Innovation Model, explained below, mirrors the process of globalization or "metanationalization" (6). Globalization in this sense describes much more than the operations of large companies, which have long operated all over the world. …

Launch Your New Products/Services Better, Faster

Abstract: OVERVIEW:By studying the practices of 117 new product teams from AT&T, Allied Signal, Digital Equipment, IBM, Motorola, and other companies, several factors were found that can help teams develop new products and services better and faster, with a greater probability of succeeding. Factors influencing new product success include: 1) teamwork, 2) market niche assessment, 3) cross-team communication, 4) clear project vision, and 5) limiting formal within-team communications. Factors influencing speed-to-market include: 1) teamwork, 2) rapid prototyping, 3) team empowerment, 4) vision support, and 5) an aggressive launch deadline.

Managers at Work: How Six Sigma Improves R&D

Abstract: (2003). Managers at Work: How Six Sigma Improves R&D. Research-Technology Management: Vol. 46, No. 2, pp. 12-15.

How do you best organize for radical innovation

Abstract: In an era when so many large companies seek growth through technology-driven new product breakthroughs, some question whether these companies can innovate fast enough to create such step-out growth. Such questioning has led an Industrial Research Institute Research-on-Research subcommittee to study how companies organize to support successful radical innovations (1). The subcommittee began by collecting tacit knowledge possessed by 40 IRI member companies about how to best organize to create breakthrough innovations in medium-to-large companies (2). We share this information here but emphasize that there are many opinions on this topic and we don't claim to have made groundbreaking discoveries. We do, however, believe there is value in summarizing the factors a group of managers feel are most important and in encouraging readers to use this information to spark their thinking about what is most appropriate within their own organizations. What is Radical Innovation Anyway? In the IRI, we have defined a radical innovation project as one with the potential to produce one or more of the following: * An entirely new set of performance features. * Greater than five-fold improvements in known performance features. * A significant reduction in cost (>30 percent). Others use different terms, such as "step-out innovation" or "break-out results." The exact term is not critical-the key point is that we focus here on significant changes, not incremental innovation. Key Themes Several themes emerged repeatedly in the many discussions we have had with R&D directors and managers who possess many years of collective experience. Below, we highlight the most striking ones and comment on what further research might be undertaken. 1. Senior management must be passionate. The support, involvement, commitment, and championing of the CEO and senior management is perhaps the most critical success factor. The role of radical innovation in accomplishing the company's long-term strategies and objectives must be clearly stated and reinforced at all levels. Adequate funding should be provided and sustained, even in difficult economic times. This funding should not be discretionary for the business units in the early stages of projects. Patience and a long-term perspective are key. "Corporate Courage: Breaking the Barrier to Innovation," by Mel Perel (RTM, May-June 2002, pp. 9-13) addresses this issue very appropriately. Potential research topic: "How can technology managers engage the CEO and senior managers as champions of radical innovation?" 2. Set extraordinary goals, with "close enough "fit. Challenge the organization to do more than it thinks it can. A key challenge for management is to find the right level of challenge: enough to stimulate extraordinary results, yet not too much to paralyze or break the organization. Avoid incrementalism. Goals should be consistent with and enable the accomplishment of the organization's business objectives and strategies. Recognize, however, that many radical innovation projects will not be successful. Financial goals or expectations should therefore be based upon a portfolio and not individual projects. "Real options" methodology may be helpful here. Potential research topic: "Stretching but not breaking the organization: motivating for radical results." 3. Create the right environment. There are several ways to create the right environment for radical innovation: Physical Protection.-Groups can be protected so that concepts can incubate and develop. Protection can be in the form of physical isolation, or insulating the organization to minimize distractions and pressures. When possible, it is recommended to spin the groups out from the conventional internal organization. Psychological Support.-A spirit of persistence and patience is critical. …

Frontier Experiences from Industry-Academia Consortia: Corporate Roadmappers Create Value with Product and Technology Roadmaps

Abstract: A roadmap, in its most general definition, is the view of a group of stakeholders as to how to get where they want to go--to achieve their desired objective. The purpose of a roadmap is to help the group make sure the right capabilities are in place at the right time to achieve this objective. This very general definition of a roadmap captures the essence of roadmapping--developing a common view within a team about their future and what they want to achieve in that future. Roadmapping is a learning process for a group, in that members discover gaps and new directions. The planning activity helps the group develop a common language and thereby improve communication among its members. A roadmap can also help the group communicate its vision and plan to customers, suppliers, partners, and other groups. Roadmaps have a variety of applications. For example, a roadmap can be used to describe the past or future development of a field of science or technology in which there may be an optimal evolution path among several alternatives. Or, roadmapping can be used to describe the future path of progress in an industry. For example, the Semiconductor Industry Roadmap describes the next ten years of progress in semiconductors, and several industry roadmaps have been developed under the leadership of the U.S. Department of Energy's Office of Industrial Technology. In a corporation, an important need for roadmapping is often at the product-line level, to define the plan for the evolution of a product, linking business strategy to the evolution of the product features and costs to the technologies needed to achieve the strategic objective. The roadmap combines internal development needs with a marketplace view of technology trends. Roots of Roadmapping While the field had its early roots in the U.S. automotive industry, it was Motorola and Corning that first championed roadmapping approaches in the late 1970s and early 1980s. Coming advocated a critical events mapping approach to corporate and business unit strategy; Motorola undertook a technology evolution and positioning approach. The Motorola approach has been more visible in the U.S. practice of technology management. Under the leadership of its then-CEO Robert Galvin, Motorola initiated a corporate-wide process with the stated purpose of "encouraging our business managers to give proper attention to their technological future, as well as to provide them with a vehicle with which to organize their forecasting process" (1). The approach was introduced to help balance long- and short-range issues, strategic and operational matters with technology and other disciplines in the company. The seminal Willyard and McClees 1987 Research Management paper describing Motorola's use and approach was the first to appear on the subject (1). The account states that roadmapping "provides a means of communicating to the design and development engineers and to the market personnel, which technologies will be requiring development and application for future products." Not mentioned at the time, but ultimately critical, roadmapping had the potential to act as an integrative linch-pin process as firms increasingly sought to gain control of, and make more focused, the development and deployment of technology through stage-gate and a variety of other management processes. The Motorola model and experience were to become the foundation upon which the U.S. approach and contribution has continued to evolve. To illustrate (as will be seen in the article by McMillan on page 40), it was exposure of top management to what Motorola was doing with roadmapping that led directly to its adoption by Rockwell Automation in 1995. It could be said that the upsurge in interest in roadmapping that surfaced in the 1990s was a direct consequence of the ever-shortening product development cycle times, creating a greater need for coordination (i.e., customer desires to build new technologies into products as soon as they are available). …

Purchasing Joins the NPD team

Abstract: With firms under pressure to reduce costs and improve product quality, the role of purchasing is evolving from simply buying a product or service to sourcing it. Fortune 500 firms such as DaimlerChrysler (1) have positioned the purchasing function as the gatekeeper of quality and total cost, viewing it as a strategic contributor and partner to marketing, manufacturing and engineering in interdisciplinary new product development teams. (See "Purchasing and New Product Development," next page.) Although many benefits accrue from the integration of purchasing into the new product development (NPD) process, there may be conditions under which greater integration is not appropriate. Specifically, we suspect that firms developing products of high technical complexity and engineering input time (such as custom-engineered equipment) may be poor candidates for such integration. We explored this idea by examining three U.S. companies (Gerber Products Corporation, Stryker Corporation and Amway), assessing the level of purchasing integration and the contribution made by the purchasing department. In this article, after examining each company, its NPD process, and the role played by purchasing at the time of the study, we make cross-company comparisons, and conclude with observations regarding the importance and value of purchasing integration and its implications for management. Much of our information was collected via telephone interviews with purchasing management at each company. One senior-level purchasing manager (the director of purchasing or equivalent) was selected as the contact within each company. A survey was faxed to each contact prior to the interview to facilitate information gathering during the interview. Financial reports and current articles were gathered to supplement the telephone interviews. No financial information was available for Amway as that information was proprietary. Gerber Products Company Located in Fremont, Michigan, Gerber markets products and provides services for families with infants and small children. The company's baby care group develops between 40 and 50 new products annually, the majority generated from market research and competitive practices. For example, if a competitor's product demonstrates strong market growth potential, a similar Gerber product is designed and investigated. In addition, ideas are generated via focus groups and customer iterations. The Gerber NPD process consists of six stages. The first, Concept Generation, is initiated after the new product idea is conceived. After an idea is generated, market research is conducted to determine if Gerber can market a competitive product. The second stage, Market Research, is conducted using focus groups, market trends analysis, Nielsen market information, and other traditional marketing techniques. Should a competitive product appear likely, a New Product Development Team is formed, with members from Manufacturing, Contract Manufacturing or CM (Purchasing), Engineering, Marketing, and Finance. The NPD Team takes ownership over the concept and advances it to the third stage, Development. The NPD Team uses the market research to approximate product features such as shape, size, color, and weight. A preliminary cost range is identified but not shared with potential suppliers. Requests for Proposals (RFPs) are typically sent to two external suppliers, called "contract manufacturers," and to the Gerber in-house manufacturing division. The number of suppliers is limited because only a few suppliers have the ability to manufacture Gerber products. To increase the competitive nature of the sourcing process, the in-house manufacturing unit must compete with the contract manufacturers, who are treated as part of the Gerber company. Product Testing, the next phase, is when the chosen design is produced and tested for potential problems. Manufacturability issues such as design and defects, potential cost savings, as well as any marketing or regulatory concerns are examined at this time. …

The seventh rule: Create a learning culture

Abstract: THE HUMAN SIDE When you focus on the human side of your work, what are the most important issues for you? A recent study by an international consulting company cites as most important "improving teamwork between supervisors and subordinates" and "improving skills regarding the performance management of subordinates." But why do we keep coming back to these issues? Stacks of books and articles offer advice on how to improve teamwork and how to manage and motivate. The answer, I believe, is that the advice is usually limited to improving relationships between individuals when these issues call for developing the organizational culture in which these relationships take place. This is the culture of a learning organization. There are six rules that I believe a supervisor can follow to improve teamwork with subordinates. But their full effectiveness depends on the seventh rule of building a learning organization. This is something individual supervisors cannot do by themselves. Here are the rules. 1. Describe the purpose of the work you and the team are doing. What are you trying to achieve? Who are your potential customers and how will you create value for them? When people are clear about the purpose of their work, they are better able to understand their manager's concerns. When they are not clear about purpose, they don't feel part of a team. Furthermore, they won't think about innovative ways to achieve purposes they don't understand. 2. Clarify roles and responsibilities. Let people know who the team members are and how their roles relate to one another. When roles are unclear, people don't feel empowered to take responsibility. Or if the role is unclear, people may bump into each other's territory, causing unnecessary conflicts that undermine teamwork. If a second baseman and a shortstop don't understand each other's role and responsibilities, that baseball team can't execute double plays. Make sure the role fits the person. If people lack the needed competence, they won't be able to perform. If the role isn't challenging, they won't be motivated. In technology organizations, it's a good bet that subordinates know more about their jobs than their managers do. Your managerial role is to clarify goals and facilitate teamwork by following these rules. 3. Make sure managers and subordinates understand each other's personality. You may be motivated in different ways. It makes a big difference if one person is a loyal productive obsessive who pushes for perfection according to inner standards while the other is a productive marketing personality, interested in what will sell and with a self-image as a free agent, always seeking better opportunities, either inside or outside your organization. You can find these types, as well as descriptions of visionary narcissists and the caring erotic in my book The Productive Narcissist (see p. 62, this issue). This book includes a questionnaire to discover your own personality type and its significance for relationships at work. The more you understand each other, the better able you will be to communicate and to avoid conflicts. 4. Communicate and facilitate communication. You can never communicate too much when it is a question of how work is progressing, what are the problems encountered, and what is needed from each person. The best teams have the most open communication and don't avoid creative conflict. A few years ago, I interviewed technology managers in Europe, Asia and the United States. I found the German team was most effective because managers allowed constructive debate based on facts and transparent logic. However, once a decision was made, they fully supported it. In contrast, members of the American team avoided conflict. Some went along, even if they were not convinced about a project's logic, and others got themselves transferred from projects they believed would fail. To avoid this happening, managers have to seek the views of team members, even if they may not like what they hear. …

Measuring R&D in 2003

Abstract: 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 optimize R&D's pro

Using the Internet in New Product Development

Abstract: MANAGERS AT WORK The speed, convenience, interactivity, and worldwide coverage of the Internet match the requirements of the different activities in the new product development (NPD) process, which involves uncertainties and risks and requires firms to take into account the views of customers and to introduce their new products to the market fast (1-3). This article highlights the role that the Internet can play in the different stages of the NPD process and identifies related opportunities and constraints based on industry examples. Research has consistently shown that a high-quality process is one of the most critical success factors in new product development (4-6). Although different firms may adopt different types of NPD process, the typical process generally includes such discrete and identifiable stages as the preliminary investigation, detailed investigation, development, testing and validation, and market launch (4). Activities at each stage are undertaken by cross-functional teams and conducted both sequentially and simultaneously. Throughout these phases, strategic decisions are made about whether to go ahead with a new project, modify it or kill it. The following sections examine these phases in more detail and explain how the Internet can be used at each step to enhance the effectiveness of the NPD process, along with some limitations associated with using it at each stage. Preliminary Investigation This stage involves "up-front" market, technical and financial assessments of new product ideas. As its title implies, this stage deals with an initial evaluation of new product ideas and preliminary appraisal of other potential factors that might affect the success of the new product ideas under consideration (4). Every new product starts with an idea, and companies at this stage generate as many ideas as possible for further consideration. Indeed, numerous experiments have shown that online idea-generation sessions generate more unique and quality ideas than do face-to-face sessions and that the participants are significantly more satisfied with this type of meeting (7). Thus, the Internet can offer a viable platform for electronic idea generation by individuals in different parts of the world. Companies are increasingly using the Internet for this purpose. For example, Polaroid Corp. used Internetbased methodologies to develop its highly popular i-Zone, which prints mini-photos that can be stuck anywhere. The company asked several hundred representatives of its target population to visit a private online research site and assemble their ideal i-Zone with different features that they valued. The results suggested that the respondents viewed the product as a fashion accessory and wanted "cool" styles. These characteristics of i-Zone were totally inconsistent with the features that some Polaroid engineers originally envisioned, which were more technical and costly. The Internet allowed the company to understand its customers better and thus design the products they wanted (8). Although the Internet can help firms generate new product ideas effectively and efficiently, firms still worry that people who take part in online idea generation sessions may not represent the target customers. Compared to others, these people are usually more comfortable with computers. However, if the potential buyers of a new product do not fit into such a profile, firms may not be able to learn their opinions. Indeed, even Polaroid Corp. had to use other more traditional market research techniques along with the Internet to have a better representative sample and to validate the results of the online idea generation (8). At the preliminary investigation stage, the Internet can also allow companies to collect market intelligence and identify market trends, thus being able to assess the viability of their new product ideas more effectively before making substantial commitments to further development of these ideas. …

Making Research Collaborations Succeed

Abstract: Despite the boom in alliance formation over the past decade, at least half reportedly failed to meet their participants' objectives. In this article, I offer some perspectives on how to improve the probability of success for a specific kind of alliance: research collaborations between small and large companies. Differing from traditional contract research, where a third-party company or university is paid to conduct research and furnish the results and intellectual property rights to the payer, a true collaboration is a partnership in which both companies pool their resources and technology in a cooperative manner in order to achieve certain strategic objectives of both companies. Furthermore, while I shall address the concerns of the large company, I write from the perspective of a small company. Symyx Technologies, Inc. is a 200-plus person public company based in Santa Clara, California. A leader in combinatorial materials sciences, Symyx has pioneered the application of high-throughput experimental techniques to materials discovery. Despite its size, Symyx has a strong track record of collaborations with more than 20 leading chemical, electronic materials and life science companies. For example, in the chemical industry, Symyx's current partners include such leaders as ExxonMobil, The Dow Chemical Company, BP, Celanese, and Univation. Drivers of Collaboration The starting point for a research collaboration should be to clearly understand its drivers. The effort required to put a collaboration agreement in place is typically considerable and requires championship and risk-taking from both sides. Because many large companies tend to be conservative and might be characterized as "risk-averse," a champion must emerge to drive the process if there is to be any hope for a successful and expedient conclusion to the negotiation phase of the contract. Also, senior management must be convinced that the risk and effort will be worth the reward. A typical driver for research collaboration is a strategic business need that has been translated to a priority R&D need, a need that can best be realized by accessing the unique and complementary capabilities of another party. In the case of Symyx, for example, the core competencies offered center on the significant acceleration of materials discovery and optimization at lower unit cost. This capability, when combined with the large company's ability to develop, scale-up and commercialize new or improved processes and products, results in bringing advantaged materials to the market faster and more cheaply. Without a strategic, business-driven need identified early in the process, the collaboration is unlikely to be successful. The overarching driver for a collaboration boils down to value creation, for both companies. As opposed to fee-for-service contract research, the value-sharing element in a collaboration partnership is crucial for a win-win relationship. Because there is both a technology and a business element in the agreement, both functions must be aligned and work together to put it in place. A collaboration should never be duplicative but always additive to each company's needs and capabilities. Although this usually means accessing a capability one doesn't possess in-house, it could also offer the large company an opportunity to increase R&D efficiency. Supplementing internal R&D with third-party research may allow for more cost-efficient management of staffing and budgets through the ups and downs of business cycles. One note of caution, however: setting up a duplicative and competitive program at either company is strongly discouraged as it will likely destroy both value and morale. But whatever the driver, the significant research costs and the attendant risks demand that the collaboration involve a strategic project. Symyx's best relationships and outcomes are always with companies that have well-defined and aligned business and R&D strategies and priorities. …

People Solutions for R&D

Abstract: THE HUMAN SIDE Sibson Consulting and the Industrial Research Institute (publisher of Research Technology Management) have conducted a study of 114 R&D organizations contained within major U.S. industrial companies. The survey focused on people issues and solutions that are unique to R&D. The survey included responses from 159 R&D and 40 HR leaders. Sixty percent of the participants came from corporate R&D organizations, while a majority of the remaining 40 percent were from division R&D environments. Top R&D Issues Nearly one out of three participants in the study, which was completed in January 2002, cited getting more innovation from employees as their top human capital concern. Employee turnover was the primary concern of R&D leaders two years ago. While turnover is still a concern, cited by 11 percent of respondents, most R&D leaders are focusing their attention primarily on retaining individuals with key skills rather than on retaining mass numbers of R&D professionals (see chart, next page). These results show a dramatic shift in the R&D world over the last few years. During the economic boom of the late 1990s many companies were expanding their operations to keep up with demand and growth. The number one human capital concern for R&D organizations then was how to attract and retain top talent in order to support this growth. Now, R&D organizations have seen the full effects of the economic downturn and are experiencing a slowing of growth or reduction in their workforce. In fact, nearly 50 percent of reporting organizations cited that their organizations reduced R&D professional headcount in the last fiscal year. Survey findings provide further evidence that U.S. -based organizations are experiencing a widening gap in cultivating innovative employees. While nearly 70 percent of survey participants think they have a work culture that encourages innovation and 80 percent of respondents believe they retain almost all of their top performers, only 25 percent actually express that their organizations have enough technical/scientific R&D employees with leading-edge skills. Companies may think that they have established a work environment that supports innovative employees, but they still do not have enough ways to attract top talent and keep employee skills up to date. The skill gap is occurring across industries. Eighty-two percent of survey respondents reported that they would need more scientific/technical professional talent in the next 2-3 years and 66 percent believed that they would need professional R&D talent with significantly different skill sets over the same time period. As R&D organizations look at upgrading their R&D talent, they will need to ensure that their recruitment and retention strategies reinforce the rewards that are most valued by R&D professionals. What R&D Professionals Value Several key survey findings indicate how much the R&D world and workforce differ from other types of organizations. Productivity and cost reduction reign as the people priorities in other functions such as sales and operations. However, in R&D labs, issues such as innovation, leading-edge skills, discovery and collegiality are the drivers of success through people. For example, a performance measurement system that drives the right behaviors for sales people may be just the wrong system for scientific staff that must focus on managing complex, long-term projects and continually upgrading skills and knowledge. R&D organizations, therefore, require different approaches for structuring jobs, rewards and the work environment for technical/ scientific employees. Respondents indicated that R&D professionals value the "work itself" more than other rewards. This was the most prevalent response for attracting (36 percent of respondents) and retaining (43 percent of respondents) R&D professionals. …

Linking R&D Spending to Revenue Growth

Abstract: A recently proposed model for revenue growth clarifies the linkage between R&D intensity and the annual revenue growth rate. A key assumption is that the lifetime revenue generated by a group of pr...

Managers at Work: Leading Global Product Development Teams

Abstract: More and more firms face the need to access a critical resource for new product development—people who are dispersed around the world. Not only are these newproduct developers separated by time and distance but they are separated by cultural and language differences as well. The challenge for their leaders is to integrate and coordinate these individuals and their activities by forming global teams of nationals from a variety of countries. Like other types of product development teams, global teams experience the challenge of getting a diverse group of individuals from different functional areas to work together effectively for a finite period of time to accomplish specific project objectives. These teams must build trust among team members, meet schedules and adhere to budget guidelines.

Pursuing Innovation in a Big Organization

Abstract: For an R&D manager, spurring innovation in a large organization can be just like pushing a rope. Unless this manager aligns the innovation ambitions of R&D with the needs of the business, and agree...

Identify, measure, visualize your technology assets

Abstract: OVERVIEW:To a great extent, a technology company's value depends on its technology assets. A study of five Finnish technology companies was conducted in order to identify and evaluate the general and industry-specific elements of these assets as well as the success factors in their management. Thirty-one new and improved indicators were also suggested in order to better monitor the development and value of technology assets. Participating companies are able to use the results as an indicator “toolbox,” for instance in a Balanced Scorecard, for the analysis and management of technology strategies and processes.