Bringing innovation from an idea to business takes skilled management and complementarity

Curious R&D teams often speak a bit different language than their colleagues in production and sales. These two groups of professionals are also motivated by different factors – and for a good reason. While the task of production and sales is to utilize well-known opportunities and solve known problems, R&D people are professionals in identifying unknown opportunities and defining poorly known problems. This is illustrated in Scheme 1. Said with a pinch of salt, research people get bored as soon as something is well known while their colleagues in production and sales find anything poorly known appalling. A hard fact is, though, that smooth transfer of an R&D project from the former to the latter is often a challenge to the management. A gap between these two groups can kill even a very potent innovation project. In innovation, market research is to to sales what product development is to production. While the need of good communication and close cooperation between these two lines is usually well recognized, the importance of closing the gap discussed in Scheme 1 often gets much less attention. KEY TO SUCCESS To overcome both of the abovementioned managerial challenges, it is important that representatives of production and sales are involved in an innovation project already in its early stage and that R&D people remain in the project team all the way until commercialization. Not only does such practice increase the success rate of individual innovation projects, but it is also excellent training for all participants. Training like this also promotes multidisciplinary skills and talents, thus increasing the company’s intellectual capital. A shared sense of complementarity...

Whether it’s innovation or an investment project, uncertainty and exposure don’t mix well.

As experienced project managers know so well, the key to bringing an industrial investment project successfully to its completion is that the level of uncertainty is brought to a low level before major capital expenditure. The more capital is invested in a project, the larger is the exposure to potential losses, e.g., in the case of delays or failures. This is illustrated in Scheme 1.   Of course, as managers of business operations know all too well, uncertainty in business is never quite at zero, and some risk is always present. Nevertheless, a smoothly operating industrial complex shall hold only a tiny fraction of the uncertainty that an early stage R&D project can happily host.     To be innovative, a company must manage development projects from their embryonic stage of high uncertainty to their commercial stage of high exposure.  Normally, however, such companies don’t have all the necessary expertise and capabilities within it’s own organization, but they use the services of selected partners, instead.   Curiosity for ideas and tolerance of their initial uncertainty is important to innovation, but even more important is the ability of bringing this high initial uncertainty down fast, cost efficiently and in an organized manner. Inability of doing this is the usual cause of failed innovation projects. Quoting Rainer Häggblom, Chairman in Vision Hunters Ltd., formed Chairman and CEO of Jaakko Pöyry Consulting Ltd. and a good friend of mine, “Innovation without commercialization is mere hallucination.”   SciTech-Service has a long history of serving its customers in bringing down uncertainty at all stages of innovation and investment projects (shown along the x-axis of...