Fourth Generation R&D

By William L. Miller and Langdon Morris, John Wiley & Sons, New York, 1999. © 2002.

In the new global economy of the Knowledge Age, customers have more and more choice about the products and services that they buy. To remain competitive in the global marketplace, companies must therefore offer unique value. The development of successful new products and services is critical to survival, and it is universally accepted that innovation in products and services is critical to success in today's highly competitive world markets. However, despite continuing emphasis on innovation, most large corporations have a poor record as innovators : 50% to 80% of all new products fail. It is apparent today that the high failure rate is a result of a mistaken focus. Whereas most R&D groups focus on the scientific assessment of new products, it is the customer's point of view that matters most. Therefore, a new generation of R&D management is emerging in which the R&D group manages the process by which the true needs of the customer are determined and then satisfied.

This is known as 4th generation R&D.

A few select companies have become market leaders through their mastery of the 4th generation R&D process, and they have redefined the role of R&D to support and drive innovation throughout the entire organization. Managing R&D to Drive Innovation describes how R&D organizations must overcome obsolete and counterproductive ideas and practices to shift the focus of R&D to the customer and the customer's needs. This requires new approaches in R&D management, strategy development, market research, finance, decision making, organization design, and knowledge management.
The transformation of R&D is augmented by original case studies describing key practices in these leading organizations :

• NASA - The Story of Apollo 13
• Nike - The Story of Nike Town
• Hewlett-Packard - The Turnaround of the Test and Measurement Organization
• Intel - Moore's 1st and 2nd Laws
• Xerox - The Development of the Docutech
• The Ford Tri-Motor Aircraft

"Fourth Generation R&D" is for the many senior executives who are concerned about innovation, and for executives in R&D, Product Design, Product Development, Strategy and Planning.

Contents

Introduction : The Innovation Imperative
R&D must support the innovation process throughout the organization to enable a firm to compete in a global economy characterized by accelerating change.

1. The Theory of Learning and the Sciences of Knowledge Innovation is based on the process of learning and the creation of new knowledge, and it is vital to master these critical processes in order to innovate effectively.
   
   
2. Innovation in Context : Strategic Architecture and Organizational Capability A global context for innovation is necessary before allocating resources to specific projects.
   
   
3. Organizational Architecture Innovation requires an approach to organization that balances the need to manage the day to day work with the need to prepare for the future by creating new products and services.
   
   
4. Innovation is Market Development Innovation must be pursued jointly with customers participating in each step of the project to ensure that their true needs are addressed.
   
   
5. The Innovation Cycle : Products, Services, Processes, and Management It is necessary to innovate in organization and management in order for innovations in products, services, and processes to have enduring influence.
   
   
6. The Architecture of Decision Making The methods of decision making and finance used throughout the organization must be changed in order to support a systematic innovation process.