Rob Coombs. Manchester School of Management, UMIST, Manchester, UK

Transcription

1 Rob Coombs Manchester School of Management, UMIST, Manchester, UK

2 Increasing concern amongst R&D managers and their immediate customers and sponsors Rapid innovation VS Long term technological strength Explore the possibility that the Core Competence Paradigm (CCP) has something useful to offer those concerned with strategic management of R&D in large firms

3 Section 1: Brief synopsis of CCP Section 2: Trends in the Strategic Management of Technology and R&D Section 3: The Link between Core Competencies and Strategic Management of R&D Section 4: R&D Decisions and Core Competencies

4 Based on Prahalad and Hamel, 1990 (Harvard Business Review) Core Competencies (CCs) Technological expertise (both product and process) Organisational capacity to deploy Strengthened through continued use Firm specific and non-transferrable Give access to multiple products and markets Specific advantages to customers Difficult to imitate

5 Core Competencies Not monolithic Consist of an internal structure composed of a number of capabilities Specific combination of appropriate capabilities into specific competencies Physical and commercial reality in core products Core products are then deployed in a variety of end products

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7 Emphasis on core competencies and core products Particular combinations of capabilities Robust over time Specific advantages to supplier and customer Creating a preferred and firm-specific path from technological knowledge to end products Orientation device

8 Britain s major R&D performing firms Intention of making their R&D marketdriven Integrated into market strategies Consistent with the definition of successful innovation

9 Outcomes of the process of evolution: Balance of funding (Corporate Business unit sources) Customer- contractor relationships Corporate labs have shrunk Increased M&As which has combined previously separate R&D facilities Business-unit level R&D facilities are marketdriven Do not undertake work outside the business areas Product and process innovation

10 Negative consequences: Dependant on the business-unit ownership of R&D New generic technologies emerge which are competence destroying, their R&D infrastructure may not be able to cope

11 Compensating source of technical competence Corporate parent R&D Capacity Weakness at corporate level: Process of decentralisation has weakened both competencies and organisational influence of corporate R&D Financially oriented rather than toward the strategic coordination of activities of business

12 Overall technology and skill portfolio of a diversified corporate structure can often be invisible to the company Significant shift towards product and markets, and away from technologies Appropriate at the business-unit level Inappropriate at the level of the whole corporate structure May have learnt the lesson too well Innovations are about market-pull and not about technology-push

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14 Correct the problems as a result of decentralised R&D Creation of a corporate unit for strategic management of technology: Analyse overall technology portfolio Ensure technological competence are widely used by all business units Identify technical competencies To apply/ inject the overall technology portfolio into the broader strategic management process

15 Aims at combining the market-driven benefits and benefits of corporate sponsorship of the technology base, and cross-fertilisation of technologies and businesses

16 The Links are: Acquire, generate and husband Technological capabilities which are building blocks of core competencies. R&D Managers are the default location of responsibility for protecting interests of SBU Managers when funding regimes make it hard for SBUs to co-operate. Application of the technological capabilities of R&D in specific innovation projects to produce new functionalities depends on complex coordination processes involving marketing& operations functions.

17 R&D function is not itself site of core competencies but have 2 major points of contacts: Investments mode: R&D are concerned with managing& developing portfolio of technological capabilities, that feed directly into core competencies of corporation. Only if core competencies have been identified Secondly, the harvesting mode: R&D in market-driven exploitation of core competencies to produce specific artifacts or services for customers.

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19 From top, Strategic research programme is responsible for generation& maintaining technological capabilities which are core component. Managed& funded at arm-length from individual SBUs, so programme can t be damaged by short term pressures. But, appropriate organisational structures are needed for steering of programme.

20 Alongside strategic research programme, another source input are External linkages to public science& technology assets of collaborators. Technological capabilities just form 1 important component. 3 other inputs to core competencies are: Organisational structure, dynamic scale of economies and market knowledge. Main determinant is technological investment activity of R&D function.

21 Market focused product development in specific SBUs, is an activity which firm can exercise core competencies. Doesn t mean activity depletes core competencies. Are to some extent outcome of cumulative processes of exploiting particular skills& structures. Identify positive feedback process from development activities to competencies.

22 The main tangible product of R&D is Technology. Metcalfe& Boden(1992) makes 3-fold disaggregation of technology into Knowledge, skills& artefacts. Management and policy issue should also be distinct. Artefact can be seen as a functionality profile and a specific technological recipe.

23 Using this conceptualisation of technology, is concerned with 2 mode of R&D are knowlegde and skills. These Projects are influenced by new knowledge and skills acquired through project Decisions boils down to do we have a technological solution to this product specification whether is cost effective, will it please customers. If technological recipes are embedded in core products, it satisfy Prhalad& hamel s criteria.

24 Difficulty for R&D manager to decide on technical content& justifying decision to managers from different functions. But different if R&D function is part that make explicit identifications, help clarify the choices. Difficulties especially at longer term of portfolios Absence of common language between R&D managers and general managers.

25 Use of core competencies as tool to shape strategic R&D: Longer term elements funded corporately rather than by SBUs Long term R&D should b organised around specific technological capabilities. Both Managers should be involved in reviews procedures. R&D should do much more than just respond to strategic agendas.

26 General trend to measure effectiveness of R&D One implications is that, linkages of R&D to investment in core competencies is for trying to measure extent to which knowledge& skills are accumulated in technical areas as significant indicators. Hard to relate to financial outcomes than artefacts, but more to use bibliometric and peer review styles (Miyazaki 1993)

27 Merits of investing effort for monitoring technology accumulation must be judged by scale of company s investments. Whether measures have any operational values in term of motivation. But, in many areas of R&D, it is hard to escape view that more performance measure be done in the future.

28 Increased concerns amongst R&D managers and customers within company to have reliable mechanism to direct R&D simultaneously. Leading to R&D managers seeking analytical tools to help. Competencies can be useful focusing devices for assisting creation of linkage. Further research on specific core competencies & R&D subunits is now required.

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