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Are Faulty Assumptions Harming Your Technology Business Plans? Part II. By Richard A. Siegel In an article in the March-April issue, we examined two flawed assumptions frequently made by upper management of technology-based companies when commercializing new technologies. Both concerned opportunities for securing market intelligence. This time, let's look at people -- the types of people you entrust to head technology commercialization -- and assumptions often made about them. These assumptions also can be costly, not only for technology-based companies but for tech-based government agencies and university labs seeking to generate significant revenues by moving their technologies into the commercial marketplace. Assumption
#3: Sound familiar? Well, this one can cost you a bundle if you put the wrong type of person in charge. You might realize only a fraction of the revenue-generating potential of a technology, or worse, you may never successfully bring the technology to market. Before doing anything else, answer this question. How important might this new technology be to your organization? If the answer is essentially "moderate," go ahead and let the enthusiastic, entrepreneurial technologist run the show. It will be good experience. If the answer is "real important," that's another story. The primary fallacy of this assumption is that expert knowledge of the technology + enthusiasm + entrepreneurial spirit alone probably won't drive it onto the market in any big way. So what's wrong with having this technologist run the program? Why does this assumption stack the odds against the technologist, you and the company? The absence of solid business, market and customer development experience, that's what. Often, this type of person, no matter how skilled a technologist and a tech program leader, doesn't possess the needed skills and experience to cover all the bases required to successfully commercialize technology. Business and finance disciplines are missing. Needed skills and experience for this job include the ability to:
These are just some of the skills and disciplines needed to bring new technologies onto the market today, particularly if you're seeking global business opportunity. You simply can't afford to take the position that this technologist will learn on the job and develop the skills noted above in real time. When you check on the status of a commercial development program, does any of this sound familiar? "We're finishing up the study." "We're going through a review of the data." "We're still waiting for prospective customers to respond." "The technology isn't exactly right, we've got more development (tweaking) to do." While all of these answers could be true, the fact is there are no real actions and no real business prospects. What's wrong? It could be symptomatic of a classical 'technology push' approach frequently used by technologists when they're in charge of technology commercialization. After all, it's what they're most comfortable with. Technology push is the hard way. A project leader with business and market development experience can approach the same objective by employing techniques that generate 'market pull.' The difference in energy, and resources, is akin to pushing a boulder up a hill. Technology commercialization using a 'market pull' approach will accelerate the entire program and get your technology into the hands of users faster than any other approach, short of pure luck. This is possible with the right person in charge and the right approach. Why not run technology commercialization, new product development and new business development with the same drive, expertise, precision, multi-disciplinary knowledge and control systems you use in your engineering and manufacturing operations? Here you're just using different kinds of skills and experience centered on business, marketing, technical, political and financial know-how. Yes, technical and political are among them. The right type of project leader needs to feel comfortable with technology, and needs to work in a partnership relationship with the senior technologist responsible for developing it. The project leader also needs to 'handle' the organization politically. Successful technology commercialization projects are the ones populated with the right people doing the right things at the right time. Managing technology commercialization requires very different skills than technology development. The technologist's key role Needless to say, the entrepreneurial, enthusiastic senior technologist is a critical player on the business (market) development team -- indispensable, in fact. As the project leader (as described here) gathers new information from the market and other sources, only the lead technologist can refocus or reconfigure the technology to provide even greater value to prospective customers and to your company. That's an extremely valuable contribution, one that can ensure success. But it's not the multidisciplinary role of the project leader who needs to know how to deal with many more factors and critical issues as the process moves forward. Perhaps by now you're saying that all this is rather fundamental. It's not. I've seen lots of high-tech companies here and in Europe that typically put senior technologies in charge of commercial/business development projects, and they're not making much progress. In fact, some of them haven't had a real new business success in years. Some firms encourage a lead technologist to attract others in the firm to their projects. It's very entrepreneurial. Very team oriented. But too often, very unproductive when no one who "signs on" has a clue how to build a business. No one has more respect than I for the senior technologist. The message is not that a technologist can't create new business. It's that he shouldn't. In this era of "speed to market," there isn't time to wait for the technologist to learn how. The more time he spends trying is less time he has available to produce magic in the first place. So where can you find business and market development professionals to run your technology commercialization programs? The answer may be outside of your organization, if you're heavily technology oriented. But look inhouse first. You might be surprised to find a candidate in a sales division, or within your senior technical support staff. If you're a government agency or a university lab, maybe it's one of your top communication or industry coordination specialists. Whatever this person may be lacking technically, the senior technologist can teach him. Better yet, when a "technically disadvantaged" project leader goes into the field to speak with prospective customers, the senior technologist should come along. But don't settle. If the technology really could be important to the growth and expansion of your business, find technology commercialization people outside your organization. They really do exist. Assumption
#4: This is almost always wrong. Again, different sets of skills, personalities and driving forces are needed. Assume you found the right type of person to commercialize your new technology and that this person has done a swell job launching products from the technology in high-value applications and market segments. He or she has also established clear and sustainable ways to achieve competitive advantages; put a strong organization together to manufacture, market, sell, distribute and service products; selected a solid business model and established use-of-capital systems able to produce a good and timely return on investment; and put the next generation of the technology into development. Ditto for technology-based government agencies and university labs. Business opportunities in multiple markets have been identified, attractive manufacturing and marketing partners have been found, equitable and sustainable working relationships have been put in place with them, tech-transfer and tech-support systems and people are in place and next generation technology is in development. Now what? Suppose some time passes and eventually the business transitions from launch to growth mode. The firm needs to continue to innovate and create new opportunities for itself. It still needs a multidisciplinary dynamic leader. Managing it now requires different skills and experience than were needed initially. You have two choices: leave the original business leader in place to grow the business or turn him loose on another new project. The flaw here is that you assume the best utilization of this person is to leave him where he is. If it ain't broke, etc. Problem is, it could easily break if you leave him there through the growth phase. Factors at play here include financial motivation, challenge and psychic income. The launch manager may see greater personal reward in continuing to have responsibility, as opposed to returning to a "business creation" mode. But often, this type of person needs the challenge to build once again and actually can become impatient with the more ordinary responsibilities of running a business long term. It's not always clear which way to deal with a 'launch' manager, but one thing is certain. Managing a business in a growth mode requires a person who is more concerned with risk, can manage many more people and systems, has skills to grow the business many fold, has abilities to "value engineer" the firm and possesses different people and hiring skills. Take Yahoo! Inc., for example. Jerry Yang and David Filo created the first online navigational guide to the World Wide Web in 1994. Then, in 1995 after they formed Yahoo! Inc., they were equally clever to bring in Timothy "TK" Koogle (president & CEO) and Jeffrey Mallett (COO) to grow and expand the business. In only three years, this second-stage management team has brought Yahoo! to over $6 billion in market value. Nice going, Jerry and David. You knew just when a different skill set was needed and you've got the equity value to prove it. In short, success in technology commercialization, and business management, has a lot to do with the right people doing the right things at the right time. Richard Siegel is founder and CEO of ISIS International Inc., a Connecticut-based international consultancy specializing in strategic planning, new business development and international technology commercialization. He can be reached at 203/261-5300, Fax 203/261-4911 or rsiegel@isisusa.com. Article republished with permission of Technology Business Magazine. Copyright © 1999 Richard A. Siegel. All rights reserved. |
