The Positive Sum Strategy Harnessing Technology for Economic Growth (1986) / Chapter Skim
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Programmed Innovation--Strategy for Success
Programmed Innovation--Strategy for Success
Pages 399-416
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From page 399... ...
In the fixture, virtually every major industry in the developed world, whether now classified as high-tech or smokestack, must in fact be high-tech to succeed in international competition. Industries will survive and thrive only by integrating advanced information, manufacturing, and computing technologies into their designs, products, and processes, and only through high levels of innovation, quality, and reliability.
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From page 400... ...
This is necessitated by new competition, the oil shocks that raised energy costs, deregulation of feedstock prices, He heavy indebtedness of its many customers overseas, the greater international flow of formerly exclusive technology, environmental restrictions, greater productliability problems arising from the increasingly litigious nature of U.S. society and its increasing desire for a riskless world, the decreasing attractiveness of investing abroad (witness the Bhopal disaster)
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From page 401... ...
To answer these questions, I will draw on my experience win Eastman Kodak's Eastman Chemicals Division, of which, in 1965, I was named director of research.
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From page 402... ...
W COOVER EASTMAN CHEMICALS: A CASE STUDY OF THE CHEMICAL INDUSTRY Making Research Central to a Company's Future Our approach to research in 1965 was much like that of other companies.
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From page 403... ...
One critical element in the process was gaining company-wide recognition that research management had a major responsibility for defining the future of the company: that we had responsibility for new products, for new technologies, for new business opportunities to achieve the company goals for growth and profitability—and for providing strategic plans for their achievement. Research needed to be repositioned from the isolation of the ivory tower to involvement with the corporate offices as part of the top-management team.
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From page 404... ...
We project the future technological, economic, market, political, and social occurrences that can be expected to have an impact on the products and technology in each business segment; and we try to determine the hme frame for each. We identify the new products Hat will be required to maintain our current market share, and we define new product opportunities that could lead to significant growth for us in the business.
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From page 405... ...
The next higher level of planning in our company is one that deals win a grouping of business segments which share raw materials and production facilities. We call these product streams.
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From page 406... ...
Finally, there is a level of planning that covers the total company. At this level, the plans for the four major product streams are optimized from an overall corporate point of view, and plans for developing new businesses are incorporated.
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From page 407... ...
Looking at the elements building up to the goal helps us quantify for each business segment what needs to be done from an R&D point of view toward achieving the company goal. The gap between the base program and Me line represented by the stretch position in Figure 2 represents ~ challenge to R&D to find ways to make attractive opportunities (which are already identified)
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From page 408... ...
projected products and processes 3. innovation projects
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From page 409... ...
This process of needs identification results in a needs list, which shows our R&O scientists and engineers the kinds of things that the company requires for continued progress toward its goals. As progress is made toward a solution to He need and we reach the point where the R&D manager judges Hat there is a better Han 50 percent chance that He product or process can be successfully commercialized, the project then becomes a "projected product or process."
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From page 410... ...
As additional experimental work is done on one of these projects and the scientist or engineer reaches the point where he has developed a specific concept that will satisfy He need and which he believes the company should push forward to commercialization, the product or process moves into the third stage, He "innovation project" stage. This is ~ critical and sensitive phase in the life of a project, and we believe that our R&D effectiveness can be greatly influenced by how we handle it.
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From page 411... ...
: ,, .. ., , : hi:: ~ 1 -I 1 ~ 1 :1 ~1 ~~:~ ~ ~~ 1 ~ 1 ~~: 1975 1976 1977 1978 1979 1 980 1981 1 982 1 983 FIGURE 4 Product and process achievement value-to-cost ratio, Eastman Chemicals Division, 1975-1983.
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From page 412... ...
Twenty percent of the budget request can be for pioneering research. New products and new technology count on the company's bottom line, but we also recognize that the innovation process is centered on creative people, and we must allow and provide for scientific freedom.
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From page 413... ...
We develop~ed the skills and capabilities for programmed innovation. INTEGRATING TECHNOLOGY WITH CORPORATE STRATEGIC PLANNING That is the story of Eastman Chemicals.
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From page 414... ...
to show how well we had done, not why we had done so well or so poorly. We are now entering the third stage in the evolution of strategic planning, in which the thinking is based on the recognition that technology has become of primary importance in domestic and international competitiveness, market share, and financial performance and must therefore be reflected in the bases for corporate plans and strategies.
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From page 415... ...
R&D is no longer isolated in an ivory tower in progressive companies. Increasingly, business managers whose culture is usually different— a shorter time horizon, more financially oriented, less concerned about peer recognition must be synchronized with and knowledgeable about innovation to obtain truly novel results and avoid arteriosclerosis of the organization.
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From page 416... ...
In Be future, virtually every major industry in the developed world, whether now classified as high-tech or smokestack, must in fact be high-tech to succeed in international competition. Industries and their employees will survive and thrive only by integrating advanced information, manufacturing, and computing technologies into their designs, products, and processes, and only through high levels of innovation, quality, and reliability.
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