The Knowledge Source

Most ideas evolve through constant iteration between a new technological capability and a market need. There are, moreover, several paths leading to the combination (techno-market insight) that starts the process of commercialization. In practice, research gets initiated on the basis of a variety of impulses: an idea for a future new product; solving a customer’s problem; a reaction to competitor movers or other threats to a business; and exploiting new principles to build a capability. Getting to a valuable insight quickly is partly serendipitous event but can be “engineered” to some extent. The start of the process of technology commercialization should be seen as a willful act. The engineered insight (or R&D) may not be the one that gets pursued in the end, but simply should be seen as a starting point once excitement has been created. There are three ways to come to a techno-market insight speedily: accelerating the rate of experimentation, using formal creativity techniques; grounding the research in known problems from the start; and intensifying contacts between researchers and the market, allowing them to anticipate uses they may not normally think of. The first task in technology commercialization involves managing the process of idea creation effectively. This means that the organization must provide a wide and rich commercial context as possible, including scenarios of the future; create conditions wherein chosen problems are pursued deeply; encourage contacts, brainstorms, and idea exchanges, rather than encouraging solitary approach.

In this highly competitive and dynamic environment(with globalization in mind), business is challenged by the faster pace of commercialization and the ability to create and commercialize new products quickly as possible has become a central challenge for organizations (Product Life Cycle is another area that we need also to understand which I will discuss in another blog soon). Faster commercialization can secure the organization’s existence, but more importantly it provides several benefits such as the growth of turnover, profits and market. Additionally, organization can reach the position of being the market leader in the local and global business arena. It was also noticed that the significant cost benefits can accrue from compressing the commercialization process by producing product right on time. Currently many firms are increasingly interested in being the first in the market with their new products to gain these benefits and notably, in the Philippines, several organizations are now becoming aware of this practice (due to pressing issues of globalization). However, a systematic analysis of the problems of commercialization and the connection between these problems and the process of commercialization is still missing. There is still no standard methodology as to the process of generating projects down to commercialization. It is varies from organization to organization (or organization within an organization i.e., division, departments, etc.)

Some projects are generated by mere impulse, or what the management finds interesting enough (although objectively, they have a great deal of judgment based on their business acumen as to what business or technology to pursue) and direct the R&D to exploit the technology and build an internal capability. Implementation of the project down to commercialization by all means is assured since it is directly supported by management.

At the end of the day, still the question to organizations is how to accurately come up with the right technology to commercialize (in a techno-market approach) and at the same time fastest way to reach the market (first to market). For further understanding about techno-market model for commercialization, I came across a model that can explain the process in details and you can download it here.

In the premise that Research and Development (R&D) having been recognized as a vital part in most companies and have been investing time and money just to stay competitive, it is also imperative that companies must establish a way of evaluating the value of R&D to the company. Although R&D productivity is difficult to measure, many companies are now trying to come up with the best measurement and evaluation systems and it is becoming a requirement rather than a simple experimentation. But most of these measurement and evaluation systems fail and have negative effects towards the R&D personnel. Failures of such systems are due to: (a) too much emphasis on internal measurement which rely too heavily on in-process measurement and feedback; (b) too much focus on behavior which is based on behavioral aspects that causes people to be overly concerned with the way work is done rather than focusing on the outputs produced plus the fact that behavior is difficult to measure accurately; and (c) measurement system is too complicated which can be put as measuring people on too many variables is as bad as no measurement at all.

An effective and workable system for measuring R&D performance should consider the following: (a) focus on external vs. internal measurement which includes components for measuring outcomes based on receiving system feedback; (b) focus on measuring outcomes and outputs and not on behavior which includes dimensions such as quality, quantity, time, and cost; (c) measure only valuable accomplishments/ outputs; (d) make the measurement system simple; (e) make the measurement system as objective as possible by using outside data whenever possible – this can be achieved by asking engineering or manufacturing (customers) rather than R&D managers themselves; and (f) develop a separate R&D evaluation since it performs different functions and produce quite different outputs compared to the normal manufacturing or engineering.

In reality, companies have difficulties in designing a “perfect” measurement and evaluation systems not only in R&D organization but almost in varying sub-organizations (or departments) within the total organization. The majority of the technical personnel have not been properly evaluated and subjectivity is unavoidable in a much complex areas (or issues). In some cases, such systems may just impede the performance of R&D and will result to a more chaotic demotivation of personnel. In spite of these failures, companies continue to innovate and seek a (more or less) “perfect system” in evaluating the value of R&D especially on the positive viability of their investments. Although designing such systems requires time and money as well, it is normal to measure the value that the company is getting compared to the substantial amount that they are investing in R&D. Take for example a local company I studied, a group that designs such system which admittedly, requires money and time. Proper management deliberations and approval should take place first since this will affect the entire organization and the total business in general. The real value of such system is not going to be simply the performance data collected. The real value is realized when these data are used to shape the R&D program for maximum impact on business results.