HEADS UP!
New R&D Models
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More than ever, companies that don't unleash a constant stream of new
products and services are vulnerable to those that do. That's why firms
are increasingly frustrated with their traditional development processes,
which are apt to be bureaucratic, politicized, and costly. The solution?
A small but growing number of companies are supplanting traditional R&D
efforts with experimental models that seek to deliver breakthroughs to
market in less time, at lower cost, and with wider participation.
Consider Royal Dutch/Shell's GameChanger teams. Last year these specialized teams scouted up over 300 ideas from across the far-flung company. They included everything from ways to reduce company paperwork to using laser sensors to discover oil. Result: of Shell's top five business initiatives, four came from the new approach.
Nortel Networks allocates phantom stock to people who volunteer for special high-risk innovation projects. Nortel "buys" the stock, as if it were an internal IPO, and rewards intrapreneurs on the basis of success. Nortel has 17 products under development in this program.
Procter & Gamble has created a new group to fast forward innovation. Ideas for new products are routed to a group calling itself Corporate New Ventures (CNV), which answers only to CEO Durk Jager and has a whopping $250 million in seed money. The team conducts aggressive new idea searches, then puts the best ones through a rigorous, speeded-up feasibility analysis. Once CNV green-lights an idea, the team has full authority to bring a product to market, and can tap the brainpower of the company's engineers. Result: 58 new products have been brought to market, including a new cleaning product called Swiffer which has breakthrough potential.
These new innovation SWAT teams are designed to function startups. Yet they reside in the bellies of large corporate beasts. Do these new models represent a new paradigm in fast forwarding innovation? Or are they merely a flavor-of-the-month fad?
My sense is that we are witnessing not a fad but the stirrings of a whole new way to bring ideas to market. Companies are so desperate to jumpstart growth, so aware of the paralysis of bigness, and so afraid of losing their most creative producers to dot.com startups, that they will eagerly embrace such radical new methods - as long as they bring results. So, my suggestion is that these new teams are worth investigating by those inside companies charged with innovation.
For more information see BusinessWeek November 13, l999, "Using the Net for Brainstorming," www.businessweek.com/ebiz/9912/1203novins.htm
More next time.
Edited by Robert B. Tucker, the president of The Innovation Resource, Santa Barbara, California. He's author of MANAGING THE FUTURE: 10 Driving Forces of Change for the Next Century, and other books on innovation, and is a popular speaker at conferences. (Innovationresource@compuserve.com)
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