Companies are frequently looking for growth, innovation and productivity gains to enhance their prospects over the longer term. Unfortunately, more 90% of strategy fails to some extent (Link to Blog Post). For business and technology leaders, making sense of new technologies and effectively and at speed is crucial. Creating well-aligned new product programmes that are rigorously underpinned makes the best use of a firm’s precious resources. The technology strategy is the key link between the firm’s commercial objectives and its new product pipeline. A solution has been developed to quickly and effectively develop or refresh the company technology strategy. A modular approach of decision-support methods and workshop facilitation combine to provide a scalable strategic thinking and planning toolbox.
We need to talk about Technology Strategy.
For established corporates through to technology start-ups, a pervasive set of questions nags in the minds of R&D managers;
- Why do we need to act – what’s driving change?
- What will create the most value in our innovations associated with technologies – where will we make money from?
- When do we need to act – what’s the timetable?
For CEOs and other business leaders, some of their concerns relate to where will innovative growth come from. More specifically,
“how will my company increase the success rate of new products and services and deal with radical challenges to the business model?”
For firms involved in technological innovation, significant gaps can exist between its commercial objectives for new market offerings and the enabling technologies.
The gap can be thought of as the distance between where they want to be with new solutions and their position now and in terms of their needed capabilities to act compared to what they have now.
First, the Bad News
So, let’s get the bad news out of the way.
It’s possible, indeed, probable that your strategy is weakly design or poorly executed.
Studies show that business strategy fails to realise its promise from Paul Leinwand’s et al 2015 article in Harvard Business Review. But Why?
In product innovation Bob Cooper (2009) showed that firms ranked in the higher levels of performance have better strategy processes, more regular routines and more aligned functions.
For developing effective plans for technology, we can describe three main problems;
- FIRST, technology is too often left to the technologists. Is it because top management is uncomfortable with technology, or hold a perception that it’s for lower management to do. It isn’t; technology speaks to the very future of the firm.
- SECOND, is there a feeling that strategy needs to be large and complex to pull the different aspects together – “no time for strategy, I’ve got a business to run!” in the words of the famous cartoon.
- And THIRD, we would say that many common approaches – the pass-me-down ways of managing technology used by generations of R&D managers often don’t provide sufficient rigour or the basis of good decision-making for investments in technologies.
Let’s consider a definition to get onto the same page. What do we mean by a technology strategy?
“The operational expression of a technology strategy is the set of projects that an organisation wants to implement. Determining a strategy is selecting the projects and the portfolio of projects.” Mayer (2008)
This means that a successful integrated technology strategy should ideally,
- Be proactively undertaken,
- There should be some deliberation, intent or conscious action,
- It’s a skill that can be learned, taught and developed,
- It should be alive; refreshed periodically,
- It directly leads to better innovation performance and results,
- As the world changes dynamically update the strategy.
You could boil it down to the following; essentially, technology strategy is about decision support technology investments. To be able to define at will the Why, What, How and When technologies are needed and the capabilities to deliver them. John Saiz (2016) puts it like this,
- Why do we need to respond or Change? Usually, the market or external response.
- What is the nature of our response? Where will we create Value in future?
- How do we advance the state of our knowledge? What investments do we make? What technologies do we do (develop) / buy / ally with?
How can innovation leaders respond?
What if, we could turn this situation around rapidly? To make the technology strategy, the R&D leaders’ secret weapon?
What if… we could deploy a set of agile, rapid and flexible strategic “tools” that could lift our performance?
Consider the workshop of a master craftsman.
The craftsman has over years built up a collection of favoured tools for each job. Tools are selected for the job at hand; some mainstays and others for specialist tasks. Basic jobs need essential tools and specials when unique effort is needed.
I’d like to introduce you to a first Tool; the strategic technology roadmap. It is used to map, over time, where value is created, why it is driving the firm and how it is enabled. It describes a desired future state, where we are now and what the gap looks like. By stitching these together, a rich, visual narrative is produced.
They say a picture speaks a thousand words; perhaps it was a roadmap they had in mind…
A roadmapping workshop should be tightly designed and facilitated. Getting the right people into the room is a core principle of our workshops. But even so, the amount of information can rapidly become overwhelming.
Let’s add just more two more tools; the linking grid and a portfolio view. Now we can correctly assess high potential ideas for value creation and understand what capabilities are needed to support what value creation opportunities exist and to which trends and drivers.
Let’s stop there and consider: This small toolbox of three tools can take you a long way.
But what about more radical or deeper exploration, if a division needs to refresh its technology strategy? What if you needed to build that walnut cabinet you’ve always been promising yourself?
The technology strategy toolbox also includes methods for very different tasks,
Exploration: Drivers and scenarios. Creative idea generation and intelligence on where trends are heading.
Decision-making/options: Do we make technology or buy via acquisition or collaboration? How do we weigh technology development risk?
Communication: Plans and messages to the wider organisation and stakeholders.
Let’s take TWO examples across the organisational length scale. This works at both ends.
At the lower end of the length scale; a speciality chemicals SME in called to develop a technology roadmap.
Using our fast-start one-day workshop-based processes over 8 weeks we developed a business strategy, followed by a strategic roadmap.
We worked with the board and the management team to deploy a series of business and technology strategy tools; Roadmapping, opportunity selection tools, linking grids.
The results are the board has been a much clearer picture of where and what to invest precious SME development resources in (and what to walk away from) thereby minimising the lost opportunity cost.
The results included double-digit uplift in jobs, and in good revenue growth.
But also the way in which the process engaged the wider organisation in the growth journey as much as the strategic plan itself.
The second is a $20bn multi-division global materials producer with operations in over 20 countries and with 50 000 employees.
They came to us with some well-worked-out business strategy results; where to play and how to play questions you might call them. But needed validation and to identify which technologies should it invest in for new high potential value opportunities.
We designed a workshop innovation process based on the technology strategy toolbox to design a set of 3-day workshops.
First thing is, we didn’t start in isolation: With a business strategy, we developed with the client a multi-level process to answer the key technology questions: Why, What, How, When?
In a complex organisation and world; we tested the strategy against scenarios that drive the world they operate within.
You’ll also appreciate why what and how can be asked a series of levels. For instances, Why can exist at the Climate-Change-will-affect-us level and at the same time a different Why at the market level and so on. This alludes to the hierarchical or nested nature of technology strategy.
Strategic roadmapping was used as a central tool to explore, create and communicate ideas about technology-led growth.
The results were a set of verified application areas with highly attractive opportunity and feasibility including radical or breakthrough focus. A set of technologies to make; a set to enter into collaborations with and a number to buy in.
A better place for strategy
When I was in a technology leadership position, this toolbox approach as most certainly not part of the routines. The organisational struggled to make judgements between technologies and applications areas which led to wasted effort and lower growth.
How valuable would it be for as an innovation manager to be able to reach for a set of tools, and rapidly and with far greater effectiveness reach conclusions about technology investments?
And the results are for R&D managers and VPs in technology-reliant businesses are,
- Faster, more effective and rigorous answers to What technology do we invest in.
- Knowing what capabilities to invest in with far greater certainty; what projects to place the precious resource on.
- Future-proofing, to some degree, on the strategic objectives of a firm with an uptick in ROI.
This presentation was first given at ChemUK 2019, UK in May 2019. Please contact me to discuss ways to bring greater effectiveness to your innovation processes.
Dasgupta, M., Gupta, R., Sahay A. (2011). Linking Technological Innovation, Technology Strategy and Organizational Factors: A review. Global Business Review 12 (2) 257 – 277
Cooper, R. G., & Edgett, S. J. (2010). Developing a product innovation and technology strategy for your business. Research-Technology Management, 53(3), 33-40.
Ilevbare, I. (2016). Business-aligned technology strategy – why, what and how? Report for Strategic Technology & Innovation Management Programme 2016. Centre for Technology Management, Institute for Manufacturing, Department of Engineering, University of Cambridge.
Kerr, C., Phaal, R., Thams, K. (2016). Customising and deploying roadmapping in an organisational setting: The LEGO Group experience, R&D Management Conference July 2016, Cambridge, UK
Leinwand P, Mainardi C, Kleiner A (2015), Only 8% of Leaders and Good at Both Strategy and Execution, HBR Blog
Saiz J (2016), Defining the Technology Strategy: Connecting NASA’s Culture of Innovation to your Organization, LinkedIn