Colleagues,
The Technology Transfer Society and the Product Development Management
Association put on a joint conference in Austin in early March. At the
suggestion of a member, the summary article is provided below.
If you would care to republish the article within your organization, I will
provide you a formatted Word 97 file. This article is under two pages long.
I also have one-page and half-page versions. Also, if you feel this is
appropriate for a journal, please share contact information.
The Technology Transfer Society will hold it's Annual Meeting July 15-18 in
St. Pete's Beach, Florida on Technology Transfer in the Next Millenium.
Gary
CREATING AND MANAGING THE TECHNOLOGY PORTFOLIO
What is your true job? Science? Engineering? Management? Marketing? No.
Not really.
If you work in or around technology, your job is to add value by
changing what is possible. To convert a portfolio of ideas into a portfolio
of opportunities. To manage a portfolio of risks into a portfolio of
profits.
Not small tasks!
Portfolio management was the topic of this year�s joint conference in
Austin, March 4-6, jointly produced by the Technology Transfer Society (T2S)
and the Product Development Management Association (PDMA).
PDMA focuses on the theory and practice of new product development
while serving functions from R&D through marketing across a range of
vertical industries. T2S focuses on theory and methods by which designs,
ideas, research, and innovations are moved from concept to higher levels of
utilization. T2S serves individuals and organizations from industry,
academia, and government.
We came together to discuss portfolio management - how to handle
multiple projects all targeting delivery of new or improved products that
compete well in one or more markets. This topic is critical to the success
of corporations everywhere.
The diversity of speakers both broadened the scope and delved into details.
Portfolio management turns out to be a much bigger topic than many of us
imagined.
PORTFOLIOS OF CHANGE
I oversimplify here to create a mental picture. Imagine a value chain - the
steps from initial concept to a product in use by end customers.
At product level, we start the value chain with a portfolio of ideas
and raw technologies plus the expertise to prove concepts. To complete the
chain, we move an ever improving technology through a portfolio of
development processes.
Effective development is constantly in touch with customers. Engineers don�
t drive good product development; customers do.
At portfolio level, we manage a suite of products moving along a suite
of value chains, each in different stages of development or redevelopment.
We evaluate and control risks, ultimate value, and timing of the various
projects. We listen to a whole portfolio of customers, as many as are
served by our potential products.
At business level, we deal with everything necessary to support a
portfolio of developing products plus promotion, delivery, service, and
support of finished products. This article focuses on the product side,
including portfolios of sources of technologies, business strategies,
alliances, and suppliers.
At community level, we conceive of a technopolis, a technology-based
city. This is a community with a compatible portfolio of technology
companies sharing resources and supporting each other�s efforts.
Portfolio management is what we make of it. Learning the range of
viewpoints enriches our abilities to manage our own portfolios.
THE FOUR LEVELS
Product Level: Cole Dudley of the AM Fund is a venture capitalist
specializing in start-up companies. He wants to get a single value chain
started, then build a company around it. He funds several companies at a
time, creating a portfolio.
Hank Davis of NASA manages a portfolio of technologies available for
license. He moves technologies out to industry, enabling new value chains
or enhancing existing ones.
Dudley and Davis face similar problems from different perspectives.
They must evaluate options and choose the best. NASA wants to enhance
American competitiveness, so Davis� team evaluates technologies for economic
impact.
Dudley creates wealth, so he looks for just the right product and company
for a technology. Factors include low front-end costs, fast development
cycles, and the potential to be a platform for a range of products.
John Thompson of Lucent sees each value chain as a tightly linked
series of technology transfers. Rather than manage product development as a
portfolio of processes (research, development, design engineering, �),
Thompson suggests managing a portfolio of technology movements.
Thompson�s view enables true quality management of product development.
The key is understanding that transfer is not delivery of a prototype to the
next stage of the chain, but delivery of the ability to recreate the
prototype in a new environment with new criteria for success.
Product development is a portfolio of capabilities all managed to meet
customer needs, at a profit, in a complex competitive environment.
Portfolio Level: John Gibson of Landmark Graphics, a top-20 software
company, found himself managing a portfolio of 28 products from acquired
companies. His job was to integrate both the portfolio and the cultures.
To integrate culture, he transferred people from group to group, got
technology involved with distribution channels, and distributed R&D directly
into product development. He moved the focus from products to customer
solutions and the dialog from �what we do� to �what they need.�
To combine portfolios, he raised integration to the level of a vision,
a dream all could share. Landmark put all product development on one
software platform with one data management framework and one market focus.
Then he rationalized the diverse customer interfaces and training programs.
Finally, he froze all development until Y2K had been solved, a process which
simply could not have been done without an integrated product portfolio.
Rob Beachy of Axiom Business Products points out that timing is
crucial. Optimum timing matches product introduction with market readiness.
To forecast the right timing, keep customers involved throughout
development.
Beachy invests relative to risks. Products new to the world are
greater risks and harder to time than minor additions to existing product
lines. When the stakes are high, find out in detail what customers wish
for, how they choose between alternatives, and what it will take to get them
to substitute a new product for what they use now.
Business Level: As we move from portfolio to business level, we become more
strategic, looking beyond tasks to company performance.
Tim Ruefli of the University of Texas asks us to think in terms of a
portfolio of strategies. Very briefly:
? Technology: What is our core knowledge base?
? Corporate: Where do we fit?
? Business: How do we compete?
? Functional: How do we coordinate?
? Enterprise: How do we assure legitimacy? (Image)
? Cooperative: With whom do we form alliances?
? Hypercompetitive: How do we disrupt the market?
? Change: How do we manage it?
Paul McClure of Xidex Corporation is an entrepreneur who says that
�intrapreneurs� face similar issues. Growth takes a portfolio of skills and
human factors applied over several stages of company evolution. He says
that every business evolves from pre-commitment to new venture to expansion
to professionalization, to maturity. Crises typically occur at each
transition.
Managers operate today�s business. Leaders prepare us for the next
stage and push for transition. Think about that. Two distinct types of
individuals, one optimizing the status quo, the other not satisfied, both
working together to achieve corporate growth. Portfolios of products are
managed within the context of a portfolio of business objectives.
Sean Murphy of Motorola manages the interface with SEMATECH, a
consortium of semiconductor companies working together for mutual benefit.
He faces the dual problem of managing a portfolio of corporate
relationships, then transferring a portfolio of technical advances back into
his company.
Collaboration isn�t easy when working with competitors. One key has
been to create a shared vision on which all companies can align. They built
a National Technology Roadmap projecting when critical technology will be
required. This is strikingly similar to Gibson�s approach at Landmark.
Frank Julian of SBM, Inc., carries collaboration a step further by
asking, �What should suppliers be doing for us?� He drives productivity up
by outsourcing specialized or repetitive tasks to a portfolio of suppliers.
The Community Level: David Gibson of the IC2 Institute in Austin talked
broadly on technology transfer and knowledge diffusion. Let me focus here
on one of his side points.
A technopolis enables creation of wealth just as surely as a good
com-pany does. A combination of education, large companies, emerging
companies, supportive government, networking, infrastructure, visionaries,
and quality of life combine to enhance what companies or even industries can
accomplish.
At this level, our portfolio can�t be managed; it must be led. That
may be the best lesson of this conference.
A PORTFOLIO OF PORTFOLIOS
This conference caused us to think at four levels: product, portfolio,
business, community. Each impacts the other; each includes its own
sub-portfolios of resources and processes.
To think about one part without the others is just as short sighted as
de-veloping products without constantly listening to the voice of the
customer.
Our job isn�t to perform tasks. We have larger roles. My contribution
to this diverse dialog is to remind us all that we need to play six core
roles: Be a conscious agent of change. Add value every day. Satisfy
customer needs better than any alternative. Lead the company toward
success. Be a solution and develop new solutions. Generate opportunities.
If we play these roles in the management of our own portfolios, we will
be true competitors that generate wealth for our companies.
_________________
The Scientist-Marketer, Dr. Gary Lundquist works with high-tech companies to
increase market impact and with technical professionals to enhance careers.
303-840-9929,
garyl@market-engineering.com