Learning to Shut Off the Research Spigot
As top management will confirm, the only task more difficult and expensive than launching an innovation in a Fortune 500 company is killing one in its tracks.
“Killing projects?” snorts former Colgate-Palmolive research chief Jules Blake. “It’s easier to kill the chemist.”
Wishful thinking? Harold Geneen, the iron-fisted conglomerateur who ran ITT, actually hired globe-trotting engineers to visit the company’s labs with the express mission to snuff out any and all research activity in computers. Geneen didn’t want to take the chance that some brilliant technologist would figure out a way to drag ITT into direct competition with IBM. Geneen intuitively understood that the research you avoid can be more important than the research you do.
The swiftest, surest and most effective way for organizations to boost their research and development productivity is to become a little less expansive about potential opportunities and a little more ruthless about setting priorities. Innovation for innovation’s sake is an indulgence. Too many companies today are ending up with ideas that represent the strategic interests of the innovators rather than the strategic direction of the organization. The organization spends more time massaging egos than managing milestones.
The smartest thing that most corporations could do today to wake up their R&D; people would be to institute a rule that people can’t launch a research effort without eliminating an existing one. A foolish zero-sum game? Not at all.
The point is to force people to prioritize not just their budgets, but their time. It’s also a way of getting the rest of the organization to pay attention to what R&D; is doing. If they take on these three new initiatives, what are they going to give up? Are they giving up something that’s important to my group? Let’s get people nervous.
Does that mean organizations should be discouraging individual initiative? Of course not. But companies need to become much more explicit about how they want to grow innovation. It’s one thing to be a 3M--which takes pride in not killing projects--and allot your people discretionary time to pursue their personal innovations. It’s quite another to build up phalanxes of review committees that bicker, barter, logroll and play pork-barrel politics with the innovation budget.
What percent of General Motors’ $5-billion annual research and development budget has been focused on the competitive challenges the auto giant faces from Japan? How well does IBM’s $4-billion annual R&D; budget reflect the rapid shifts in the digital innovation infrastructures? Or do these massive research bureaucracies and their Fortune 500 brethren do a far better job reflecting the internal jurisdictions of their organizations than the external demands of the marketplace?
“At the margin, everyone wins if a project is funded,” says McKinsey & Co.’s Lawrence H. Linden, co-leader of the consulting firm’s technology management practice. “So people take the easy way out. . . . That process runs amok and too many projects get funded.”
In terms of strategic importance to the organization, however, many of these projects devolve into budget-sucking R&D; zombies that refuse to die. They live more off of organizational inertia than any marketable merit. It’s not that these projects are a waste; it’s just that they aren’t what the organization should really be doing with its resources.
The political compromises mean that many of those good ideas get starved. That creates a vicious cycle because now the organization has lots of programs under-performing. The researchers are resentful because they believe that their projects would be going better if they had more resources.
Instead of genuine innovation, the organization gets what Arthur D. Little technology consultant Tamara J. Erickson describes as “creeping decline”--the idea starts out well but “over the course of the research, each key result is a little bit less than had been desired. . . . The program evolves into a mundane project.” The result is a “me-too” product that is immaculately researched and developed but offers no compelling competitive advantage.
“Believe me, it’s not hard to spot this situation,” says Sloan Foundation President Ralph Gomory, who ran IBM’s global research and development operations. “You’d have to have blinkers on not to see that a program has problems. A lot of his stuff is a lot more prosaic than people think. . . . Knowing isn’t the hard part; facing up to it is the hard part.” Gomory stresses that you don’t kill a project unless you have some relevant option for the researchers.
Unfortunately, as Erickson and Linden point out, too many companies find it easier to rationalize a research and development budget than justify it. Instead of going through the discipline of setting milestones and sticking to them, they fudge and cheat.
Why? Because, if you’re really good in research or development, you can always get tantalizing data. Building in mechanisms that force people to justify their trade-offs is the best way to get people to face up to the fact that tantalizing data may whet their personal curiosity but doesn’t generate tangible results.
