A couple of weeks ago I got an email from a person who’d attended one of our workshops many years ago on how to build innovation management systems with staying power. He had moved from his former company about two years back to assume the role of Vice President of R&D for a much smaller specialty chemicals company. He had a group of about 40 people, and had recently been given the directive to double the size of his group and add a second location. He wanted to talk through how to design the R&D organization now that he had this opportunity.
It was such fun to help him design an organization from the ground up. He was concerned about how to allocate the expertise across the two locations, and how to ensure there was a critical mass of expertise across specific technical areas. He was concerned about how projects would be managed and how the relationships with the Business units would be handled given the additional staff. But the part of the conversation that was the most fun was how, now that his group was growing, he could build in some expertise for longer term research. He knew that, even with the added talent, he would not have enough to span all of the technical areas they’d need to invent their breakthroughs for the future.
Ultimately he decided to incorporate technology scouts who would scan universities, start-ups, and other external sources of discoveries and inventions, and help develop partnerships between them and the R&D group to leverage that technology in ways that suited the company’s future needs. His current mandate is to serve the needs of the company’s business units, but he’s preparing for the future. When the time comes, he’ll be ready to start to build an incubation capability.
I came away with two thoughts: First, R&D isn’t going away, as so many say it is. Discovery doesn’t always happen inside the company’s boundaries, as we know. The open innovation model can work. While large central R&D labs are under threat and have been for many years, smaller and medium sized firms are getting in the game more and more. Scouting is important.
Second, organizational design for R&D affords the opportunity to set up the company’s potential to manage for the short term and the long term at the outset. It’s not the whole story, to be sure, but getting Discovery right is certainly a start.