Organisational Comparisons

From the above outline of alternative organisations clearly there is no one ideal system. The choice of organisation that is employed will depend on the role and objectives of R&D within the company. In the larger companies it is likely to be a judicious mixture of the four main types or variants that are adopted. There are three main questions to be asked and factors to be considered by R&D in adopting any structure.

1. Does it maintain the R&D skills base?

2. Is there a good connection with the business function?

3. Is there clarity of the management role?

A comparison, in these terms, of the four alternatives described in this Section is given in Table B2.

Table B2 Organisational Comparison

Functional

S.B.U.

Contractor

Matrix

R&D Skills Base

Strong

Weak

Strong

Medium

Business Connection

Weak

Strong

Medium

Strong

Management Clarity

Good

Good

Good

Poor

Project organisation within a matrix allows entrepreneurial activity to flourish, providing opportunities for project managers to prove their capacity to lead teams effectively. Functional departments remain necessary as they provide the home of technological and scientific competencies and the nursery for fledgling projects.

Transferring R&D output across organisational boundaries remains a problem, as there appears to be a cultural mismatch between R&D and other functions within a company. Possible ways of avoiding this mismatch, and at the same time improving the performance of teams within the matrix have been suggested [B-6].

• Establish human bridges by rotating R&D staff to jobs in other company functions.

• Use career progression paths for young R&D staff to other functions creating networks of people able to assess new ideas and progress action plans.

• Assign a sponsor, ideally a senior executive, to a project. Their job is to follow its progress and guarantee its survival if conjunctural difficulties are causing difficulties, whilst assessing its value in a detached way.

• Establish multi-functional project teams as a temporary organisational solution.

• Joint programme planning between R&D customers and R&D staff.

As discussed in the introduction to this Section, it is possible to identify four generations of organisational methodologies for R&D within companies. This is organisational theory on the macro scale, not something that young, new managers can change, but they should have an understanding of these models so that they can evaluate where their own company stands in relation to each generation. Only a very brief overview will be given here and the reader is advised to consult the original publications for detailed explanations [B-1, B-3].

• First generation R&D companies

- Executive sees R&D as a line in the annual budget, it is regarded as an overhead cost.

- R&D decides the technologies and there is no explicit link to business strategy.

- Unbounded search for scientific breakthroughs.

- Seek to leap from current knowledge to new knowledge and hence to new products.

- Technology first, business implications later.

- Lack strategic objectives.

- Avoid the matrix, strong functions, emphasis on cost centres and discipline.

• Second generation R&D companies

- Joint consideration by business and R&D about the strategic direction for the company, but only on a project-by-project basis.

- Supplier- customer relationship between R&D and the business on incremental R&D.

- Fundamental research carried out in central R&D.

- Matrix management of projects.

• Third generation R&D companies

- R&D operates a strategically balanced portfolio generated co-operatively by R&D and general managers.

- Partnership operates with business so that R&D is no longer isolated.

- Defined and consistent business objectives set for R&D

- Use market surveys to determine existing customer needs and targets R&D to meet these needs.

- Emphasis on continuous innovation hence limiting on discontinuities

- Strategic alliances formed with other parties for both R&D and exploitation of an opportunity (see also Section B, 1.3 and Section C, 3.5).

• Fourth Generation R&D companies

- Build on third -generation thinking but Business process focused on innovation rather than technology and product development.

- Emphasis on the management of knowledge.

- Technology management represented as the generation of intellectual property.

- Greater emphasis on discontinuous innovation.

- R&D works directly with customers, develops prototypes and products via a process of iteration.

- Organisationally the innovation process uses empowered, multi-disciplinary teams.

For new managers it is a complicated world that they are entering, in which they must be flexible and able to operate in a variety of environments that are constantly changing. In order to carry the fruits of R&D into the marketplace it is essential to work closely and collaboratively with all concerned. There is no point in trying to blame the organisational structure for any problems, it is up to the individuals within a group to get on with the job and resolve any difficulties as they arise using the tools described in this book.

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Project Management Made Easy

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