Manufacturing

Feature:

Blue skies

23 March 2007

Managing research teams is a challenging task for typically process-orientated manufacturing companies. So how can technology help, asks Adam Lawrence?

Some functions are harder to manage than others. To the layman at least, it would appear to be more straightforward to get the best out of a group of financial professionals than a bunch of creative writers. In general, creative people in any discipline can be expected to chafe under a tight management rein - but a line manager who gives extensive freedom to his team runs the risk of losing control of performance. It is a fine line.

Although managing creative functions, and creative people, is not easy, it cannot be neglected. Departments that depend on creativity among staff are tough to manage. But even the most blue-sky teams have goals; and even they must be measured.

Research and development (R&D) is fundamentally different from new product development. Using existing ideas to create new products is a far more measurable process than the blue-sky work that characterises a pure R&D environment. Yet such work is obviously a key part of many businesses - pharmaceutical manufacturers being perhaps the most obvious example - and it needs managing like any other business process.

"There is obviously a close link between R&D and new product development, but it's a big mistake to assume they are the same thing," says Keith Perrin of software developer UGS. "Lots of companies spend vast amounts of money on research, but executives are often pretty unhappy with the returns on that investment. The future value of many companies can be closely tied to the amount they spend on R&D, but if you look at the automotive industry, you'll see that GM, for example, spends a higher proportion of its income on research than Toyota does. But which company is more innovative, and which is more successful?"

Analysis by AMR Research suggests that the disconnect between cash spent on research and the successful introduction of new products can be linked closely to the maturity of the management processes used to oversee R&D operations. There are two essentially different views of R&D within manufacturing. One sees research as the precursor of product development, and tends to ignore any work that doesn't lead directly to new products. The other, by contrast, sees research more as an end in itself, and encourages R&D teams to follow ideas to their conclusion, even if they don't have a clear connection to a saleable product.

This latter approach - typified by research-led manufacturing companies such as Proctor & Gamble - is obviously a higher risk policy. Yet it is well understood to be more successful; companies that innovate consistently are far more likely to grow and prosper in the long term.

This is not to say that research operations can usefully be viewed as an academic ivory tower. Like any other business process, R&D must pay for itself; the paradox, though, is that researchers who are too closely focused on business goals are less likely to generate new ideas that have the potential to transform a business. The invention of the Post-It note by manufacturer 3M is perhaps the most often-cited example of this paradox. The common wisdom about the Post-It - that it was created accidentally by a researcher and that the product stumbled into the market - is actually directly counter to the true situation. In fact, 3M's research management was specifically set up to archive ideas that appeared to have little commercial relevance, and thus to provide opportunities to analyse those ideas for their potential. The Post-It may not have been created to a product manager's specification, but it was the direct result of a management regime that was able to evaluate new work objectively.

Part of this lies in the recognition that, even as a manufacturer, R&D can be a profit centre in its own right. If research teams generate new intellectual property (IP) that doesn't fit into a company's plans, that IP can happily be sold to another business. But perhaps even more important is the technology infrastructure needed to support such a process.

Genius, we have long been told, lies 99 per cent in perspiration, and only one per cent in inspiration. IT may not be able to help in the inspiration, but if it can speed or ease the perspiration, then it can play a significant role. Essentially, the answer lies in knowledge management. If research results are archived in such a way as to make it easier for other people to review them, then you increase the possibility that a seemingly useless piece of work might later generate commercial success.

"In R&D, you don't have the quite the same focus as you do in manufacturing - it's a more unstructured environment," says Perrin. "Engineerng and manufacturing are quite a formal world, one where things need to be in sync. But in R&D it's more about creativity and collaboration and bouncing ideas around. There needs to be much more sharing of ideas and communicating what those ideas mean."

Although it is important to give researchers their head, it remains necessary to keep work aligned broadly to corporate goals. Though, as Dilbert reminds us regularly, development operations that are too tightly controlled by product managers will prove to be ineffectual, marketing and sales teams must be on the same page as researchers.

The key to this is portfolio management. Perrin says that the latest version of UGS's Teamcenter product includes a tool to enable research managers to decide which portfolios to take forward. "Our approach is to help put together get information from three groups - sales, marketing, development - and put a corporate measuring stick against that idea," he says. "You need to score ideas against corporate goals, at high level or in more detail. Then you can start to make decisions about your future mix of products, R&D lines and the like, and get them to gel together."

One barrier to this kind of cross-departmental collaboration lies in the complexity of systems such as product lifecycle management (PLM). These development and engineering applications have traditionally required significant training before users become comfortable interacting with them. Product managers, sales teams and the like are clearly not in a position to invest the time necessary to achieve this familiarity.

Here is where Microsoft tools can transform the collaborative process. Users' comfort with the standard Microsoft interface means they can more easily extract the limited information they need, and the use of tools such as SharePoint enables information from different systems such as PLM and ERP - as well as the essential marketing data from customer relationship management applications - to be brought together in one place to aid decision making. Such a roles-based approach to IT is a vital part of the Microsoft strategy for enterprise computing, accepting the fact that non-specialist staff cannot be expected to master complicated systems used in other departments, yet at the same time understanding that improving access to information across the business is fundamental to driving innovation and improved customer experiences. As in so many other industries - retail being an obvious example - this kind of technology is enabling large global businesses to behave as small companies always have, replacing the informal discussion at the water cooler with a virtual community exchanging the same kind of information. Modern PLM applications from companies like CoCreate, UGS and Dassault Systemes thus incorporate discussion areas for researchers and other colleagues to share their insights, and thus to funnel important feedback right up to the sharp end of R&D.

Perhaps the final aspect of effective R&D lies in the management of intellectual property (IP). Businesses that invest heavily in research need to document the work to aid the work of IP experts in protecting that investment. This is becoming ever more significant: Proctor & Gamble, for example, is one company that has moved towards outsourcing a proportion of its research work, while ensuring that it retains the IP rights on such work. Companies, by contrast, that fail to deploy an aggressive patent strategy as a part of their R&D processes, can find competitors using their own work to outflank them in the marketplace. Managing R&D need not be akin to herding cats. But businesses need to deploy technology that supports researchers in their creativity, rather than attempting to systemise them to an undue degree. It is a challenge, for sure - but it is one that few manufacturers can afford to ignore.