Matching R&D to Business Conditions

A perennial challenge for a Research & Development function is to maintain its autonomy by being relevant.

On one hand, if R&D efforts are exclusively focused on today’s technical problems, tomorrow’s technical innovations may be left to the competition. On the other hand, when R&D is overly focused on tomorrow’s breakthroughs, incremental improvements in product and process may never be realized.  Furthermore, organizational backlash can easily lead R&D to be perceived as “elite.”  So how do R&D leaders maintain the proper balance? How can the unpredictability of innovation be made to fit with the orderly management of business operations?

Theodore Levitt observed that “organizations evolve to do predictable work, and in so doing they create procedures and routines that also tend to stifle innovation.” He went on to say that R&D may systematically foster innovation and change, but mostly fixed procedures and set routines impede it.

Like many, Levitt believes that innovation must be done everywhere in the organization, at all levels.  While this may sound good, results can lead to organizational indigestion. Instead of relentlessly advocating innovation anywhere and everywhere in the organization, wiser R&D leaders seem to pick their battles more carefully and thoughtfully. One of the things they consider is the prevailing competitive conditions affecting their partners in Operations.

Before he retired as the Vice President of Innovation Management at Kimberly-Clark, Bill Wilson developed a relevancy test to help R&D leaders better understand how to maintain the right balance between supporting operations today and directing innovations for tomorrow.

The test starts by carefully considering the competitive conditions of the operation. Normally, business operations exist in one of four possible competitive climates, each with its own operational priorities: Growth, Consolidation, Expansion and Maturation. If these conditions are not carefully considered or are misunderstood, the innovation can be perceived as irrelevant, if it is perceived at all.  Wilson used a diagnostic tool similar to the diagram shown here to help match innovations in development to the conditions of each business operation.

Management needs different skills depending upon which competitive conditions exist for the business or product category.  For example, if a manager uses criteria appropriate to mature conditions when the business is experiencing rapid growth, he or she can kill the innovation right off the bat.  Innovation is developmental; it takes time, care and nurturing. Each set of competitive conditions has its own language, motivations and patterns of behavior. Therefore, R&D management needs to act and communicate with operational priorities in mind. This is especially true for those who seek to introduce innovation. Wilson said, “If I had had this approach thirty years earlier at Kimberly-Clark, I’d have done a lot of things differently and probably been a lot more successful.”

(Bill Wilson received the Chairman’s coveted Entrepreneurial Achievement Award shortly after his retirement from Kimberly-Clark in 1988 for such achievements as initiating the company’s non-woven business, and for his role in the development of many product and process innovations, including disposable diapers.)

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This article was originally published in Innovating Perspectives in May 1995. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 387-1270.