Building Innovative culture

To implement innovative culture the organization need a commitment to higher standards of  sustainable solutions

Along with the enabling Innovative culture in the organizations, it is important to build a strong, Research and Development Structure with systems designed around the resources (human, capital and technical).  As a technology advisory to Government Institutions and consultant to Private sectors on technology transfers, I had traveled in India to explore different designs of the R&D systems. The core building blocks varied based on the focus on Project selection and product development cycle. In this blog, I will bring key findings in need for designing R&D structures, different designs enabling innovating and Human capital role.

Need for a specific design of R&D structure:

Choosing a righ structure is based on the long term and short term commitment to the deliverables and existing organization structure.

Innovation has been the very vital to the organizations, survival in the world of competing for new processes and changing user perspectives. To gain the advantage over the competing forces a clear R&D design needs to be in place. I asked innovators on why do we need a form of R&D structure, the common answers include:

1. To maximizing fit with the customer/user requirements
2. To minimize the product development cycle and secure market advantage
3. To control development costs

By keeping these three major views, if we design an R&D structure, it will not effective but also efficient.

Designing R&D structures:

In my findings, larger corporations with an immediate need for new products, choose to create a central R&D lab with a vision of 5-10 years target, through creating ‘division R&D labs‘. These division labs work according to the specific requirement of the product development, cutting itself off from other divisions of the organization.  The outcomes of such models, result in upgrading existing products but fail to generate Innovative new products due to lack of knowledge sharing and cross research platform.

The ideal model, in these structures, can be an ‘ambidextrous R&D‘, with equal importance to multiple projects enabling diverse processes, cross learning from multiple approaches and defined a structure in place.

Another form of a system, I came across during my visits to pharmaceutical companies was ‘Quasi-formal R&D structures‘, in an external appearance of design, they resemble close division labs. In reality, they are loosely connected to the parent organization. Due to its informal structure and focus of developing new products, they have a tendency to become individual organizations or units in coming years.

A widely adopted system in technology intensive organizations was ‘Modular R&D Structure‘, it is one structure different from all other designs with its keen focus on component level. In recent times, the organizations are adopting this structure to sell small components to be repacked by distributors. This process of trade is called ‘loose coupling’. Loose coupling provides organizations with flexibility in meeting market demands and customer specification.

One such model is widely seen in Tata Nano – Making an affordable car Project,  Tata Automotive took the advantage with Modular structure in selling car components in separate packages that can be assembled and rebuilt based on the customer’s specifications at the local distribution center and local assembly enabling cost efficiency.

Globalization had created a stepping stone for the upgrading existing system to collaborate across the borders and cultures, through so-called ‘Globally linked R&D structures‘. Due to no direct contact between personnel involved in different R&D projects of the same organization, it is a challenge to build trust and knowledge sharing. As Bartlett and Ghoshal conducted several studies on the Global strategy to advance Globally linked structures. The success of these Globally linked R&D structures come from decentralized innovation meeting customer demands in the area of operations along with a common thread of knowledge and experience exchange with multiple cultures and locations.

Development Processes:

Development Processes are one area, where organizations focus on R&D system establishment and overlook process implementation. Many organizations fail to achieve the goal due to their lack of understanding of differentiating R&D structure from production structure. The key difference in these two is in Sequential development process vs partly parallel development process. Process decisions, in these two process models, are different in creating a platform for concurrent engineering influencing downstream areas of product life cycle, maintenance, and disposal of outcomes.

Human capital behind the R&D Structures: [Human enablers]

Innovation is driven by the Human capital, the whole process starting from idea generation to product development involved various consideration of stake holder’s perspectives. As I have discussed in Balanced Score Card Approach, the first step to innovation is to conduct stakeholder analysis, measuring current and predicting future needs. This process involves an active feedback process from customers (lead users – to test products), suppliers (focus group meetings and interactions) and crowdsourcing (open to the public during the development process).

It is the responsibility of the executives to allocate sufficient human and capital resources to achieve shorter cycle time, ensure project to sustain necessary momentum to surmount hurdles, stimulate collaboration between functional groups and R&D groups and finally, to achieve a good fit between product attributes to customer requirements.