Roussel et al's 1991 text, Managing the link to corporate strategy, Third Generation R&D describes that evolution of research and development in the corporate business environment. This text provides a guide to link organizations objectives and strategies to their R&D activities. Below is a description of this reader's reactions, big ideas, implications, and lingering questions after completing this book.
The theory behind Roussel's text is very well thought out. It offers a set of easy to understand models for developing a third generation R&D environment for your organization. Roussel present these models in an optimistic way that encourages the reader to reconsider how R&D should be managed. This book is an excellent tool for all technology managers. Roussel blends the business and technology disciples together and helps struggling technology managers to bridge the gap between these long separated functions within the organization. For example, Roussel suggests that projects must be organized into portfolios in order to manage risk and return. The concept of project management is a technology disciple while portfolios, and managing risk is a business discipline.
There are a number of pressures, which require companies to invest in research and development (R&D) activities. These pressures include competition from local and global companies, as well as a decreasing availability of scientists and technologists. The pressures from competitors require companies to continuously introduce "high quality, innovative, cost-effective new products". Roussel's answer to these pressures is third generation R&D. Roussel states that there are three generations of R&D. The first generation of R&D relies on the insights and intuition of technology managers to determine which projects are worth investing time and money. In addition, there is no connection between the R&D projects and the objectives of the company. Top management only considers these projects as a required cost to the company. The second generation of R&D organizes activities into projects and measures the progress against a set of established goals. In addition, the cost of each project is examined against the possible benefits that will result from the research and development. The third generation of R&D technology managers and top management work together as a partnership to selected and evaluate projects. The goals of the organization are aligned with the R&D activities. Projects are organized in to portfolios in order to manage risk and maximize profits. When companies employ a third generation philosophy they are more competitive, more effective with a smaller investment in R&D activities. Roussel also states that there are three types of R&D. The first type is called incremental R&D. This is referred to as small "r" and big "D" and represents small advances in technology. However, the focus is on clever applications of this research. The second type is called Radical R&D. This is referred to as large "R" and often large "D". The focus is to discover new technologies and to produce a commercial viable breakthrough for the organization. The third type is called fundamental R&D or large "R" and no "D". Roussel calls this a "scientific/technological reach into the unknown". The main goal is to develop a depth in research competencies to build future competitive advances. This includes preparing for the long-term commercialization of these technologies. Roussel believes that a company needs to build portfolio of research projects that blend all three of these types of R&D to guarantee prolonged profits and success. Roussel also explains the function of R&D as a tool to (a) defend or expand existing business, (b) drive new business, and (c) broaden and deepen a company's technologies competencies.
This model for business and technology change has the potential of redefining many organizations. It also can be the competitive advantage, which determines your success over the competition. The interesting fact is that many companies will not make the change and this simple plan may allow for a few companies to rise to the top. This model can also be a catalyst for technology managers to think out side of the box. Many of these managers have both a technology and business background. However, they may not have tried to connect the learning in these two disciples together. This could be that start of a new way of thinking. It definitely has for this reader. Questions
One concern for that this reader has for the book is related to time and change. Many organizations are not prepare to consider third generation R&D as a realist option. The amount of time needed to transform a company into a third generation environment may seem to great to risk. Even the most advance technology companies many see the investment as unreasonable. How would a technology change to the company's paradigm and consider the possibility of a next generation strategy like Roussel suggests?