How sharp is your Technology Strategy?

By deploying a toolbox concept for strategy and innovation companies can move quickly and make better decisions about which investments to back.

Companies are frequently looking for growth, innovation and productivity gains to enhance their prospects over the longer term. Unfortunately, more than 90% of strategy fails to some extent (LINK). 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.

20 minute read.

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.

Let’s get the bad news out of the way. It’s possible, indeed, probable that your strategy is weakly design or poorly executed.

Or what if it's Both?

The Link between strategy and company performance

Studies show that 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.

A recent meta-study by George et al reviewed the link between doing strategic planning and organisational results.

Strategic planning has a positive impact on organizational performance in the private and public sectors and international settings. 


Strategic planning is particularly potent in enhancing organizational effectiveness i.e., whether organizations successfully achieve their goals.

For developing effective plans for technology, we can describe three main problems;

1.     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.

2.     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.

3.     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)

Technology strategy should concentrate on the capabilities that are essential to the firm’s competitive knowledge base and goes beyond just the acquisition of these capabilities to include its management and exploitation. 

It also deals with the identification, development and protection of the knowledge and capabilities.

But think about technology strategy as an intrinsic part of innovation strategy, since innovation strategy determines how the knowledge and ability (i.e. technology) is used to meet organisational objectives (Goffin & Mitchell, 2010). 

This means that a successful integrated technology strategy should ideally,

1.     Be proactively undertaken,

2.     There should be some deliberation, intent or conscious action,

3.     It’s a skill that can be learned, taught and developed,

4.     It should be alive; refreshed periodically,

5.     It directly leads to better innovation performance and results,

6.     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 formed CTO of NASA’s Johnson Space Center puts it like this,

1.     Why do we need to respond or Change? Usually, the market or external response.

2.     What is the nature of our response? Where will we create value in future?

3.     How do we advance the state of our knowledge? What investments do we make? What technologies do we do (develop) / buy / ally with?

Knowing this, 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 a 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. 

FIGURE: A technology strategy "toolbox"

The concepts of a toolbox for technology strategy is explained in depth by Kerr et al. (2016).

But what if technology managers are faced with more radical or require deeper exploration, perhaps if a division needs to refresh its technology strategy? The chosen technology strategy toolkit may include techniques that enable additional tasks such as, subject exploration and information assessment, decision-making about options to take and stakeholder communication.

Exploration: May require basic research about the trends and drivers behind a theme of industrial interest or future socio-economic directions. Scenarios may be investigated through a scenario tool and used to produce alternative roadmaps. In the case where a firm is looking for radical or fresh perspectives, creativity tools may be used. Research about new technologies may inform technology managers.

Decision-making: Tools may be chosen to assess the decisions around technology “make or buy”, technology development risk and the capabilities required to invest or disinvest. Tools may be used in workshop situations where collaborative working is advantageous, or offline where detailed deliberative working makes sense.

Communication: To deal with some of the failings in technology planning, technology managers must at some point access organisational resource. Communication and engagement in technology futures must, therefore, speak to the wider organisation and stakeholders. Tools for the creation of visual narratives or stories may be used (Kerr and Phaal 2015). In the context of workshops, business case tools and templates may quickly advance plans with the effective communication of critical information.  

Making better decisions about key issues

If technology strategy is really about making better, more robust decisions about technologies then the scalable toolkit should include approaches to understanding competitive positioning, the balance of a portfolio of technologies and indicate the directions to head with respect to those technologies. According to Ilevbare (2016), key technology strategy-related questions that can be answered using the scalable toolkit platform that helps relate to:

Competitive positioning, such as customers’ future needs and desires, important trends and drivers including emerging and potentially disruptive technologies and identifying core technologies and competencies from those which should be acquired.

Strategic balance about which priority technologies should be included in the technology portfolio, improving the balance of our technology portfolio and aligning technology/innovation/business portfolios.

Strategic direction and planning should consider how technology plans align with the technology portfolio including resources, how technology plans support innovation streams and business objectives and align with market demands and to manage critical technology/market uncertainties and risks and guidance about investment decisions and resource allocations or “strategic buckets”.

All these questions do not need to be answered at the same time, or within the same technology strategy planning episode. The most critical questions at any time can be identified and addressed by customising and applying the scalable toolkit platform. Other questions can be addressed as they become relevant. The advantage of using the same basic platform of three core tools is that it becomes much easier to maintain coherence and alignment between these various issues as they are resolved, and a more complete picture of the firm’s strategy emerges in a step-by-step manner.

IMPACT STORIES: Toolbox in action 

The flexible and configurable nature of the technology manager’s toolkit works flexibly across the “length scales” of organisation size and complexity. Two examples describe this agile approach; toolkits may be deployed in a single day through to multiple interventions over several months.

EXAMPLE 1: SME Strategy

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 revenue growth. 

But also the process engaged the wider organisation in the growth journey as much as the strategic plan itself.  

FIGURE: Business and Technology for SME

EXAMPLE 2: Corporate technology strategy

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.

I designed a workshop innovation process based on the technology strategy toolbox to design a set of 3-day workshops.

First thing is, I 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; the strategy was tested 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. This alludes to the hierarchical or nested nature of technology strategy.

In this example, 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 house.

FIGURE – Corporate technology strategy development

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 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,

1.     Faster, more effective and rigorous answers to What technology do we invest in.

2.     Knowing what capabilities to invest in with far greater certainty; what projects to place the precious resource on.

3.     Future-proofing, to some degree, on the strategic objectives of a firm with an uptick in ROI.

ABOUT

Rob Munro delivers strategic innovation services to companies, universities and government agencies giving business and innovation leaders the practices, tools and confidence to achieve best in class innovation results. The two examples were designed and led by me through my association with IfM Engage, the knowledge transfer business of the Institute for Manufacturing at Cambridge University.

If you want better innovation results for your organisation, please connect with me and reach out via direct message.

#innovation #strategy #technologystrategy

MORE READING

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