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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization 3 World-Class Army Research, Development, and Engineering In this chapter the committee establishes a definition of the phrase world-class appropriate for an Army RD&E organization. The major components of a world-class R&D organization, as they apply to an Army RD&E organization, are also discussed, with emphasis on the pillars.1 WORLD-CLASS DEFINED FOR AN ARMY RESEARCH, DEVELOPMENT, AND ENGINEERING ORGANIZATION The phrase world-class as applied to an Army RD&E organization must encompass the basic ideas discussed in Chapter 2. The definition must also recognize the uniqueness of an Army RD &E organization, which is reflected in its vision, mission (including DoD-wide responsibilities), strategy, as well as in other ways. Therefore the phrase world-class must be tailored to incorporate the organization 's philosophy and raison d'être. In the following discussion, the committee uses the Natick RDEC as an example. The Natick RDEC vision is to be the world-class research, development, and engineering team for DoD (see Chapter 1). This vision is to be fulfilled through (1) the development and integration of leading edge technologies and soldier-system capabilities; and (2) a customer-focused, empowered, innovative work force operating in an open, productive, and supportive environment (Business Plan, 1995). 1 General references for this chapter are: Brown and Gobeli, 1992; Dimancescu, 1991; Hodgetts, 1993; Luthans, 1993; Luthans et al., 1995; Matheson et al., 1994; McArthur, 1994; McGill et al., 1992; Ransely and Rogers, 1994; and Senge, 1990. See complete citations in the references listed at the end of this chapter.
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization The Natick RDEC mission statement, which flows from the essentials of its vision, is threefold: (1) to maximize the individual soldier 's survivability, sustainability, mobility, combat effectiveness, and quality of life through research, development, and engineering of rations, food-service equipment, clothing, individual equipment, shelters, airdrop systems, and organizational equipment; (2) to provide the necessary research, development, and engineering to integrate the combat-essential elements of command and control, survivability, lethality, sustainability, and mobility into the soldier system; and (3) to perform similar and related functions for other DoD services and federal agencies (Business Plan, 1995). The Natick RDEC's DoD-wide responsibilities extend into four major areas: (1) commodities (e.g., rations, food-service equipment, and airdrop systems); (2) food and nutrition research, development, testing, and evaluation; (3) the development of tactical shelters; and (4) being the DoD center of excellence for clothing, textiles, and food science and technology (Business Plan, 1995). The Natick RDEC strategy for fulfilling its mission and meeting its responsibilities has five objectives: (1) the development of highly skilled, resolute, innovative personnel; (2) the acquisition of quality equipment and facilities to support a leadership role in technology; (3) the development of integrated management information and communication systems; (4) establishing consistent, stable funding; and (5) the exploration and pursuit of DoD-wide responsibilities2 (Business Plan, 1995). Finally, a definition of world-class appropriate to an Army RD&E organization must take into account the nature of the current DoD environment, which includes shrinking budgets and levels of personnel and increasing numbers of joint ventures and external alliances. The environment can influence the strategy, and ultimately, even the vision of an Army RD&E organization. Although all organizations seeking to compete on a world-class level must concentrate on core competencies and must maintain a strong focus on customer needs, the current environment reinforces these imperatives for organizations like the Natick RDEC. 2 Although the pursuit of DoD-wide responsibilities is a major objective of the Natick RDEC, the committee observes that this objective should not be pursued to a degree that results in a loss of focus on the central mission (i.e., maximizing survivability, sustainability, and mobility and integrating them into the soldier system).
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization The committee believes the preceding discussion applies to Army RD &E organizations in general, as does the following definition: A world-class Army RD&E organization is one that excels in several key attributes by matching core competencies to its mission, thereby fulfilling the needs of soldiers as well as, or better than, similar organizations anywhere in the world. To achieve and maintain world-class performance, an organization must identify and develop the necessary core competencies. The “ core” must be a “bundle” and not just one or two discrete items (Hamel and Prahalad, 1994). In the case of an Army RD&E organization, the bundle includes the ability to move quickly from developing to fielding new, applied technologies. The technological capability must encourage continued development of new generations of products superior to the current products. The required competence comprises a broad range of underlying skills important to designing products, preplanning production, and testing and evaluating prototypes. The organization must be able to identify and use the best outside provider of technologies and competencies that are not available in-house. When identifying and developing core competencies, an RD&E organization must focus on three “test points.” First, each area of competence must make a disproportionate contribution to soldier-perceived value (i.e., the recipients or customers must feel they are getting superior value). Second, the area of competence must make possible the production of unique goods and services judged to be superior, thus helping to set a particular RD&E organization apart from other organizations that produce more generic or less technologically advanced goods and services. Third, the area of competence must be a vehicle for promoting newer, more useful goods and services in the future (e.g., the capability should not be limited to a food-science breakthrough that will be generic within two years). COMPONENTS In Chapter 2, the committee concluded that the major components of a world-class R&D organization are a demonstrated commitment, the five pillars, and the competitive advantages (see Figure 2-1). As discussed in Chapter 2, the committee believes that a demonstrated
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization commitment is the most important component. The pillars, which rest on the demonstrated commitment, support the organization. The competitive advantages result from excellence in the pillars. The committee believes this analogy is applicable to Army RD&E organizations. In the analogy, the pillars stand between the competitive advantages and a demonstrated commitment. As such, the pillars are critical links that shape the entire structure and hold it together. The pillars reflect the properties of both the demonstrated commitment and the competitive advantages. For example, strategic vision (a pillar) yields strategic focus (an advantage) but requires a demonstrated commitment (the base) to be realized. As another example, elements of a demonstrated commitment have to be present in the pillars to create advantages, such as staying the course, a highly stable work force, and continuous improvement.34 Accordingly, the committee believes that the pillars provide the most convenient means of articulating the prominent aspects of world-class performance. The next section concentrates on the pillars.5 PILLARS The number of pillars may vary depending on the nature of the organization. However, the committee believes that the five pillars associated with a world-class R&D organization in Chapter 2 are 3 Commitment can be, and will be, measured in a very practical sense by the methods that appear later in this report. Achievement of world-class performance will necessitate an organizational focus on many concrete elements (e.g., obtaining and keeping high-quality personnel, satisfying customers, providing superior leadership, monitoring outside endeavors for solutions to problems, and stressing organizational learning). Such elements require a genuine commitment of resources. Specifically, if an organization is charged with identifying and fully satisfying customer needs, people and dollars must be allocated intensely and visibly for this purpose. Examination of an organization's operation can clearly show whether this is being done. The specifics of how much time, how many people, and what the funding level should be must be addressed in the context of the individual organization. 4 Similarly, the concept of competitive advantage relates to the methods that appear later. For example, quality personnel, facilities and infrastructure, leadership, cycle time and responsiveness, and capacity for breakthroughs can contribute to competitive advantage. 5 Concentration on the pillars is consistent with the literature reviewed by the committee. The authors of one article, for example, describe the characteristics of world-class organizations in terms of “the major pillars that seem necessary to support world-class stature ” (Luthans et al., 1994).
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization applicable to an Army RD&E organization: (1) customer focus, (2) resources and capabilities, (3) strategic vision, (4) value creation, and (5) quality focus. Each pillar is discussed in more detail below. Customer Focus Pillar Customer focus means being able to identify, anticipate, and respond to customer needs both now and in the future. This focus is on internal as well as external customers. In the external arena, customer focus means anticipating customer (e.g., soldier) needs and developing goods and services that both meet and exceed customer expectations. As a result, the customers are more than pleased with the results; they express both surprise and delight with the efforts of the organization to provide for their needs. In the internal arena, customer focus is manifested through the cooperation and coordination of effort. Members of the RD&E organization must understand their jobs collectively and be aware of how they must interact to accomplish goals efficiently and effectively. Customer satisfaction and customer involvement are crucial to success. For an Army RD&E organization that has DoD-wide responsibilities, market diversification from Army-unique products to products that satisfy multicustomer (i.e., multiservice, other federal agencies, and U.S. allies) needs is also important. In addition, organizational structures, processes, and jobs must be carefully evaluated and designed (or redesigned) to eliminate red tape and ensure a smooth flow of operations that support the customer. Information systems must be designed to monitor customer reactions and predict changing needs, and this information should be fed back into the operation. These features make for a seamless organization in which all departments and personnel cooperate and customers are delighted with the results. Resources and Capabilities Pillar Resources and capabilities are the assets and talents with which the RD&E organization creates value for the customer. At the center of this pillar is the quality of personnel, people who work directly for the organization. Their RD&E capabilities, skills, and talents are critical to the success of the organization. Closely connected are the quality of the facilities and infrastructure, everything from applied information
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization technology and the use of external resources to important technologies used by each directorate (i.e., a wide range of assets from high-technology computers to standard office equipment). Also included are the current operating structure, which determines how the enterprise is organized; how computer links are created between military scientists and engineers and with outside sources; support services that are part of the RD &E network; safety and regulatory compliance as they relate to various resources; and the external support system available to research staff for specialized assistance (e.g., outside vendors, contractors, and the academic community). All of these contribute to an effective organizational climate that empowers personnel and encourages overall teamwork, thus enhancing world-class performance. Another aspect of this pillar is the budget that supports these activities and influences the level of proficiency and expertise. World-class RD&E organizations have sufficient budgets to sustain high levels of performance. Strategic Vision Pillar A strategic vision is a mental view of the type of organization that senior-level management would like the enterprise to become (Wheelen and Hunger, 1995). In a world-class organization this vision is communicated indelibly to all personnel so that they share the same mental view, which must be translated into key elements that will make the vision a reality. For example, to the extent that an RDEC wants to become a leader in quality and service, essential aspects of quality and service must be pinpointed for improvement,6 and appropriate measurements must be developed to monitor critical areas of progress. There are several ways to communicate a strategic vision, all of which are related to effective organizational leadership. One is through training and development programs. Another is through carefully developed organizational channels. A third is through a reward and recognition system that reinforces desired behavior. 6 To illustrate this point, the committee notes that the vision of the Mobility Directorate at the Natick RDEC is “to be the global leader for providing quality solutions for the mobility needs of warfighters and peacekeepers” (Doucette, 1996).
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization The strategic vision and the mission should be aligned and set the stage for the plan to follow. A typical sequence of activities follows. The vision helps determine the mission, from which the objectives and strategy are formulated in a way that ensures anticipatory strategic planning (e.g., anticipating contingencies and managing turbulence without compromising the mission). Then the strategy is implemented, and control procedures are used to determine results and make changes through effective leadership. The vision also helps ensure stakeholder buy-in.7 Value Creation Pillar Value creation is the ability to produce or increase benefits perceived by customers so they feel they are getting more value than they expected or previously received (Porter, 1985). Paying customers usually perceive this value based on a cost-benefit determination. If customers receive benefits without paying directly, the perceived value is often based on a comparison of previous and current benefits. Value creation often depends largely on customer perception, and certain features and characteristics of a product may account for a large part of the value being created (Bounds et al., 1994). For example, if soldiers are given new boots specially designed to keep their feet warm, they may perceive these boots to be far better than the previous ones. However, if the new boots are heavier and more difficult to buckle than the previous ones, they may be perceived as poorer than the previous ones even if they keep the user's feet warm. An important aspect of value creation is cycle time and responsiveness. As the time needed to create and deliver a product decreases, the product is supplied faster or supplied to more people, thus creating overall greater value from the completed product. Another aspect of value creation is the proper portfolio of elements for marketing a product. For example, packaging that keeps food fresh can add to the value of the product. However, if the food is not very tasty, freshness may add little, if any, value. So there must be a proper 7 The American Heritage Dictionary of the English Language defines stakeholder as “one who has a share or an interest, as in an enterprise.” In the context of an Army RD&E organization, stakeholders include both internal and external customers as well as interested parties who do not use the products of the RD&E organization directly.
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization mix of complementary elements based on the requisite product performance. The value of work in progress is influenced by customer perception of prior RD&E programs and the ability of product managers to meet customer requirements and deliver products on time and on budget. Greater value may be assigned to RD&E programs that have historically enjoyed higher customer satisfaction, and this value may translate into a strong argument for stabilizing RD&E funding. Quality Focus Pillar Quality is a distinctive attribute of a good or service that is valued by a customer; quality focus is the ability to continue striving for higher quality. The commitment to quality often results in breakthroughs. One way world-class organizations achieve a quality focus is by continuous improvement ( Hodgetts, 1996). There are two distinct, yet interdependent, approaches to continuous improvement. One is innovation, which results in dramatic increases in quality brought about by new inventions, technological breakthroughs, and the application of new theories. The other is constant improvement, which is characterized by small but continual increases in quality. Both involve structured processes. Other ways to promote quality focus are (1) effective training and development programs that help participants learn new and better ways of doing things and, in the process, help create a learning environment; (2) empowering people to redesign their jobs to increase quality; and (3) benchmarking, which compares current performance with the performance of other enterprises.8 Finally, quality focus can be created and sustained through a carefully crafted reward and recognition system that encourages continuous improvement and rewards those who participate and contribute to bottom-line results. 8 There are two kinds of benchmarking. One, known as competitive benchmarking, involves identifying similar RD&E organizations that are judged best in class and copying practices that will increase quality. The other, known as generic benchmarking, involves targeting improvements (e.g., reducing cycle time) and examining how they are achieved in competitive and noncompetitive industries. These efforts often result in information that can be used to improve operations.
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization TABLE 3-1 Important Features of the Five Pillars Pillars Characteristics Customer Focus Customer Satisfaction Customer Involvement Market Diversification Resources and Capabilities Personnel Quality Budget RD&E Capabilities, Skills, Talents Use of External Resources Important Technologies Organizational Climate Information Technology Facilities and Infrastructure Strategic Vision Alignment of Vision and Mission Anticipatory Strategic Planning Stakeholder Buy-In Leadership Value Creation Proper Portfolio Product Performance Cycle Time and Responsiveness Value of Work in Progress Quality Focus Capacity for Breakthroughs Continuous Improvement Commitment to Quality Structured Processes Learning Environment Quality of Research Summary Determinations After reviewing the ideas discussed above, the committee determined that certain features of each pillar characterize the essence of that pillar. These features are important to the development of characteristics and metrics in Chapter 4 and are summarized in Table 3-1. REFERENCES American Heritage. 1992. American Heritage Dictionary of the English Language.3rd Ed. Boston and New York: Houghton Mifflin.
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WORLD-CLASS RESEARCH AND DEVELOPMENT: Characteristics for an Army Research, Development, and Engineering Organization Bounds, Greg, Lyle Yorks, Mel Adams, and Gipsie Ranney. 1994. Beyond Total Quality Management. New York: McGraw-Hill. Brown, Warren and David Gobeli. 1992. Observations on the Measurements of R&D Productivity: A Case Study. IEEE Transactions on Engineering Management. 39 (4): 325–331. Business Plan. 1995. U.S. Army Soldier Systems Command Business Plan. FY96-01. Volume 2, Appendix F. September. Doucette, Edward, 1996. Mobility Capability Area Overview. U.S. Army Soldier Systems Command, Natick RD&E Center. February 27. Dimancescu, Dan. 1991. The Seamless Enterprise: Making Cross-Functional Management Work. New York: Harper Collins. Hamel, Gary and C. K. Prahalad. 1994. Competing for the Future. Boston: Harvard Business School Press. Hodgetts, Richard. 1993. Blueprints for Continuous Improvement. New York: American Management Association. Hodgetts, Richard. 1996.Implementing TQM in Small and Medium-Sized Organizations. New York: Amacom. Luthans, Fred. 1993. Meeting the New Paradigm Challenges through Total Quality Management . Management Quarterly. 34: 2–13. Luthans, Fred, Richard Hodgetts, and Sang Lee. 1994. New Paradigm Organizations: From Total Quality to Learning to World-Class . Organizational Dynamics. 22 (3): 5–19. Luthans, Fred, Michael Rubach, and Paul Marsnik. 1995. Going beyond Total Quality: The Characteristics, Techniques, and Measures of Learning Organizations. International Journal of Organizational Analysis. 3 (1): 24–44. Matheson, David, James Matheson, and Michael Menke. 1994. Making Excellent R&D Decisions. Research-Technology Management. 37 (6): 21–24. McArthur, Doug. 1994. Practice World-Class Technology. Datamation. 40 (18): 100. McGill, Michael, John Slocum, and David Lei. 1992. Management Practices in Learning Organizations. Organizational Dynamics. 21 (1): 15–17. Porter, Michael. 1985. Competitive Advantage. New York: Free Press. Ransley, Derek and Jay Rogers. 1994. A Consensus on Best R&D Practices. Research-Technology Management. 37 (2): 19–26. Senge, Peter. 1990. The Fifth Discipline. New York: Doubleday. Wheelen, Thomas and David Hunger. 1995. Strategic Management and Business Policy. 5th ed. Reading, Mass.: Addison-Wesley.
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