Innovation, Research and Development Management
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Content
Foreword ix
Acknowledgments xi
General Introduction xiii
Chapter 1. R&D and New Competitive Challenges: Between Intensive Innovation Strategy and Internationalization 1
1.1. Strategy and R&D 1
1.1.1. R&D's place in business strategies 2
1.1.2. Different generations of R&D 4
1.2. Environmental factors influencing business strategies in R&D and their consequences 9
1.2.1. The major role of innovation in competition strategies 9
1.2.2. The emergence of the consumer in R&D 11
1.2.3. The effects of market globalization 15
1.3. R&D strategies tested overseas: the example of China 21
1.3.1. Western companies' choice to locate their R&D in China 21
1.4. Conclusion 26
Chapter 2. Work in R&D and its Transformations 29
2.1. Specifics of R&D work and its heterogeneity 29
2.1.1. Non-routine and knowledge intensive work 30
2.1.2. The work in R&D: between interactions and engagements with the surrounding environment 35
2.1.3. A job characterized by a certain degree of autonomy and occupational regulations38
2.2. The main transformations of R&D work since 1990 43
2.2.1. The advent of project management and of the concurrent engineering model 43
2.2.2. A job which is more interactive and more dependent on the downstream 48
2.2.3. Managerialization, bureaucratization and remoteness of technical work 52
2.3. Current tensions and open questions as to the future of work in R&D 56
2.3.1. Increasing pressure and strong focus in the short term: how sustainable is this in individual and collective terms? 56
2.3.2. Relocation, internationalization, outsourcing and open innovation: what is the future of R&D work? 61
2.3.3. The digital revolution: what is the impact on work in R&D? 64
2.4. Conclusion 67
Chapter 3. Rationalization and Creativity: R&D under Pressure 69
3.1. Permanent rationalizations and reduction of available resources in R&D 70
3.1.1. The rationalization concept 70
3.1.2. R&D struggling with permanent rationalization 71
3.1.3. Rationalization as a slack reduction strategy 72
3.2. Creativity: between individual attribute and social process 77
3.2.1. Individual creativity 78
3.2.2. Creativity as an idea production process 81
3.2.3. Creativity as a social process 83
3.3. Ingredients and negative effects of slack reductions on creativity 84
3.3.1. Slack reduction components 85
3.3.2. Human slack reduction effects 85
3.3.3. "Financial slack" reduction effects 91
3.3.4. Temporal slack reduction effects 92
3.3.5. Spatial slack reduction effects 94
3.4. Mechanisms linking slack reduction and creativity 98
3.4.1. Focus of attention 98
3.4.2. Ability to "travel through time" 99
3.4.3. Support provided by the leader 100
3.5. Conclusion 101
Chapter 4. Managing R&D Professionals: HRM Practices and Current Challenges 103
4.1. HRM and R&D: complex relationships 103
4.1.1. R&D: a world that has long remained foreign to HRM regulations 104
4.1.2. Recurrent tension between standardization and differentiation 108
4.1.3. Project organization: a necessary source of adaptation of HRM in R&D 110
4.2. HRM development in R&D today 111
4.2.1. Strategic HR planning 111
4.2.2. Recruitment and integration 113
4.2.3. Assignments and mobility 118
4.2.4. Individual assessment 121
4.2.5. Remuneration 124
4.2.6. Careers 127
4.2.7. Competence management and training 131
4.3. The new challenges of HRM in R&D 133
4.3.1. Moving beyond an instrumental approach and adapting to the diversity of contexts 134
4.3.2. Renewing (or reinventing) HRM in open innovation models 135
4.3.3. Going beyond individualized HRM by integrating the collective dimension 137
4.4. Conclusion 138
Chapter 5. Collective Expertise: Forms and Methods of Management 139
5.1. Collective expertise in R&D 140
5.1.1. The dual facet of expertise: individual attribute and collective process 140
5.1.2. Collective expertise and its current status 141
5.2. Two forms of structuring: "horizontal" and "vertical" 142
5.2.1. Horizontal structuring: interdisciplinary communities of expertise 142
5.2.2. Vertical structuring: monodisciplinary communities of expertise
5.3. Conclusion 157
Chapter 6. Performance Management in R&D 159
6.1. Performance in R&D 159
6.1.1. A hard to define concept 159
6.1.2. Management difficulties specific to R&D 162
6.1.3. Performance challenges 163
6.1.4. The delicate issue of measure 164
6.2. Budgetary control of R&D departments 169
6.3. Innovation project management control 171
6.3.1. Economic assessment of projects: the two approaches 171
6.3.2. Project management methods and tools 175
6.4. Conclusion 181
Bibliography 183
Index 197
1
R&D and New Competitive Challenges: Between Intensive Innovation Strategy and Internationalization
R&D activity has always occupied a central place in the strategy of large enterprises and in the competitive performance of states. Recently, with a significant change in the competitive environment of companies (such as, for example, competition with new emerging countries, intensive innovation policies, changes in customers' expectations and transformation of business models) innovation and R&D have become essential for both company and national competitiveness.
In this chapter, we first present the relationship between R&D and company strategy and the different generations of R&D and their characteristics, which are currently possible to identify over a long period of time. We then identify and describe the main factors that influence R&D strategy in companies, emphasizing their impacts on the construction of new R&D models. Finally, it provides a practical illustration of the latest developments in the R&D sphere through the presentation of policies that Western companies have implemented in their Chinese subsidiaries.
1.1. Strategy and R&D
The place of R&D in the company is closely linked to technological innovation, particularly in its strategy. It is important to note that innovation is not simply an invention, but it is the result of a design process that a market has endorsed. Ultimately, it is about successfully bringing to market profitable requests (products or services), for which the company undertakes a reshuffle of knowledge and existing skills in order to offer new products or services. The place of R&D also depends on the sector, competitive strategies and the nature of the company's markets.
1.1.1. R&D's place in business strategies
R&D plays a special role both in companies' strategies and in the international arena. Research and development projects not only provide a competitive edge for businesses, but are also vital for the economic competitiveness of countries in their struggles for power and international influence.
1.1.1.1. R&D responsible for its very unique place in company strategy
The place of R&D in company strategy depends, first, on the business sector, the nature of the markets and the company's competitive positioning and, second, on its degree of globalization. Therefore, the high-technology companies belonging to the "innovation-driven" sectors (as well as pharmacy, aeronautics, energy, electronic, etc.) [GIR 96] make huge investments in R&D, whereas the businesses in mass distribution invest little or no funds in R&D. The nature of the markets also affects the position of R&D in company strategy. For consumer products manufacturers, the R&D strategy will consist of manufacturing better and cheaper than the competitors, by offering either innovative products that better meet consumer expectations or products with new and highly attractive features (e.g. the new digital applications via smartphones or social networks) or by adding a service to the product (such as integrated remote maintenance with the purchase of a printer). For these companies, R&D activity has long been closely linked to decision-making. When dealing with the B2B sector, that is, those geared toward the sale of products to industry, a large part of R&D is performed close to industrial entities, where the industry is located [LEN 02], in order to respond to the needs of cost reduction and to support innovation efforts. This is done by providing "solutions", on the one hand, and by creating innovative concepts capable of introducing breakthroughs in industrial performance on the other. This is the case, for example, with R&D centers of the cement industry being located near production plants.
The strategy of localizing a company's R&D activity close to its customers is illustrated by the example of Usinor, now known as ArcelorMittal.
Box 1.1. Design differentiation approach in the R&D of Usinor (source: Lenfle and Midler [LEN 12])
Usinor (ArcelorMittal, from 2006) is a company producing raw material (steel), involved in the upstream of industrial clusters, particularly the automobile industry. The innovation strategy, which operates in the automotive market, is also reflected within this upstream company, which is forced to find innovative technical solutions, which are at odds with its dominant position on the market.
Here, the proximity, not only geographical but also organizational and institutional, between the R&D of the upstream company and car manufacturers is a prerequisite to its success. Organizational proximity involves putting in place coordination and cooperation arrangements between R&D players of the iron and steel group and those of the car manufacturers such as shared research projects allowing the exchange of information and knowledge. In contrast, institutional proximity involves creation of common areas of co-exploration for interactive learning required for innovation.
Besides the traditional strategic aspects like the domination by the costs and benefits of global "solutions" for the client, this company's R&D strategy has always been about developing and proposing innovative product proposal (IPP) projects in the field of hydroforming, in which:
- - the result of the design project is not linked to a specific object designed directly for the customer;
- - the project is likely to shake up the mainstream R&D representation of the company and its customer;
- - uncertainty about the customer accepting the innovation is the norm.
These innovative product proposal projects lead to a situation of new cooperation with customers referred to as "co-exploration", in which the two partners explore together, without certainty as to outcome, the concepts likely or unlikely to lead to the creation of added value.
The place of R&D in company strategy also depends on the globalization of the business activity. In order to compete, some companies had no other choice but to globalize. The analysis of globalization provided by the economist Pierre-Noel Giraud [GIR 12] serves as essential reading that helps us understand its effects on the breakdown of the value chain and, in particular, on R&D's place in globalized enterprises. The Giraud model is based on the division of the world economy into territories separated by borders. It is based on a distinction between "nomadic firms" and "sedentary firms" and on a differentiation between the jobs of a territory that produce goods and services subject to international competition and those producing goods and services protected from this international competition.
Within each territory, protected by borders, people, capital and goods circulate freely, but not always between territories. This concerns human resources in particular. The nomad firms produce and circulate economic objects between territories. They make territories compete in their comparative advantages to make profit, and their decisions on FDI (foreign direct investment) destabilize or stimulate the territory's economic activities. This is particularly the case with R&D investments. The sedentary enterprises only produce or trade at the national level. Employees competing for the nomadic firms will also be described as nomads. They only compete on a territory if they are competitive, otherwise they are transferred elsewhere. Sedentary or protected employees only compete with one another for the production of goods and services for local use. Thus, the global firm "locates sedentary activities where they must be", and the nomadic activities "in the territories that offer the best conditions": low labor costs with high labor intensity and availability of highly qualified scientific staff for research laboratories.
By repeating Giraud's paradigm, it is clear that R&D's position is of crucial importance for companies from overseas or nomads, that is, those exposed to global competition, that are on the front line of innovation and product renewal; it is less crucial for "domestic" companies or those on the protected market like mass distribution.
1.1.2. Different generations of R&D
The governance of R&D is strongly impacted by the level of importance that the company attributes to innovation. Other factors are included in the connection between the development and creation of scientific and technical knowledge and value proposition for customers.
Management literature has highlighted five generations of R&D management [ROT 94], which are described as follows.
The technology push model was the first dominant generation during most of the 20th Century; it is very visible in the policies of R&D enterprises as well as in those of states through large research organizations, such as the CNRS and the CEA in France or NASA in the United States. According to this model, innovation is primarily dependent on the industrial and scientific policies of companies or states according to a top-down view (Schumpeter). Scientific and technological progress guides innovation. The main participants are the researchers and engineers in R&D departments of large companies or scientific organizations. This does not mean it is a...
