Rethinking the Role of Research

Leadership in marketplace innovation requires mastering 'radical incrementalism.' OVERVIEW: In today's competitive environment, large, mature, technology-based enterprises must restore the high levels of innovativeness that made them great in the first place. Repositioning the research function as part of the firm 's "engine of innovation " should be an important priority Central to that task in many industries is the capacity to identify, develop and exploit wholly new technologies that will give rise to new classes of customers, channels and uses. At the confluence of emergent markets and technologies, innovative success will require that research acquire a new set of organizational capabilities. Given the inherent unpredictability of the details and timing of future markets, radical incrementalism--the testing of radically new concepts in a series of practical market engagements based on a larger research vision and technology strategy--provides a key capability to explore the uncertain dynamics of demand. In technology-based enterprises, the management of innovation is a key business process. For these firms, competitive advantage is derived from a continuing stream of innovations, not only in new products and services, but also in the distribution and support of those products and services. The management of innovation, therefore, has become especially important to large, mature, technology-intensive companies-AT&T, Digital Equipment, IBM, Kodak, NEC, Philips, and Xerox, for example-as they face increasing competitive challenges on a global scale. As rapid change in technology alters markets, destabilizes competitive balances, and offers opportunities for competitive repositioning, these large enterprises must strengthen their capacity to create a continuing stream of productivity-enhancing innovations in products, services and work practices. It will require more than downsizing and restructuring to meet the challenge of global competition. These companies must seek to restore the high levels of innovativeness and competitiveness that made them great in the first place. For such firms, then, repositioning the research function as part of the firm's "engine of innovation" is an important priority. This task is complex because the "engine of innovation" must be capable of operating on two planes. Beyond the continuous enhancement of established products and services and constant reduction in their costs, that "engine" must also be capable of commercially exploiting wholly new technologies that will give rise to new classes of customers, channels and uses. Hence, these firms will need the capacity to compete effectively for new and emerging markets. In competition focused at the confluence of emergent markets and technologies, the need to cope with the dynamics of their interactions in the face of the consequent uncertainties requires a different set of organizational capabilities. The pursuit of these goals implies acceptance of a changed role for the traditional corporate research organization. In today's environment, research must see its role in the context of the whole corporation-its markets, its customers' needs, and its core competencies. The organization must be able to read and interpret technological and sociological forces of change in the context of the strategic needs and capabilities of the corporation. Furthermore, it must see its success in the context of how well the corporation succeeds within dynamic and highly competitive markets. It is time to move beyond long-standing debates about the value of basic vs. applied and long-term vs. short-term research-all characteristic of the old "linear" model of innovation. In our discussion, those old dichotomies are put aside in favor of a view of research, written with a little "r," as the structured acquisition of knowledge and support for learning across the total process of creating, making, selling, and supporting innovative and efficient products and services. …