Academic journal article Research-Technology Management

Assessing Transition Readiness for Radical Innovation: Here's a Tested Tool for Determining the Readiness of a Breakthrough Project to Move from R&D into a Commercial Operating Group

Academic journal article Research-Technology Management

Assessing Transition Readiness for Radical Innovation: Here's a Tested Tool for Determining the Readiness of a Breakthrough Project to Move from R&D into a Commercial Operating Group

Article excerpt

Since 1995, the Industrial Research Institute has engaged in a program of research, in conjunction with a group of academic scholars, to understand how to manage radical innovation better. The underlying thesis is that this is not impossible, and that, indeed, if we can understand what companies do to manage it now (that is, first describe the process), then we can begin to put mechanisms in place to improve our management of radical innovation.

One of the outputs of that research program is a tool to help manage the transfer of a radical innovation project to its ultimate home in an operating unit. In this article, we describe the context for this work, how the tool was developed, and the appropriate opportunities for its use.

Where We've Been

The impetus for the radical innovation research program was the belief that, while U.S.-based firms had been driven since the 1980s to focus on improving their performance in managing incremental innovation and continuous improvement, that focus had come at a price. It diminished the capacity of America's largest companies to engage in truly discontinuous, breakthrough innovation. Central R&D labs, traditionally the source of radical innovation ideas, were redirected to serve the immediate needs of corporate operating units. Always under pressure to maximize short-term performance, operating units were reluctant to invest in high-risk, long-term projects. The negative consequences of too much attention to incremental innovation have been recognized by many scholars, who have noted how firms that dominate one generation of technology often fail to maintain leadership in the next generation (1).

We have been studying 12 projects in 10 large companies. All projects were considered, at the outset, to have the potential to be radical innovations, defined by the IRI membership and the academic researchers as a project that had the potential to offer either 1) new-to-the-world performance features, 2) a 5-10x improvement in known performance features, or 3) a 30-50 percent reduction in cost. Any project that came into our study must have been considered by the firm's senior technical management to have that kind of potential, and must have been granted its own budget and had an identified team associated with it.

We are entering our eighth year of tracking those projects. Of the 12, four are clear market successes, one has been folded into a current product platform, four are still in development, confronting technical and/or market challenges, and three are clear failures in that the projects have been de-funded and the key people associated with them have left the organization. Much of the accumulated learning associated with Phase I of the project has been published (2).

One very surprising result is the subject of this article. In initial discussions, our respondents indicated their belief that once the Radical Innovation project was sufficiently mature, the receiving operating unit would be able to employ tried and true project management techniques, such as the well-recognized Stage-Gate system (3), to bring the new products resulting from the radical innovation to market success.

Contrary to expectations, this was not what happened. Eight of the 12 projects have matured to the point of attempting to transition into operations. In every case, this phase of the project was tumultuous. In fact, three of the eight have transitioned back and forth between R&D and an operating unit multiple times! We discovered that there is a set of transition activities required to complete the resolution of technical, market, organizational, and resource uncertainties that neither R&D project teams nor program managers in operating units are prepared to handle. We came to believe that the most efficient and effective way to manage this interim set of activities was to create a transition team, composed of at least one member of the project team in R&D, at least one member of the team who would be accountable for building the business in the receiving unit, and a member from the radical innovation hub who has had repeated experiences in managing transitions of radical innovation projects. …

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