In my last post, I introduced the concept of the Five Keys to Innovation Success. In this post I will discuss the first of the five; Access to advanced technology.
In order to have a balanced new product development portfolio it is necessary to have the following types of new products; 1) incremental product improvements (tweaks), 2) product line extensions, 3) products that are new to your industry, and 4) breakthrough new products. In order to develop differentiated new products, you must have the ability to access new potentially game-changing technology. Organizations can acquire new technologies in a number of ways. The first approach is to use internal research capabilities. This is typical in large companies with budgets to fund a long-term research group. It is critical that the product development teams guide the research projects to ensure they develop solutions to customer unmet needs. This type of approach is typically called applied research and develops new technology to solve identified problems in a new and unique way. I call this “customer pull” applied research as opposed to “technology push” (if we build it they will buy it). Your research investment will have much larger return on investment using the customer pull approach. Sounds good, but what if you don’t have a dedicated research group? One approach is to dedicate some of your product development resources with the right capability to do longer-term applied research. This sounds like a good idea, but in reality it is hard to execute, since the tendency is for these resources to be pulled into the short-term product development activities. I have seen this happen in multiple organizations. So in order to have an effective pipeline of new technology, the optimal structure is to have an applied research organization that is separate from the product development group, but has very close collaboration with the marketing, product development and engineering teams.
What happens if you don’t have an internal research organization? Alternate sources of technology are major research universities. Here you have multiple options. The most common is to fund a specific applied research project. Remember, that the work is completed by students who need to write a Masters or Ph.D thesis and publish papers, so careful selection of the project is necessary so both the university and the sponsor are successful. In my last three companies, we had very active programs with universities and they led to some great new technology that we incorporated into new products. One thing to remember. Technology from a university research project will need more work from either your applied research group or the product development teams to tailor it to your company’s new product. Resources need to be assigned to facilitate the technology transfer and complete the additional development work to effectively utilize the new technology in your new product.
Another avenue to access advanced technology is to acquire a license. Licenses can be obtained from universities looking to commercialize technology developed from their research programs or companies that have patents or technology that they are willing to license. IBM, Honeywell, Boeing, and many others have large patent portfolios and they have active groups that are willing to work with you on licensing opportunities.
The third route is to purchase a technology or company. A small company may have an innovative new technology or a solid patent portfolio and an acquisition may be another way to “bolt on” some new products into your portfolio. Be careful here since integration is a challenging endeavor, but if done well can be a good way to add new technology to your business.
Remember, having access to advanced technology is critical to sustain your innovation engine. We talked about acquiring advanced technology either from internal research groups, licensing, or acquisition. All are viable and used frequently. What is your approach to getting access to your advanced technology?
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