- Email: [email protected]
Adopting innovational technology in industry
87
Engineering Costsand Production Economics, 7 ( 1982) 87-93
Elsevier Scientific Publishing Company, Amsterdam
Printed in The Netherlands
INfSINNOVAllONAL TECHNOLOGYIN IN John M. Amos Center for Applied Engineering Management, School of Engineering, University of Missouri-Rolla, Rolla, MO (U.S.A.)
Abstract Adopting innovational technology is a complex and difficult problem for the engineer manager, especially in small organizations. Because the engineer manager is in the midst of these projects, he has difficulty in
looking at the process objectively. To o;‘ercome these problems a systems approach provides the engineer manager an effective aud usefir method in coping with the adoption process.
INTRODUCTION
same: too little too late! Many engineer managers believe they are not responsible nor need to be concerned with the effect and intluence of innovational techno their managerial practices. Yet, there is a need to be concerned, as top management in most firms holds the engineer manager responsible. This paper will concentrate on the management phase of adopting innovational technology*
Adopting innovational technology is essentially a transformation process where by potential innovations are identified and evaluated to determine if they are profitable for the firm to manufacture and market. The engineer manager is consistently involved in adopting innovational technology, but directs little attention to the way it is managed. Yet, industry is utilizing innovational technology at a tremendous rate which affects the individual firm in many ways. Because of the lack of attention to innovational technology by the engineer manager, innovations are often duplicated, which is a tragic waste of time, money and effort; and, secondly, outside competition may have inventions and discoveries on the market before the organization is able to implement its own. When this happens, the engineer manager may place the blame on personnel problems, outdated policies, or the wrong decision; but the results are always the 0167-188X/82/0000-0000/$02.75
INNOVATIONAL
TECHNOLOGY
Innovational technology has always been adopted, but in the past most projects were unplanned, and firms were able to survive rather well without constant concern with this phase of engineering management. The significant reasons why innovational technology is important to the engineer manager are many. Principal ones are that (1) present products become obsolete at an ever increasing rate, (2) there is increased competition, especially in markets with international
0 1982 Elsevier Scientific Publishinpl ComDanv
competition, (3) +rns have more knowledgeable and progressive customers, (4) there is ir,ti:reased interest by firms sparked by successful innovational technology, and (5) there has been a rapid development of technology transfer systems. With this increased pressure, only 2 out of 100 initial new ideas eventually become successful new products. With this low ratio, firms must improve their adoption process resulting in considerable of innovations, improvements in the firms’ R & D productivity. Rut the engineer manager must understand and manage the adoptive process. A number of studies* have indirectly focused on the success of innovational tech~ology by firms. These studies found that bet ween two-thirds and three-fourths of all successful adoptions were stimulated from some market “need” while others are stimulated from new technology. Thus, decisio:ls to adopt innovational technology are stimulated by two main sources: new technology and product market needs. These studies she w tha.t d.ecision-making information for innovational technology adoptions from the present market-oriented product line are of greater importance to the engineer manager than those due to technological needs. This distinction also holds for sources of information derived from Gent needs, and its regularity is of great value for decisions in the adoption of innovational technology. Additionally, it was found that innovational technology adoptions are not a function of the individual innovator’s characteristics, for organizations with laboratories have no significan? advantage in the level of successful innovatier~:~l technology adoptions. Even the size of thf~ organization does not seem to guarantee success. +A summary of various studies are included in “Information Styles and Technological Innovation”, one Engineering Marqement , Goldhat, Feb. 1976, pages 5 i -62.
Successful innovational technology adoptions occur when the work is continuous and cumulative over a period of time. Channels of information important to the engineer manager are either informal or formal. Informal channels in most situations have a greater value to the engineer manager. .When available on a regular basis, they are the most effective source. The informality of this source makes it highly unpredictable for the engineer manager as it is initiated elsewhr:;e with many barriers, but it is important information in the adoption of innovational technology. With information sources predominately internal and transmitted mostly through informal channels, technical contacts inside and outside the firm are especially important. However, equally important is the reliance upon the engineer manager’s knowledge, experience and creative objectives concerning which items should be included for the adoptive process. In adopting innovational technology many questions arise: What are the best relationships within the organization? How can the adoptive process best be managed? What accounts for the preponderance of innovational technology adoptions? Should management move completely to market-oriented programs?
PROBLEMS IN MANAGING INNOVATIONAL., TECHNOLOGY ADOPTIONS
Even though the major initial stimulus for adopting innovational technology is from market-oriented product needs, the engineer manager must still consider the initial stimulus from new technological sources which cannot be ignored as they may offer new opportunities for the firm and provide the stimulus for follow-on innovational tech-
nology adoption. At times, success comes from entirely new innovational technology,
89
not from traditional approaches. For example, polymer technology, rather than agricultural technology, transformed the rubber and textile industries. Similarly, solid state physics is revolutionizing electronics, which is, in turn, revolutionizing the aerospace industry. Therefore, the engineer manager must continually support projects outside the constraints of the firm’s existing manufacturing marketing and abilities. Innovational technology represents a complex interaction between adoption, the marketplace needs for new technology, and the engineer manager’s skills and techniques to manage it. The engineer manager must realize that the process of adopting innovational technology is important and that it must be managed. Particularly, he must deal with it with greater perception and must develop common policies for adopting innovational technology. Each example of innovational technology imposes unique requirements and must be managed individually. This requires the engineer manager to possess technical and marketing information for judging proposals and making decisions. The engineer manager must assume an ethos of risk taking in adopting any innovational technology, for the risk of failure exists. The engineer manager must have a high order of coordination among different innovational technology adoptions. This is necessary to facilitate continuous evaluation, The engineer manager rarely develops the adoption process to the extent necessary to equalize it with the commitment which he develops for marketing and manufacturing. Because of the constant pressure of urgent operational problerns, there is a special need for the engineer manager to develop a strategy for innovational adoption. In the adoption process selectivity is the key. The engineer manager must reduce the time required to adopt innovational technology, select one and then place i”. on the market.
The recognition and exploitation of innovational technology adoptions often takes more time than normally required to make other engineering management decisions. The engineer manager must speed up this process. People involved in the adoption process prefer to work in a loose, unstructured environment without close supervision by the engineer manager; but he must motivate them in order to produce consistent results. The engineer manager must be able to reject innovational technology adoptions even after some commitments. He must be selective, but he must encourage the adoption of new innovations. Therefore, the engineer manager must devote time and work to his group on a regular basis so that successful decisions are made together. The engineer’manager must develop an attitude of acceptance and desire for innovational technology among his people. He must insure that his superior recognizes the potential for adopting successful innovational technology. The capital structure affects the length of time the firm can wait for adopting innovaSmall companies with tional technology. limited capital must consider short-term adoptions, Even the firm’s source of raw materials influences the direction of innovatior al Ldoption. An unstable source, such as some energy resources, requires agressive technology adoptions to insure adequate supplies. A SYSTEMS APPROACH TO ADOPTING INNOVATIONAL TECHNOLOGY
The engineer manager faces many problems in managing the adoption of innovational technology in a manner consistent with the firm’s established goals. As with any aspect of engineering management, adopting innovstional technology must begin with establishing an approach or system to achieve the organizational goals. However, instead of clear direction, in most organizations there is great
-
-
6urlIodans
-
6urlelado lutioTaA.ap
T
paaesrls3
uo~afiptne aso3
1uma6euew
------I au!)aa
Bu~u!era
lauuoslad
auawrnba
I
I
91 confusion as to what, why and how innovational technology is to be accomplished. A systems approach helps the engineer manager to overcome many of these problems in adopting innovational technology. Properly established, they tell the engineer manager what he has accomplished and the approach needed for solutions. Shifts in plans cause confusion, such as when innovational technology adoption is underway to meet a goal and the goal is then changed. A systems management approach requires the engineer manager’s careful assessment of the project. He must consider input from both inside and outside his organization. The engineer manager must have a’ clear understanding of all activities and parameters in developing a flow diagram similar to Fig. 1. Figure 1 illustrates an integrated analysis of the overall requirements for describing and classifying the adoption of innovational technology. This integrated analysis can assist the engineer manager in evaluating the pertinent considerations involved in the establishmen t of activities. Accordingly, procedures for this analysis have been generalized so as to be compatible to most firms. This generalization provides a common basis for the analysis; whereas, a complete analysis would require the enetry of specific characteristics for the firm. Briefly, the system’s framework begins by identifying the major sources of activities generating innovations. Then an overall description of factors affecting the innovational technology is set out. Next is the identification of potential future innovational technology. After identifying and qualifying the many sources of innovational technology, they are evaluated in terms of product feasibility and legal and safety standards, analyzed by market potential, and R & D manufacturing requirements. If acceptable, the program can be developed and initiated by the engineer manager.
A systems analysis approach in adopting innovational technology is the most fundamental process in developing the strztegy for the engineer manager. Systems analysis provides the framework necessary to adopt innovational technology in the attainment of the firm’s comprehensive objectives. It provides a strategy for the engineer manager to consider the various threats and opportunities in adopting given innovational technology, each one’s weaknesses and strengths. Rapid environmental changes confronting the engineer manager require that the engineer manager have a rather well developed strategy, One of the most important strategies is new products since these, more than any other single factor, will determine what a firm is or will be, which in turn depends on the innovational technology adopted. An effective strategy must be based on knowing all aspects which are developed in the systems analysis framework (Fig. 1). These include the following: a*Identify needs and alternatives of innovational technology Determine parameters for these Identify future innovational technologies and quantify each Identify potemal problems and industry standards Establish criteria for parameters Specify innovational technology in terms of products and processes Develop requirements Feasibility analysis of innovational technology. The next stage of the analysis is to identify and quantify existing problems with present innovational technology Establish innovational technology criteria that will be used for evaluation of various innovational technology Determine market potential * Define resources . Develop R & D programs l
l
l
l
l
l
l
l
l
l
. Determine feasibility best on market, resources required and R & D Se&t optimum innovationa et/processes . t appropriate innovational technology that meets. constraints 0 Select equipmlent and personnel - Implement programs. The systems approach in adopting innovaional technology ensures that the engineer nager has implemented a strategy that will rce him to consider all factors. With a sysanalysts framework the engineer tems r can develop a strategy by which the ation c;m adopt and modify innovatechnology that exhibits weaknesses. The systems approach allows the engineer anager to develop a strategy for adopting innovational technology in the organization which support the firm’s goals and objectives. The system is a plan so complete that it *takes into account all possible alternatives, even opposrtion. The system is an impleenting plan which supports goals by determining how the organization can best adopt innovational technology within its limited resources. The purpose is to emphasize strong oints and select weaknesses having the least egatrve effect. l
adoption of an innovational. technology reject by using systems analysis, dll alternaderation. Co wsequently, stems analysis provides a method whereby er can de~4zmine the y with present innovational techthe effects of competition. As a nds and resources are devoted to it onable profitability and the evahta adoptions.
engineer manager can, overcome many &stacles in physical feasibility, criticism, market development, and other areas, which allows him to be successful and exhiiDit qualities which are rare and often annoying to others. It further provides the enlgiheer manager with self-confidence, dedication and patience when dealing with adverse criticism, Because innovational technology passes through managerial phases, individuals who are qualified by knowledge and experience to guidi innovational technology through its formative stages of exploration and feasibility studies are almost certainly not qualified to manage it through the adoption phase. Even if they were qualified and willing, their talent should be applied to other advanced efforts. With a systems management approach the engineer manager is involved in the various adoption phases and can effectively accept and manage these activities. Along with these preliminary engineering management techniques, several other factors contribute to the prclbable future profitability of adopting innovational technology. One important factor is timing: At what state will the innovational technology pay off? There may be no doubt that it will eventually be profitable, but the efficient use of resources demands that the enefit be in the foreseeable future. Even if the innovational technology is sound, it may require many years before profitability will occur. To make the systems management approach effective, the engineer manager must follow good management practices, such as: constantly giving compliments and encouragement to the group using timely information on when to make ved and sharing the risks showing that he is approachable demonstrating an openness for communica-
93 * developing xhedules and control measures * coordinati;lg activities with relating a sense of urgency irnrovational technology having goals to meet which dence and morale distributing risks among all l
l
deadlines
as
all involved to adopting
l
l
*
build confil
l
l
(Received November 17, 198 1; accepted December 29, 198 1)
dividing work into small, separate, measurable activities performing coordination and planning at the lowest possible level providing directions for adopting good innovational technology allowing participation as an important form of reward providing proper rewards.
Engineering Costsand Production Economics, 7 ( 1982) 87-93
Elsevier Scientific Publishing Company, Amsterdam
Printed in The Netherlands
INfSINNOVAllONAL TECHNOLOGYIN IN John M. Amos Center for Applied Engineering Management, School of Engineering, University of Missouri-Rolla, Rolla, MO (U.S.A.)
Abstract Adopting innovational technology is a complex and difficult problem for the engineer manager, especially in small organizations. Because the engineer manager is in the midst of these projects, he has difficulty in
looking at the process objectively. To o;‘ercome these problems a systems approach provides the engineer manager an effective aud usefir method in coping with the adoption process.
INTRODUCTION
same: too little too late! Many engineer managers believe they are not responsible nor need to be concerned with the effect and intluence of innovational techno their managerial practices. Yet, there is a need to be concerned, as top management in most firms holds the engineer manager responsible. This paper will concentrate on the management phase of adopting innovational technology*
Adopting innovational technology is essentially a transformation process where by potential innovations are identified and evaluated to determine if they are profitable for the firm to manufacture and market. The engineer manager is consistently involved in adopting innovational technology, but directs little attention to the way it is managed. Yet, industry is utilizing innovational technology at a tremendous rate which affects the individual firm in many ways. Because of the lack of attention to innovational technology by the engineer manager, innovations are often duplicated, which is a tragic waste of time, money and effort; and, secondly, outside competition may have inventions and discoveries on the market before the organization is able to implement its own. When this happens, the engineer manager may place the blame on personnel problems, outdated policies, or the wrong decision; but the results are always the 0167-188X/82/0000-0000/$02.75
INNOVATIONAL
TECHNOLOGY
Innovational technology has always been adopted, but in the past most projects were unplanned, and firms were able to survive rather well without constant concern with this phase of engineering management. The significant reasons why innovational technology is important to the engineer manager are many. Principal ones are that (1) present products become obsolete at an ever increasing rate, (2) there is increased competition, especially in markets with international
0 1982 Elsevier Scientific Publishinpl ComDanv
competition, (3) +rns have more knowledgeable and progressive customers, (4) there is ir,ti:reased interest by firms sparked by successful innovational technology, and (5) there has been a rapid development of technology transfer systems. With this increased pressure, only 2 out of 100 initial new ideas eventually become successful new products. With this low ratio, firms must improve their adoption process resulting in considerable of innovations, improvements in the firms’ R & D productivity. Rut the engineer manager must understand and manage the adoptive process. A number of studies* have indirectly focused on the success of innovational tech~ology by firms. These studies found that bet ween two-thirds and three-fourths of all successful adoptions were stimulated from some market “need” while others are stimulated from new technology. Thus, decisio:ls to adopt innovational technology are stimulated by two main sources: new technology and product market needs. These studies she w tha.t d.ecision-making information for innovational technology adoptions from the present market-oriented product line are of greater importance to the engineer manager than those due to technological needs. This distinction also holds for sources of information derived from Gent needs, and its regularity is of great value for decisions in the adoption of innovational technology. Additionally, it was found that innovational technology adoptions are not a function of the individual innovator’s characteristics, for organizations with laboratories have no significan? advantage in the level of successful innovatier~:~l technology adoptions. Even the size of thf~ organization does not seem to guarantee success. +A summary of various studies are included in “Information Styles and Technological Innovation”, one Engineering Marqement , Goldhat, Feb. 1976, pages 5 i -62.
Successful innovational technology adoptions occur when the work is continuous and cumulative over a period of time. Channels of information important to the engineer manager are either informal or formal. Informal channels in most situations have a greater value to the engineer manager. .When available on a regular basis, they are the most effective source. The informality of this source makes it highly unpredictable for the engineer manager as it is initiated elsewhr:;e with many barriers, but it is important information in the adoption of innovational technology. With information sources predominately internal and transmitted mostly through informal channels, technical contacts inside and outside the firm are especially important. However, equally important is the reliance upon the engineer manager’s knowledge, experience and creative objectives concerning which items should be included for the adoptive process. In adopting innovational technology many questions arise: What are the best relationships within the organization? How can the adoptive process best be managed? What accounts for the preponderance of innovational technology adoptions? Should management move completely to market-oriented programs?
PROBLEMS IN MANAGING INNOVATIONAL., TECHNOLOGY ADOPTIONS
Even though the major initial stimulus for adopting innovational technology is from market-oriented product needs, the engineer manager must still consider the initial stimulus from new technological sources which cannot be ignored as they may offer new opportunities for the firm and provide the stimulus for follow-on innovational tech-
nology adoption. At times, success comes from entirely new innovational technology,
89
not from traditional approaches. For example, polymer technology, rather than agricultural technology, transformed the rubber and textile industries. Similarly, solid state physics is revolutionizing electronics, which is, in turn, revolutionizing the aerospace industry. Therefore, the engineer manager must continually support projects outside the constraints of the firm’s existing manufacturing marketing and abilities. Innovational technology represents a complex interaction between adoption, the marketplace needs for new technology, and the engineer manager’s skills and techniques to manage it. The engineer manager must realize that the process of adopting innovational technology is important and that it must be managed. Particularly, he must deal with it with greater perception and must develop common policies for adopting innovational technology. Each example of innovational technology imposes unique requirements and must be managed individually. This requires the engineer manager to possess technical and marketing information for judging proposals and making decisions. The engineer manager must assume an ethos of risk taking in adopting any innovational technology, for the risk of failure exists. The engineer manager must have a high order of coordination among different innovational technology adoptions. This is necessary to facilitate continuous evaluation, The engineer manager rarely develops the adoption process to the extent necessary to equalize it with the commitment which he develops for marketing and manufacturing. Because of the constant pressure of urgent operational problerns, there is a special need for the engineer manager to develop a strategy for innovational adoption. In the adoption process selectivity is the key. The engineer manager must reduce the time required to adopt innovational technology, select one and then place i”. on the market.
The recognition and exploitation of innovational technology adoptions often takes more time than normally required to make other engineering management decisions. The engineer manager must speed up this process. People involved in the adoption process prefer to work in a loose, unstructured environment without close supervision by the engineer manager; but he must motivate them in order to produce consistent results. The engineer manager must be able to reject innovational technology adoptions even after some commitments. He must be selective, but he must encourage the adoption of new innovations. Therefore, the engineer manager must devote time and work to his group on a regular basis so that successful decisions are made together. The engineer’manager must develop an attitude of acceptance and desire for innovational technology among his people. He must insure that his superior recognizes the potential for adopting successful innovational technology. The capital structure affects the length of time the firm can wait for adopting innovaSmall companies with tional technology. limited capital must consider short-term adoptions, Even the firm’s source of raw materials influences the direction of innovatior al Ldoption. An unstable source, such as some energy resources, requires agressive technology adoptions to insure adequate supplies. A SYSTEMS APPROACH TO ADOPTING INNOVATIONAL TECHNOLOGY
The engineer manager faces many problems in managing the adoption of innovational technology in a manner consistent with the firm’s established goals. As with any aspect of engineering management, adopting innovstional technology must begin with establishing an approach or system to achieve the organizational goals. However, instead of clear direction, in most organizations there is great
-
-
6urlIodans
-
6urlelado lutioTaA.ap
T
paaesrls3
uo~afiptne aso3
1uma6euew
------I au!)aa
Bu~u!era
lauuoslad
auawrnba
I
I
91 confusion as to what, why and how innovational technology is to be accomplished. A systems approach helps the engineer manager to overcome many of these problems in adopting innovational technology. Properly established, they tell the engineer manager what he has accomplished and the approach needed for solutions. Shifts in plans cause confusion, such as when innovational technology adoption is underway to meet a goal and the goal is then changed. A systems management approach requires the engineer manager’s careful assessment of the project. He must consider input from both inside and outside his organization. The engineer manager must have a’ clear understanding of all activities and parameters in developing a flow diagram similar to Fig. 1. Figure 1 illustrates an integrated analysis of the overall requirements for describing and classifying the adoption of innovational technology. This integrated analysis can assist the engineer manager in evaluating the pertinent considerations involved in the establishmen t of activities. Accordingly, procedures for this analysis have been generalized so as to be compatible to most firms. This generalization provides a common basis for the analysis; whereas, a complete analysis would require the enetry of specific characteristics for the firm. Briefly, the system’s framework begins by identifying the major sources of activities generating innovations. Then an overall description of factors affecting the innovational technology is set out. Next is the identification of potential future innovational technology. After identifying and qualifying the many sources of innovational technology, they are evaluated in terms of product feasibility and legal and safety standards, analyzed by market potential, and R & D manufacturing requirements. If acceptable, the program can be developed and initiated by the engineer manager.
A systems analysis approach in adopting innovational technology is the most fundamental process in developing the strztegy for the engineer manager. Systems analysis provides the framework necessary to adopt innovational technology in the attainment of the firm’s comprehensive objectives. It provides a strategy for the engineer manager to consider the various threats and opportunities in adopting given innovational technology, each one’s weaknesses and strengths. Rapid environmental changes confronting the engineer manager require that the engineer manager have a rather well developed strategy, One of the most important strategies is new products since these, more than any other single factor, will determine what a firm is or will be, which in turn depends on the innovational technology adopted. An effective strategy must be based on knowing all aspects which are developed in the systems analysis framework (Fig. 1). These include the following: a*Identify needs and alternatives of innovational technology Determine parameters for these Identify future innovational technologies and quantify each Identify potemal problems and industry standards Establish criteria for parameters Specify innovational technology in terms of products and processes Develop requirements Feasibility analysis of innovational technology. The next stage of the analysis is to identify and quantify existing problems with present innovational technology Establish innovational technology criteria that will be used for evaluation of various innovational technology Determine market potential * Define resources . Develop R & D programs l
l
l
l
l
l
l
l
l
l
. Determine feasibility best on market, resources required and R & D Se&t optimum innovationa et/processes . t appropriate innovational technology that meets. constraints 0 Select equipmlent and personnel - Implement programs. The systems approach in adopting innovaional technology ensures that the engineer nager has implemented a strategy that will rce him to consider all factors. With a sysanalysts framework the engineer tems r can develop a strategy by which the ation c;m adopt and modify innovatechnology that exhibits weaknesses. The systems approach allows the engineer anager to develop a strategy for adopting innovational technology in the organization which support the firm’s goals and objectives. The system is a plan so complete that it *takes into account all possible alternatives, even opposrtion. The system is an impleenting plan which supports goals by determining how the organization can best adopt innovational technology within its limited resources. The purpose is to emphasize strong oints and select weaknesses having the least egatrve effect. l
adoption of an innovational. technology reject by using systems analysis, dll alternaderation. Co wsequently, stems analysis provides a method whereby er can de~4zmine the y with present innovational techthe effects of competition. As a nds and resources are devoted to it onable profitability and the evahta adoptions.
engineer manager can, overcome many &stacles in physical feasibility, criticism, market development, and other areas, which allows him to be successful and exhiiDit qualities which are rare and often annoying to others. It further provides the enlgiheer manager with self-confidence, dedication and patience when dealing with adverse criticism, Because innovational technology passes through managerial phases, individuals who are qualified by knowledge and experience to guidi innovational technology through its formative stages of exploration and feasibility studies are almost certainly not qualified to manage it through the adoption phase. Even if they were qualified and willing, their talent should be applied to other advanced efforts. With a systems management approach the engineer manager is involved in the various adoption phases and can effectively accept and manage these activities. Along with these preliminary engineering management techniques, several other factors contribute to the prclbable future profitability of adopting innovational technology. One important factor is timing: At what state will the innovational technology pay off? There may be no doubt that it will eventually be profitable, but the efficient use of resources demands that the enefit be in the foreseeable future. Even if the innovational technology is sound, it may require many years before profitability will occur. To make the systems management approach effective, the engineer manager must follow good management practices, such as: constantly giving compliments and encouragement to the group using timely information on when to make ved and sharing the risks showing that he is approachable demonstrating an openness for communica-
93 * developing xhedules and control measures * coordinati;lg activities with relating a sense of urgency irnrovational technology having goals to meet which dence and morale distributing risks among all l
l
deadlines
as
all involved to adopting
l
l
*
build confil
l
l
(Received November 17, 198 1; accepted December 29, 198 1)
dividing work into small, separate, measurable activities performing coordination and planning at the lowest possible level providing directions for adopting good innovational technology allowing participation as an important form of reward providing proper rewards.