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Improved Information Processes

Improved communications and sharing of vital business information among all parties involved in the commercialization process appears to be the single most important change. Many books have been written on the subject.1 According to most of these books, the "old" R&D department functioned independently within a company or business unit, largely deciding for itself which new products and processes the company or unit needed. Customers were involved only when prototype products were available, and manufacturing specialists then were expected to figure out how to make the product at a price and level of quality acceptable to customers. This portrayal appealed to readers not really familiar with the complex world of R&D within a company. For those in the real world, it often was viewed as wrong and too simplistic.

By the early to mid-1980s, and in many cases long before, the business and R&D leaders of most companies realized that something was wrong with their internal relationships. R&D was viewed as isolated, alarmingly independent, and very costly. It took some time, but events in world markets forced a rethinking of the role of R&D organizations within business structures. These events included a continuing loss of market share to foreign competition, recognition of poor product quality, excessively high prices, and slowness to respond to customer needs. Many internal and external surveys and studies clearly demonstrated erosion of profitability, poor use of capital, decreasing innovativeness, and many more indicators of noncompetitive business performance.

Once business and R&D managers finally acknowledged a mutual problem in understanding each other, they quickly recognized that R&D departments were not really in the mainstream of all informational input critical to a business. Many steps were taken to change this situation. All have the same overriding objective: to ensure that the R&D organization is fully integrated into the business "team" and feels intense responsibility for business success.

Today's successful businesses are run as teams. When planning technology strategies, these teams involve all the important functions (marketing, manufacturing, sales, finance, and R&D). Clearly, customers are not involved in all proprietary planning, but customer views are sought early in the technology planning stage to help business and R&D leaders decide whether to proceed in certain new directions. This input helps the business teams understand the customers' needs. The more trust that can be generated between customers and business planning teams, the better the overall result.

The involvement of R&D in business planning must be at all levels. It is not sufficient for just the management to be privy to business plans. Furthermore,


See, for example, Philip A. Roussel et al., Third Generation R&D, Harvard Business School Press, 1991, and Michael L. Dertouzos et al., Made In America, M.I.T. Press, 1989.

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