Technology Brokering, An R&D Checklist

Adapting R&D strategies to the challenges of global business opportunity needs to start with checking the most fundamental presumptions. For example, is the invention-focused traditional research and development model still valid? asks Andrew Hargadon, assistant professor, graduate school of management, University of California, Davis. Better yet, was it ever valid? he questions in "How Breakthroughs Happen, The Surprising Truth About How Companies Innovate" (2003, Harvard Business School Press). He contends that the business world, in trying to emulate inventive genius, has misunderstood the successes of such roll models as Thomas Edison and Henry Ford. Hargadon makes the point that for Ford and Edison, innovation flowed from their connections across a wide range of markets into the recombinant innovations those experiences enabled. Unfortunately, notes Hargadon, too many R&D labs have shut off that critical flow by focusing solely on the pursuit of invention rather than recombination. Hargadon calls for balance. He asks: How can managers convert some of their R&D laboratories into dedicated technology brokers? The checklist that follows are his observations and recommendations based on a decade of research into technology brokering organizations:

1. Rewrite the charter. Instead of trying to invent the future, focus on redistributing the present. Max Wollering, one of Henry Ford's earliest and most influential engineers, once said: "There was nothing new [about interchangeability] to me, but it might have been new to the Ford Motor Co. because they were not in a position to have much experience along that line." Don't ask your R&D teams to do things that have never been done -- ask them to make connections where nobody else has before.
2. Throw out your scientists. That doesn't mean get rid of them -- they have invaluable expertise. But the valuable problems are in the marketplace, and the more your scientists talk with customers, the more their problems will guide research. One IBM Corp. scientist, raised in the R&D lab, said after visiting customers: "For me it was a real eye-opener coming from the lifestyle of writing academic papers to learning about markets and what business is all about. . . . It was like going to a foreign land -- there were aha! moments in both directions."
3. Hire outside the box. Sometimes this means hiring bright people right out of college, and sometimes this means hiring people with expertise in other areas -- either way they will be more willing to challenge existing assumptions in your industry. Henry Ford hired a machine tool designer with no automobile experience to build his Model T operations. He hired his son's tutor to design the final assembly line.
4. Change the reward system. Business units are often the best judges of whether new R&D projects will have an impact. Split the funding of new R&D projects between central and business unit budgets. This will force R&D managers to justify the return on investment and, at the same time, build commitment from the business units to use what comes out of the labs.
5. Stay on the steep part of the learning curve. The most powerful innovations will come from moving through unfamiliar waters -- from learning about new industries, markets or technologies rather than focusing on improving old and familiar ones. Push scientists and engineers to move every few years into unfamiliar areas.
6. Look inside for innovation. Many valuable practices are already scattered about the organization, yet few business units have the resources to share their best practices with other units. Build small R&D groups to move between business units, using the best practices they find throughout the firm (and even outside) to bring valuable solutions to each business unit client. Hewlett-Packard saved hundreds of millions of dollars optimizing its supply-chain management in this way.
7. Encourage external funded research projects. Turn your R&D groups into consulting firms -- let them search for business outside the firm's traditional markets. It's useful when the cost of equipment or expertise is more than one firm can justify, and it's useful for retaining employees whose interests draw them into different directions.
8. Look to establish joint ventures. Build R&D labs from the researchers and project management of two or more companies. When Intel Corp. and Mattel Inc. managers both saw the convergence of information technologies and toys, they created the small-toy lab, staffing it with engineers from both firms.
9. Don't think outside the box -- look for other boxes. Good ideas are already out there -- where are they hiding and how can you find them? Try to find different industries that share similar underlying processes, patient-tracking systems in health care are surprisingly similar to inventory management systems. Instead of just visiting the U.S. trade shows, visit European or Asian trade shows. Instead of looking just at the major vendors or existing suppliers, visit new and small vendors. Invite vendors or academics to present potentially relevant or provocative ideas. Take factory tours -- no matter how unrelated the industry. Changes are good that you'll find some things in common.
10. Look twice at your failures. Oftentimes, a failed project for one market turns out to be a revolutionary success in another. DucoLac was a failed photographic emulsion that became a wildly successful automobile lacquer. Viagra was a failed heart medication. Post-its is a product of failed glue. What of your failed projects? Could they be resurrected for use with another market?
11. Rotate engineers and scientists throughout the organization. Move scientists and engineers through different R&D labs or out onto development projects, even onto the factory floor. Treat these rotations as sabbaticals -- as learning opportunities that will not only give your R&D staff new perspectives but also help create new networks between otherwise isolated R&D teams.
12. Experiment. One of the values of recombinant innovation is that the pieces are already there. Unlike the traditional model of invention where you're focused on putting old pieces together in new ways. Success, as Edison once said, depends on how many experiments you can fit into 24 hours.
13. Think like ants. Ants are not the best and the brightest, and they never try to be. Like R&D scientists, each is out there scouting for bits of food. Unlike scientists, when an ant finds a promising source, it doesn't try to take all the credit for it -- it goes back and tells everyone else. Then the whole community pitches in to turn that promise into a reality.