1
Creating a Culture for Innovation and Rapid Technology Transition

The concept of the "valley of death" has become an icon for the difficulty of successfully commercializing or implementing proven technologies.

WHAT IS TECHNOLOGY TRANSITION AND WHY IS IT DIFFICULT?

In his book Diffusion of Innovation, Everett M. Rogers poses the question "What is so difficult about technology transfer?" and concludes that "technology transfer is difficult, in part, because we have underestimated just how much effort is required for such transfer to occur effectively."1 Rogers defines technology transfer as a communication process:

The conventional conception of technology transfer is that it is a process through which the results of basic and applied research are put into use by receptors. This viewpoint implies that technology transfer is a one-way process, usually from university-connected basic researchers to individuals in private companies who develop and commercialize a technological innovation…. Most scholars realize that technology transfer is really a two-way exchange. Even when technology moves mainly in one direction, such as from a university or a federal R&D lab to a private company, the two or more parties participate in a series of communication exchanges as they seek to establish a mutual understanding about the meaning of the technology. Problems flow from potential users to researchers, and technological innovations flow to users, who ask many questions about them. Thus technology transfer is usually a two-way, back-and-forth process of communication.2

Embodied in this definition of technology transfer is the importance of a long-term partnership between the creators and the end users of the new technology. This partnership drives an iterative process of development, implementation, and acceptance. The view of technology transfer as a collaborative process among stakeholders is consistent with presentations made at the November 2003 Workshop on Accelerating Technology Transition by speakers from industry, academia, and the defense sector (the agenda of the workshop is presented in Appendix B). Many ongoing programs are designed to facilitate technology transition to the defense sector and there are many success stories. The particular challenge addressed here is the rapid transition of new materials. Because materials in and of themselves are rarely products that can be directly linked to defense needs, the need for continuous communication between developers and users is especially critical. This chapter addresses the

1  

E.M. Rogers. 2003. Diffusion of Innovation, 5th ed. New York, N.Y.: Free Press, p. 152.

2  

Rogers, 2003. See note 1 above, p. 150.



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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems 1 Creating a Culture for Innovation and Rapid Technology Transition The concept of the "valley of death" has become an icon for the difficulty of successfully commercializing or implementing proven technologies. WHAT IS TECHNOLOGY TRANSITION AND WHY IS IT DIFFICULT? In his book Diffusion of Innovation, Everett M. Rogers poses the question "What is so difficult about technology transfer?" and concludes that "technology transfer is difficult, in part, because we have underestimated just how much effort is required for such transfer to occur effectively."1 Rogers defines technology transfer as a communication process: The conventional conception of technology transfer is that it is a process through which the results of basic and applied research are put into use by receptors. This viewpoint implies that technology transfer is a one-way process, usually from university-connected basic researchers to individuals in private companies who develop and commercialize a technological innovation…. Most scholars realize that technology transfer is really a two-way exchange. Even when technology moves mainly in one direction, such as from a university or a federal R&D lab to a private company, the two or more parties participate in a series of communication exchanges as they seek to establish a mutual understanding about the meaning of the technology. Problems flow from potential users to researchers, and technological innovations flow to users, who ask many questions about them. Thus technology transfer is usually a two-way, back-and-forth process of communication.2 Embodied in this definition of technology transfer is the importance of a long-term partnership between the creators and the end users of the new technology. This partnership drives an iterative process of development, implementation, and acceptance. The view of technology transfer as a collaborative process among stakeholders is consistent with presentations made at the November 2003 Workshop on Accelerating Technology Transition by speakers from industry, academia, and the defense sector (the agenda of the workshop is presented in Appendix B). Many ongoing programs are designed to facilitate technology transition to the defense sector and there are many success stories. The particular challenge addressed here is the rapid transition of new materials. Because materials in and of themselves are rarely products that can be directly linked to defense needs, the need for continuous communication between developers and users is especially critical. This chapter addresses the 1   E.M. Rogers. 2003. Diffusion of Innovation, 5th ed. New York, N.Y.: Free Press, p. 152. 2   Rogers, 2003. See note 1 above, p. 150.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems challenges of creating a culture that fosters innovation and rapid technology transition. As discussed in the following sections, success stories suggest that, in addition to the participation of all stakeholders, characteristics of such a culture include flexibility, a willingness to take risks, cross-communication, and the existence of champions. THE CULTURE OF INNOVATION AND RAPID TECHNOLOGY TRANSITION Experience in industry and research in the fields of history of technology, business, and social studies of science point to ways in which institutional, social, cultural, and historical factors influence the adoption, implementation, and long-term acceptance of new technology. Even though there is a large body of literature from these fields, exploring and understanding the adoption of technology from this perspective are often overlooked, or ignored as being too complex to consider. For scientists and engineers, there is a tendency to see only technological solutions for failures in technology transition—the problem is formulated as one of first measuring and quantifying properties, and then of demonstrating performance, manufacturability, and cost-effectiveness. The remaining problem is one of communication, for which scientists and engineers may also see technological solutions (virtual reality, information visualization, Internet meetings, and so on). This approach overlooks the fact that the introduction and acceptance of new technology often depend more on social, cultural, and historical factors than on technological merit. And technological merit itself is subjectively defined, even if properties can be measured and quantified. As discussed in detail in the following sections, fascinating historical examples demonstrate how social and cultural factors influence the development, implementation, and use of new technologies. Just recently, the independent committee investigating the disaster involving the space shuttle Columbia highlighted the importance of institutional culture in its findings, pointing to the self-protective culture of the National Aeronautics and Space Administration (NASA) as playing a key role in the disaster.3 Another issue that is particularly relevant for the transition of technology to the defense sector is the problem of introducing new technology into existing systems. It is well known that once technologies become entrenched, change is very difficult to effect. The technologies themselves become locked in through the coevolution of various technological systems. In the defense arena, the problem is exacerbated by practices that govern requirement setting, specification, and acquisition. This situation leads to historical path dependencies that constrain choices. For example, if there is a long history of using steel, the existence of detailed documents that govern use (standards and testing procedures) makes it more difficult to introduce new materials. Social Dynamics and Decision Making Addressing nontechnical issues that affect technology transition requires an understanding of social dynamics, including knowledge of who makes relevant decisions and who is accountable for what. In an establishment as complex as the military, not every person is responding to the same requirements and drivers. For example, reducing costs is likely to be at odds with other goals such as improving survivability and mobility. The evaluation and prioritization of competing objectives, and, ultimately, how decisions are made, are increasingly complex. In general, the chain of command and the decision-making process are much more hierarchical in the military than in private companies. This is especially true for innovative companies that are models for accomplishing successful technology transition. One result of a hierarchical structure is that a materials specialist in the military is likely to be several steps removed from decisions that govern the adoption of new technologies, whereas the expert 3   B. Berger and L. Rains. 2004. Aldridge Says NASA HQ Overhaul, Approval of Agency Budget Top Priorities. SPACE.com, July 16. Available at http://www.space.com/news/aldridge_report_040616.html. Accessed July 2004.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems on a Formula 1 race car team or in a small start-up company will likely have sole responsibility for materials choices. A group’s size and social dynamics are key variables in this regard. A sports team is a relatively small group focused on a single, well-defined goal: winning the race. In contrast, the military is a huge, complex organization, with a wide range of short- and long-term goals. It is far easier to identify technological strategies that will win a race than to identify those that will win a war. A challenge for the military in trying to accelerate the use of new materials is that of understanding how to extrapolate success stories from industry and sports venues to the defense sector. For example, for the aerospace industry, weight and strength requirements in materials are paramount, and they make material choices critical. It is unclear whether material properties have the same importance at the highest levels of the military. While the value of a new material may be evident to the technical team or end user, the material’s adoption will likely depend on the real or perceived impact of the material or technology on high-level military goals. The Culture of Innovation In his presentation at the workshop, Joseph Tippens, executive vice president for business development, Universal Chemical Technologies, stated that technology and culture drive technology acceleration. He quoted William Souder, author of Managing New Product Innovations,4 in presenting a list of traits with a strong negative correlation to technology acceleration: Degree to which jobs are narrowly defined; Degree to which authorities are perceived to be narrowly defined; Degree to which information flows are perceived to be top down in a hierarchy; Degree to which loyalty and obedience are perceived to be required; Degree to which rules, policies, and hierarchical organizational levels are perceived to be the character of the organization. In contrast, Tippens also presented the following list of traits that create a culture for technology acceleration: Constant adjustment of tasks through "viral" cross-functional interaction; A sense of responsibility that replaces unquestioned authority and a shared commitment to success that exceeds defined functional roles; Communication that flows in all directions without regard to hierarchy; Emotional commitment to milestone achievement that overrides complex rules and policies; and Originality and creativity that are valued over short-term economic efficiency. General Alfred M. Gray, U.S. Marine Corps (retired), also addressed institutional culture, saying that organizational characteristics can impede or enhance transition. He commended the Defense Advanced Research Projects Agency (DARPA) for an impressive number of transitioned products, citing the agency’s operational characteristics and policies as contributors to this success. Consistent with the model described above for accelerated technology transition, he described DARPA’s operation as small, flat, and flexible, with industry and academia as the principal performers. He also listed flexibility as a 4   Wm.E. Souder and J.D. Sherman. 1994. Managing New Product Development. New York, N.Y.: McGraw Hill, p. 164.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems TABLE 1.1 Typical Behaviors That Result in Cultural Differences Ideation People Execution People Are prototype driven. Are requirements driven. Learn by doing. Want to do it right the first time. Say: what if? Say: prove it. Nurture infant technology. Want to: kill the weak and move on. Figure out: can it be done? Decide: should we do it? Fill the funnel: create new options. Narrow the funnel: increase focus. Objective: understanding. Objective: delivery. positive characteristic, as well as that of having many nongovernmental managers. The Role of Individuals Every major institution relevant to the discussion has subcultures that play a critical role in the development and transition of new technologies. As exemplified in the following sections, the interactions between subcultures within an organization play a vital role in determining the success or failure of technology transition. Successfully managing this interaction requires individuals who understand the values, working styles, and goals of different groups, and who appreciate the contributions that each group makes. These individuals are critical in fostering the communication that is the essence of successful technology transition. Several workshop participants described some typical behaviors of people in discussing cultural differences that complicate deal making (see Table 1.1). Such differences in mission and approach can create culture clashes within institutions as well as between developers and outside customers. Both kinds of approaches are clearly necessary for innovation and effective technology transition, pointing to the importance of leaders and champions who can effectively manage people from both cultures throughout development and implementation. The engineers and scientists who are critical for innovation and development must be allowed to experiment, think freely, and fail on occasion. Ultimately, however, the successful transition of new technology will depend on the ability of managers to narrow the focus to technologies for which there is a compelling need and adequate business case, and on champions who will remove barriers, garner support, and ensure successful implementation and acceptance. The importance of leadership was a recurring workshop theme. Tippens emphasized the importance of upper management in fostering cross-functional cooperation, communicating a sense of urgency, empowering people with authority to take risks, and rewarding performance. Several case studies presented at the workshop emphasized the importance of a champion to pave the way for a new technology or material. Perhaps the role of champions was most succinctly articulated by General Gray, whose advice was to "reduce the number of people whose job it is to say no, get rid of the risk-averse individuals, and figure out how to get around the people paid to be in your way." Accomplishing such objectives clearly requires champions with sufficient authority to remove barriers and manage what can be significant opposition to change. General Gray also pointed out that there is a difference between education and training, emphasizing a need for improved education. In a hierarchical structure, people are highly trained in very specific aspects of their jobs, and generally have relatively narrow job descriptions with a strict chain of command. They are not educated on the overall goals of the program or on alternate strategies to accomplish these goals. Strictly defined procedures, processes, and manuals can conflict with the flexibility required in an innovative organization. An organization with a flexible culture would expect constant change, encourage risk taking, and call upon managers to make immediate decisions.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems BRIDGING THE VALLEY OF DEATH Volumes have been written about failures in technology transition and the disastrous consequences that befall companies that fail to recognize and adopt pivotal new technologies. For the military, the danger of not implementing new technologies is not that the DoD will go out of business, but that defense systems will be obsolete, expensive, and ineffectual. In Mastering the Dynamics of Innovation, James Utterback writes: A critical pattern in the dynamics of technological innovation—and one that should give every business strategist a great deal of discomfort—is the disturbing regularity with which industrial leaders follow their core technologies into obsolescence and obscurity. Firms that ride an innovation to the heights of industrial leadership more often than not fail to shift to newer technologies. Few attempt the leap from the fading technology to the rising challenger; even fewer do it successfully.5 At the workshop, Tippens contrasted what he terms "high-velocity" technology firms to industrial giants that cling to core competencies. He outlined the characteristics of these technology firms, as having— Shorter, more iterative processes than those of conventional firms; Simultaneous collaborative development; A passionate focus on end users’ needs; A willingness to take risk, with risk anticipated and alternatives planned for; and Rapid prototypes, and early alpha and beta releases for immediate feedback. These attributes are consistent with those identified by other workshop speakers as being essential for rapid technology transition. Iterative processes and collaboration are consistent with fostering communication and involving end users in the development process. Michael F. McGrath, Deputy Assistant Secretary of the Navy (Research, Development, Test and Evaluation), talked about the importance of involving stakeholders in the decision-making process, and gave several examples of successful transition that involved joint Navy-industry teams working together to research and select the best path for technology insertion. Focusing on end users’ needs leads to the development of a business case for product implementation. In the commercial sector, marketing plays a key role. If a technology concept is marketed to the customer as being ready for production when it is not, the corporation takes on a significant amount of risk in bringing the concept to production. If the new technology is marketed to the customer as a concept that is not mature but that can be available in, for example, 2 to 5 years, the customer might see that the company is thinking in terms of advanced concepts and positioning itself as well as the customer for the future. Marketing plays a significant role in the success or failure of a technology. Marketing can be viewed as the rope bridge that spans the valley of death. Strain on the rope is created if the marketing department releases a concept to customers as being currently available. Customers then will not purchase the existing product but will wait for the company to implement the new technology. Such a delay in orders would cause current production to suffer. This pressure then forces the new technology into production before it is mature enough. The bridge could then break, and the champions and the technology they developed are left in the valley of death with a technology they cannot transition to production. Marketing strategies must therefore be controlled by the corporation. Strategically, the marketing department must be savvy enough to understand the technology and when it is reasonable to 5   J. Utterback. 1994. Mastering the Dynamics of Innovation. Boston, Mass.: Harvard Business School Press, p. 162.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems make it available to customers. Acceptable risk and the consequences of failure were recurring themes at the workshop because of their influence on technology decisions. For example, because new technology is a target for litigation in the auto industry, risk aversion has hampered the use of materials other than steel. There was agreement among all workshop participants that creating an innovative environment means anticipating and accepting risk. Rapid prototypes and the importance of early feedback were also recurring themes at the workshop. McGrath reported that it is important to get the technology to the fleet early on so that the forces learn about and experience the capabilities of the technology. General Gray called on workshop participants to bet on the future, saying, "If it works, put it in the field." Flexibility was also identified as critical for effective technology transition, so that change can be accommodated throughout the development process. Many of the essential ingredients identified during the workshop as being necessary to create a culture for innovation and technology transition are illustrated in the story of the early history of Xerox Palo Alto Research Center (PARC), a research and development group founded by the Xerox Corporation in 1970 on the campus of Stanford University. The failure of the Xerox Corporation to commercialize most of the exceptionally innovative computer technology created by the group is one of the most famous examples of failed technology transition.6 The Xerox PARC group was charged with creating the office of the future. In Diffusion of Innovation, Rogers writes that among the computer technologies developed were the world’s first personal computer, the mouse, laser printing, and local-area networks.7 He attributes the incredible success of Xerox PARC to such company characteristics as outstanding personnel; a nonhierarchical management style that encouraged the free exchange of information and allowed an extraordinary degree of personal freedom; employees using the technology that they developed; and timing (judging that the time was ripe for innovations in personal computing). Resources were also abundant: Xerox invested $150 million in the research organization during Xerox PARC’s first 14 years. Of the computer technologies developed, only laser printing was commercialized by Xerox. Rogers attributes Xerox’s failure to capitalize on other inventions to three major factors: (1) The company saw itself as being only in the business of office copiers, which is consistent with the characterization of many industry leaders as having a tendency to focus on what they see as their core competencies; (2) there were no effective mechanisms for transitioning the technology to the company’s manufacturing and marketing divisions, which underscores the importance of communication and the active involvement of all stakeholders throughout the development cycle; and (3) there was a clash of cultures between the R&D group in California and Xerox headquarters on the East Coast. On this last point, Rogers writes: The button-down organizational culture at the Xerox Corporation headquarters clashed with PARC’s freewheeling hippie culture. When East Coast corporate leaders traveled to PARC, they noted disapprovingly the beanbag chairs, the endless volleyball games, and the laidback management style of Bob Taylor. Unfortunately, Xerox executives rejected the promising personal computer technologies at PARC, as well as the work styles and lifestyles they observed there.8 Success stories in the literature and those presented at the workshop are similar in terms of the factors identified as essential to achieving rapid and successful technology transition. A particularly relevant study is a 2001 report by the Potomac Institute for Policy Studies entitled Transitioning DARPA Technology.9 The report focuses on how well DARPA transitioned products into military systems over the 6   D. Smith and R. Alexander. 1988. Fumbling the Future: How Xerox Invented, and Then Ignored, the First Personal Computer. New York, N.Y.: W. Morrow. 7   Rogers, 2003. See note 1 above, pp. 153-155. 8   Rogers, 2003. See note 1 above, pp. 155. 9   Potomac Institute for Policy Studies. 2001. Transitioning DARPA Technology. Arlington, Va.: Potomac Institute for Policy Studies. Available at http://www.potomacinstitute.org/research/darpa.cfm. Accessed July 2004.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems FIGURE 1.1 Department of Defense budgets for research, development, testing, and evaluation (RDTE) and procurement over time. SOURCE: General A. Gray, U.S. Marine Corps (retired), Military Needs for Technology Transition, briefing presented at the Workshop on Accelerating Technology Transition, National Research Council, Washington, D.C., November 24, 2003. past 40 years. One of the goals of the project was to identify factors that affect the agency’s transition rate. Consistent with the message delivered by several speakers at the workshop, flexible management and contracting procedures were identified as being "a major benefit in dealing with industry and, ultimately, in transitioning to commercial and military markets."10 An impediment to transition identified in the report is that DARPA has few effective mechanisms for continuing to market its products when programs end, particularly when a program manager leaves DARPA. In agreement with speakers at the workshop, the report acknowledged the importance of champions: "Transition success was highly dependent on the individual DARPA program managers, industry program managers, and Service contracting agents acting as a product champion team."11 The report concludes: "It is likely that any structure or procedure that limits the program manager’s sense of responsibility or options to transition his or her products will negatively affect the Agency’s rate of transition."12 MAKING THE BUSINESS CASE Joseph Tippens, Universal Chemical Technologies, argued that there is a strong and unique business case for materials science, which can help the DoD meet its goals in several areas, beginning with the weight reduction of systems and subsystems and leading to improved mobility, survivability, and lethality, while also offering significant capital and operating and maintenance cost savings. Michael McGrath, the Deputy Assistant Secretary of the Navy (Research, Development, Test, and Evaluation), emphasized that each successful technology transition is ultimately a deal that makes sense to all partners. For the commercial side, he listed three necessary conditions for a successful transition: a perceived need, a potentially effective and suitable solution, and a business case for investing. For the government side, he added two additional conditions: budgeted resources and an acquisition method. Dramatic changes in recent years in both the private and government sectors have changed technology needs as well as budgets and funding priorities and the way that the military does business. This has created new challenges in technology transition to defense industries. General Alfred Gray, USMC (retired), told the committee that events in recent history that have influenced technology transition to the military include the end of the Cold War, the increased pace of technology development in the 10   Potomac Institute for Policy Studies, 2001. See note 9 above, p. ix. 11   Potomac Institute for Policy Studies, 2001. See note 9 above, p. xi. 12   Potomac Institute for Policy Studies, 2001. See note 9 above, p. x. 1998: RDTE is 85% of procurement

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems FIGURE 1.2 Competing pressures that drive the development process for new materials. SOURCE: R. Schafrik, GE Aircraft Engines, Technology Transition in Aerospace Industry, briefing presented at the Workshop on Accelerating Technology Transition, National Research Council, Washington, D.C., November 24, 2003. commercial sector, globalization, lower DoD budgets, and a more diffuse threat spectrum. He presented data (Figure 1.1) showing that in the past 10 years, the budget for procurement has been reduced substantially compared with the budget for research, development, testing and evaluation. A result of the sharp reductions in the procurement budget is that an increasing number of technologies are chasing fewer systems. He reported that the decreasing number of major developmental systems has reduced the opportunities for transitions to the military. As illustrated in Figure 1.2, the development process is subject to competing pressures. Business needs, driven by customer needs and competitive market forces, in turn drive materials development. Improving performance and lowering cost are key factors in satisfying business and customer needs. Robert Schafrik of GE Aircraft Engines emphasized that the high introductory cost of new materials and processes must be offset by compelling customer benefit. It is also important to understand that the business process is iterative, making it imperative to be able to adapt to changing conditions and requirements. At the workshop, Tippens outlined the business case for accelerated development. As indicated FIGURE 1.3 (a) Development cost and (b) return on investment for accelerated and classical development paths. SOURCE: J. Tippens, Universal Chemical Technologies, Inc., Technology Transition from Small Business Industry, briefing presented at the Workshop on Accelerating Technology Transition, National Research Council, Washington, D.C., November 24, 2003.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems TABLE 1.2 Typical Development Times for New Materials Development Phase Development Time Modification of an existing material for a noncritical component 2 to 3 years Modification of an existing material for a critical structural component Up to 4 years New material within a system for which there is experience Up to 10 years—includes time to define the material’s composition and processing parameters New material class Up to 20 years and more—includes time required to develop design practices that fully exploit the performance of the material and establish a viable industrial base   SOURCE: R. Schafrik, GE Aircraft Engines, Technology Transition in Aerospace Industry, briefing presented at the Workshop on Accelerating Technology Transition, National Research Council, Washington, D.C., November 24, 2003. by the graphs in Figure 1.3, initial costs are higher for an accelerated development path than for classical development. However, there is an overall cost savings and a faster return on investment. Accelerating Materials Development In his presentation at the workshop, Robert Schafrik emphasized the need to drastically reduce development times for new materials, saying that a decade is too long to mature new materials technology. As summarized in Table 1.2, he reported that typical development times range between 2 and 20 years. He called for rapid assessment of the value of new materials technology. Schafrik contrasted the current approach to materials transition with that of the past and with what he expects it to be in the future. He described the past development approach as an empirical and heuristic-based "shotgun" approach by which, for example, an application would commit to an alloy before the alloy had been fully developed. There was an emphasis on characterization of the microstructure and limited properties, leading to many trials over many years. The issue, of course, is that it is impossible to test everything. As illustrated in Figure 1.4a, the past approach to the development process was sequential: a material was first developed, then improved, then modified to reduce costs and prepare for production, with testing cycles at each step. This process included feasibility studies, subscale demonstration, full-scale trials, and qualification. Schafrik described the situation for "technology push," in which materials were marketed to systems engineers and designers, typically in materials and processes organizations, with the goal of lining up funding commitments. A problem in this regard is the tendency to oversell. In contrast, the current development approach can be described as having begun to exploit material and process modeling and simulation. Schafrik credits DARPA’s Accelerated Insertion of Materials (AIM) program for having revolutionized the thinking on and approach to materials development. He reports that fundamental knowledge is being used to develop models that allow behavior to be predicted, resulting in fewer and more focused iterations, and that statistical methods are being used for disciplined experimental design and analysis of results. As illustrated in Figure 1.4b, the current development process is integrated, with design practice, materials development, and manufacturing being guided by a disciplined development process leading to production scale-up. Regarding customer needs, Schafrik describes systems engineers and designers as setting top-level requirements that are based on customer needs, with material and processing operations determining specific material requirements. He estimates the time frame for the introduction of a new commercial product to be between 18 and 24 months from the time the product concept is frozen to the point of product validation. Commercialization of such a product requires having suppliers onboard or establishing a manufacturing capability. Schafrik’s vision of the development approach of the future entails the full exploitation of materials modeling and simulation. He envisions modeling being used in conjunction with focused testing in order

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems FIGURE 1.4 Models of materials transition. SOURCE: R. Schafrik, GE Aircraft Engines, Technology Transition in Aerospace Industry, briefing presented at the Workshop on Accelerating Technology Transition, National Research Council, Washington, D.C., November 24, 2003. to obtain accurate estimates of material properties and an understanding of microstructure evolution, as well as realistic estimates of the behavior of realistic samples, with typical defects and long-term behavior in harsh environments. Figure 1.4c characterizes the future development process as being fully integrated, with design practice, materials development, and manufacturing all integrated in a seamless computational environment, leading to production scale-up. Modeling and simulation were highlighted by several workshop participants as making a positive contribution to accelerating materials development. Schafrik pointed to successes in superalloy disk

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems BOX 1.1 Methodology Adopted by the Accelerated Insertion of Materials–Composites (AIM-C) Program to Accelerate Materials Insertion The partners in the Accelerated Insertion of Materials-Composites (AIM-C) program sponsored by the Defense Advanced Research Projects Agency wrestled first with the question: At what point is a material “transitioned” or “inserted”? Candidate endpoints included (1) the adoption of the materials technology by a design team, (2) certification of the structural component by the military, or (3) the successful use of the structural component in the field. AIM-C adopted the definition that a material would be considered as being transitioned when the structure was certified for use by the military. With this definition, AIM-C was then tasked with providing the foundation for the decision to certify. Thus, the AIM-C team had to include not only material developers and design personnel, but also the military officials who would need to recommend the component for certification. The composition of the team reflects a major issue raised by participants at the Workshop on Accelerating Technology Transition regarding partnership between creators and end users of new technology. Once the definition of the endpoint was agreed, AIM-C partners tackled the concept of a window of opportunity. During the design process, the design team evaluates and selects materials at a given period, which may be only a few weeks or months long. During this window, the technical and business cases for new technology insertion must be made, and the relevant material parameters must be characterized with sufficient certainty that the program could go forward with the material at an acceptable level of risk. This limitation adds an element of urgency to the insertion process. If the window is missed, the material must wait for another opportunity. Next, the AIM-C team assembled people with considerable experience in materials development and insertion and put them through an exercise to identify and categorize many of the issues that can impede or prevent materials insertion. For each of the resultant categories, a scale was developed to assess their maturity. The scale was based on the DoD's Technology Readiness Levels (TRLs), and under each of the nine levels, a series of sublevels, termed xRLs, was developed. These sublevels were designed to extend the maturity assessment to individual disciplines. This exercise highlighted the limitations of individual tools and made it clear that a methodology was needed within which the tools were used. The TRL-xRL matrix thus became the foundation of the AIM-C methodology. (The AIM-C concept of using tools within a larger methodology is addressed in Chapters 1 through 3 in the present report.) The AIM-C team used the TRL-xRL framework to ensure interaction and communication among the relevant personnel. The depth and breadth of the TRL-xRL concept have significant potential to provide structure to future partnerships between technology creators and end users and would provide breadth to the concept of viral development. Finally, the AIM-C program discovered that technology creators and technology users, using the same TRL criteria, will evaluate the maturity of each technology differently. Miscommunication between groups can result from these variations. The AIM-C team worked to develop a TRL scale that was interpreted in the same way by both developers and users. SOURCE: C. Saff. 2004. A New Way to Design Composite Structures. Presentation to the Innovative Design Workshop, Hampton, Va., March 2004, available at http://www.darpa.mil/dso/thrust/matdev/aim/AIM%20PDFs/presentation_2004/general1_a.pdf; accessed July 2004; and Glenn Havskjold, The Boeing Company. Personal communication, March 2004. materials and polymer-matrix composites (see Box 1.1). He also reported that process modeling for casting and forging are demonstrating significant benefits using commercially available software tools; data used to set boundary conditions are crucial. As discussed in Chapter 3, fundamental information input to models and data to validate output are essential to increasing the use of modeling and simulation. Saying that no one agency or company alone can accomplish all that needs to be done in this area, Schafrik called for a partnership between government, industry, and universities to develop and implement materials modeling and simulation tools. More specifically, he recommended that the Office of Science and Technology Policy sponsor a National Initiative for Aerospace Materials Modeling and Simulation (see Chapter 3). He argued that such an

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems initiative is necessary to promote national competitiveness and to develop pre-competitive models and representations, and for the performance of necessary experiments. He pointed out that such an initiative is in line with the recommendations of the President’s Commission on the Future of the U.S. Aerospace Industry, and that it would assist in attracting and retaining top-notch talent for materials science and associated disciplines. Leveraging the Commercial Sector General Gray reported to the workshop that the most significant long-term change in technology transition in the military is the current effort to better leverage the commercial sector. Michael McGrath expanded on this by describing several ongoing programs at the Department of the Navy focused on technology transition. He also reported that the Navy is trying to increase the visibility of emerging commercial technologies by interfacing with venture capital investors. A speaker from the private sector, Joseph Tippens, suggested that the DoD has the opportunity to leverage billions of dollars of private equity and venture capital. He encouraged dual-use commercial development rather than technology development for isolated military applications, pointing out that it is possible to leverage technology platforms on hundreds of systems across all service branches as well. Several workshop speakers discussed the advantages of using commercial off-the-shelf (COTS) technology. McGrath recommended taking advantage of the rapid cycle time of COTS technology to upgrade equipment and reduce system costs, but he also cautioned that change is an inherent aspect of using COTS components and must be planned for—for example, by developing an equipment infrastructure to handle future upgrades. Another advantage of utilizing COTS technology is that it goes a long way toward simplifying the procurement process. In speaking as a strong proponent of leveraging dual-use commercial development and private equity capital as a means of accelerating technology transition to the military, Tippens put forth a model in which industry, venture capitalists, academic research institutions, and the DoD would work together to leverage not only capital, but also information and data (see Figure 1.5). BARRIERS TO TECHNOLOGY TRANSITION The previous sections in this chapter described strategies and cultural aspects that foster innovation and technology transition. This section addresses potential barriers for the specific case of materials transition to the defense sector. Robert Schafrik of GE Aircraft Engines credited Arden Bement13 in pointing out two chicken-and-egg dilemmas that occur in trying to introduce new materials: (1) Designers are reluctant to select a new material until it is evaluated in service, but a new material cannot be evaluated in service until a designer selects it; and (2) new materials do not gain market acceptance until their costs decrease, but costs will not decrease until the material gains market acceptance. These two dilemmas tell us that rapid technology transition will require moving ahead with imperfect information. They also tell us that failure in rapid technology transition is a very real possibility. Workshop speakers unanimously identified risk aversion as a fundamental barrier to innovation and rapid technology transition. The speakers also agreed that new materials should be introduced in the field as early as possible. If all stakeholders are engaged and if the full development and implementation cycle is flexible, early introduction allows maximum interaction between developers and users. This interaction can foster the type of communication that has been identified as critical for successful technology transition. 13   Arden Bement, director of the National Institute of Standards and Technology. Biographical information available at http://www.nist.gov/director/bios/bement.htm. Accessed July 2004.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems FIGURE 1.5 A model for accelerated technology transition to the military that utilizes traditional research institutions and leverages commercial development and venture capital. SOURCE: J. Tippens, Universal Chemical Technologies, Inc., Technology Transition from Small Business Industry, briefing presented at the Workshop on Accelerating Technology Transition, National Research Council, Washington, D.C., November 24, 2003. Another communication issue that arises when customers are not part of the development process is that developers have to market their technology to potential users. This can result in overselling a new material that has not been fully tested. In addressing the difficulty of evaluating new materials, Schafrik reiterated the conventional wisdom that the first information heard about a new material is usually the best thing ever heard about it. He attributes this occurrence primarily to initial claims based on data for a few properties and on test data generated from small lot sizes. He reports that little consideration is given to the effects of processing variations, and that there is a lack of understanding of the fact that defects ultimately determine properties and uses. Involving users in the development process can avoid such miscommunication because material characterization and testing can be tailored to specific applications. Schafrik and other speakers emphasized the need for fundamental information on a variety of material properties, data from laboratory tests, and performance data in order to provide input to models and to validate modeling and simulation results. Collaborative efforts to create materials databases would benefit both the materials and the defense communities. These databases must include more than basic properties, and should extend to thermodynamic data and tribological data, including failure modes. Tippens recounted a recent experience of finding little consistency in materials and tribology testing protocols between cross-system groups, as well as within and across service branches. Such experience points to the need for communication and consistency in how data are reported. Improvement in the consistency and coherency of the data can be particularly important for better leveraging knowledge and capabilities in the commercial sector. Other barriers to rapid technology transition are associated with bureaucratic issues inherent in huge organizations. At the workshop, McGrath called the military’s requirements process a "confounding

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems issue in government acquisition." In addition, the report of the Potomac Institute for Policy Studies concluded: "The Planning, Programming and Budgeting System and other manifestations of the Department of Defense’s bureaucratic processes provide their share of pitfalls along the path [to transition] as well."14 As discussed previously, it can be very difficult to introduce new technology into existing systems, in part because of the existence of detailed documents and standards that govern everything from materials specification and testing protocols to acquisition. Another difficult challenge in technology transition to the military is that constancy of funding to full maturity is seldom available. Tippens addressed cultural differences between venture-capital industries and defense-technology companies that can hinder technology transition, pointing out that budgeting cycles in the defense industry favor established contractors at the expense of smaller companies and start-ups. General Gray reiterated the point, saying that budgetary considerations often discourage opportunity-driven strategies, and McGrath pointed to the 2-year budget lead time as an impediment to rapid technology transition. Another cultural difference involves the development path. The venture-capital industry is based on rapid deployment and market entry, whereas the path in defense industries tends to be much slower. Tippens explained that the time value of money and the internal rate of return in the venture-capital industry, in which the expectation for return on investments is that a critical amount of revenue will be reached in 3 to 6 years, do not match the defense culture. These differences interfere with the ability of the defense sector to leverage private equity capital. CONCLUSIONS AND RECOMMENDATIONS Bridging the valley of death is a challenging, long-term process that begins at the conceptual stage of a new material or technology and continues through its implementation and acceptance. The essence of technology transition is communication. Workshop participants consistently described successful technology transition as a long-term dialogue and partnership between the creators and end users of new technologies. Because materials in and of themselves are rarely products that can be directly linked to defense needs, continuous communication between developers and users is particularly critical in order to ensure that new materials are considered for and ultimately used in components and systems. Prototypes should be put in the hands of potential customers as early as possible so as to foster communication. Management buy-in is essential, as are champions with sufficient authority to remove barriers, garner support, and ensure successful implementation and use. In this view, technology transition is a collaboration among all stakeholders that drives an iterative process of development, implementation, and acceptance. A central theme of the workshop was the importance of creating a culture that fosters innovation, rapid development, and accelerated technology transition. Success stories from industry, sports, and the defense sector point to flexibility, a willingness to take risks, open communication without regard to hierarchy, a sense of responsibility that displaces the need for top-down authority, and a commitment to success that exceeds functional roles as being key elements of the desired culture. Creating such a culture has several fundamental implications: people must be empowered to take risks; failure must be anticipated and planned for; and teamwork and collaboration must be championed over individual accomplishments and success. In this model, the idea that "failure is not an option" is replaced by the understanding that "failure provides lessons learned in an innovative environment." Every major institution relevant to this discussion has subcultures that play a critical role in the development of new technologies and in determining the success or failure of technology transition. The engineers and scientists who are critical for innovation and development must be allowed to experiment, think freely, and fail on occasion. The successful transition of new technology depends on the ability of managers to narrow the focus to technologies for which there is a compelling need and to work with 14   Potomac Institute for Policy Studies, 2001. See note 9 above, p. x.

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems potential customers to develop an adequate business case. Successfully managing this type of interaction requires leaders who understand and respect the values, working styles, and goals of different groups, and who can also effectively initiate and sustain communication among the stakeholders across all organizational and institutional boundaries. A challenge for the military in trying to accelerate the use of new materials is that of overcoming cultural traits associated with hierarchical and rule-bound organizations that impede technology transition and tend to favor traditional defense contractors over smaller companies and start-ups. Overcoming this challenge means decentralizing decision making, simplifying procurement and acquisition processes, shortening budget cycles, providing consistent funding through development and maturation, making greater use of off-the-shelf technology, and valuing innovation over short-term economic efficiency. It is also necessary to update standards and testing procedures that are based on entrenched technologies in order to make it easier to introduce new materials. In general, the operations infrastructure must be flexible enough to meet the demands of highly collaborative, fast-paced, high-risk projects, and must be able to accommodate change during the development process. The technical team and end users must be part of the decision-making process. Although the value of a new material may be evident to developers and customers, in an establishment as large and complex as the military, the adoption and acceptance likely depend on the real or perceived impact of the material or technology on high-level military goals. Although creating a culture for innovation and rapid technology transition requires significant changes and a concerted and sustained effort, the potential rewards are substantial. The case for making these changes to accelerate the transition of materials technologies is particularly compelling because of the unique ability of new materials to contribute to a wide range of technical objectives (e.g., increased mobility and survivability), while also offering significant capital and operating and maintenance cost savings. Although initial costs are higher for an accelerated development path, there is an overall cost savings and a faster return on investment than for classical development. Perhaps even more compelling is that by better matching the development and deployment time frames in the venture-capital industry, the military can leverage dual-use commercial development and billions of dollars in private equity capital. Recommendation 1. The Department of Defense (DoD) should endeavor to create a culture that fosters innovation, rapid development, and the accelerated deployment of materials technologies. Success stories from commercial, sports, and defense industries suggest that the characteristics of such a culture include the following: Acceptance of risk, anticipation of failure, and plans for alternatives; A flexible environment with the ability to accommodate change during the development process; Open communication in all directions without regard to hierarchy; A widespread sense of responsibility and commitment to success that exceed defined functional roles; Valuing of innovation over short-term economic efficiency; and A passionate focus on the end-user's needs. Evaluating and implementing the following actions will enable the DoD to create a culture that fosters rapid development and breaks down barriers to rapid technology transition: Introduce flexibility that reduces budget lead times and provides consistent funding during the technology development stage through full maturity,

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Accelerating Technology Transition: Bridging the Valley of Death for Materials and Processes in Defense Systems Make better use of commercial off-the-shelf technology, Implement shorter and more iterative design and manufacturing processes, Simplify procurement and acquisition processes, Update standards and testing procedures to make it easier to introduce new materials and processes, and Decentralize decision making throughout the process. Leveraging private equity capital and pursuing dual-use commercial development can also be effective. Investments in materials processes and technology will offer the DoD the opportunity to leverage materials technology for defense systems across all service branches.