28th August 2014

R&D Efficiency

Anticipating customer requirements – often implicit – and identifying technology trends early in the product or technology development cycle in order to have a sustained revenue growth is crucial for any high technology industry. It is more so in the semiconductor industry which has its own economic cycles (typically 4 years of crests and troughs), high costs and technological complexities. Throw in the uncertain macroeconomic conditions coupled with increasingly dynamic and uncertainty in gauging market needs, shortening market window availability and the spiralling costs of trying to stay on the leading edge. And what does one have – a highly challenged R&D team with limited resources and the pressure to stay perched, if not ahead, on the curve.
And this is where R&D Efficiency gets all the more critical.
R&D Efficiency is the Return on the R&D investment, a tangible measure of what an entity gets for the number of R&D dollars invested.

Traditionally, the R&D team’s objectives are set along with inputs from the Biz and Technology Strategy group, Marketing & Sales group and sometimes the Field Application groups (usually a highly under leveraged asset) – and being aligned with the company’s top level vision and objective and with the available resources. Once handed down with the R&D mandate, the various R&D teams get onto what they have been trained to do best – R&D. And these mostly get done in silos with not much of active bridges of communication, let alone brain storming, between each other.

In my last post, Mining the seams, I mentioned about facilitating R&D folks to be market savvy – not to turn them into marketers but to facilitate in aligning R&D investments with market needs and achieve R&D efficiency. Having recognized that an issue exists is the first step. Making the necessary steps for the transformation follows. And this is especially catalyzed when all indicators point that maintaining the status-quo will be more dangerous than venturing into unknown.

Quite often even the well intentioned initiatives get watered down during the implementation or transformation phase. A new design flow, a more efficient way of mapping the customer requirements into your product/technology roadmap, moving into adjacencies, hedging R&D bets etc. are often “lost in translation”.

I revisited an old HBR article recently which throws light on how one can lead a sustainable transformation in an organization. It is titled, “Leading Change: why transformation fails” by John P. Kotter.
It lists 8 steps in transforming your organization:
• Establishing a sense of urgency
• Forming a powerful guiding coalition
• Creating a vision
• Communicating a vision
• Empowering others to act on the vision
• Planning for and creating short-term wins
• Consolidating improvements and producing still more change
• Institutionalizing new approaches

It is a very interesting and informative piece and would serve us well to keep in mind while transforming to increase our entity’s R&D efficiency.

posted in Semiconductor, Management & Strategy, Technical Marketing | 0 Comments

22nd August 2014

Mining the seams

This was the phrase that actually caught my attention in an informative article, “Decision making Marketing” in the HBR July-Aug ‘14 issue.

The main problem in decision making referred to in the article is the communication falling through across the different silos in an organization thus impeding effective decision making. Challenges include divergent assumptions, lack of alignment and shared commitment across the organization structures - amongst others. Reorganizing the structure/reporting doesn’t often address this completely. Sometimes it just creates more or different silos and the challenge remains unaddressed. Mining the seams helps address this by working closely across functions, avoiding organization bottlenecks and getting work done quicker and more efficiently than in the past. While the article mainly talks about the challenges involved in decision making for marketers when they need to communicate across domains of product development, sales, finance etc., the same is true for any other function too.

Here are my thoughts mapping this to the various spaces I worked in …Am keeping mining the seams as central (rather than decision making) and I may be taking another interpretation and possibly an extension of the main theme from the article.

An IC development program requires close interaction between various functions – Marketing, Design, Manufacture, Planning, Packaging, Testing, IP, Finance, Legal etc. Islands of expertise in each can be found aplenty. However what are rare and very much needed are people who can effectively communicate across these seams for decisions made in various phases of the chip development affect others. A design decision taken in isolation from say packaging can result in a major chip gaffe.

Another example is the R&D functions in an organization. Going by Donald Stoke’s model, one can lean towards pure research (Bohr) or gravitate more towards the applications part (Edison) or find a central niche (Pasteur). For those in the latter two especially, we see a major need to mine the seams. R&D professionals need to align their research to the market requirements and move towards what can be termed – Technology substitution to Technology Epiphany. These means getting out of their labs and well……..mine the seams. Aligning market research to your innovation requirements, mapping the customer needs (explicit or implicit, existing or potential) to your R&D or technology road map needs effective communication across functions…mine the seams.

I regularly conduct training workshops for facilitating R&D folks to be market savvy – not to turn them into marketers but to facilitate in aligning R&D investments with market needs and achieve R&D efficiency. Absence of communication to communication falling through the seams is issues frequently observed.

The first step is to recognize the issue exists – it is surprising how many of us are in a state of denial. Strategies and tools are available to address the challenge.

One of the initiatives taken is to have cross functional teams to facilitate the communication flow. However in most places, these work on “passing the baton” theme rather than “playing the new new product development game” a concept proposed by Hirotaka Takeuchi and Ikurjiro Nonaka – “Stop running the relay race and take up rugby” – the ball gets passed back and forth within the team as it moves as a unit up the field.
Temporary teams set up for a project and disbanded on project completion is another way. The teams here owe their commitment to the project rather than solely to the departments they belong to. Requires tweaking the KPI and other performance markers but such dynamic structures have shown good results.

It pays to mine the seams!

posted in Semiconductor, Management & Strategy | 0 Comments

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