There’s a lot going on at CIMS — projects on cloud computing and searching unstructured data, dealing with complexity, learning about service innovation, and more that you can read about in this issue of the CIMS Technology Management Report. But what keeps researchers in the world of management innovation up at night? Recent speculation on that question led to the following imagined dialogue between Mariann Jelinek, Alden S. Bean and participants in the ongoing “R&D ‘Lab’ of the Future Project undertaken by the Industrial Research Institute’s Research on Research subcommittee (see the Fall 2009 TMR).
Jelinek is the Richard C. Kraemer Professor of Strategy at the Mason School of Business, College of William and Mary; Bean is executive director emeritus of CIMS and a long-time scholar of technological innovation. Their “dialogue” below draws upon excerpts from the interviews with IRI executives who make decisions today that will shape the “Lab of the Future.”First, some background:
Five years ago, the National Academies’ Rising Above the Gathering Storm report sounded the alarm that U.S. innovation was in danger, because the LOOKING AHEAD, from Page 1, quality and quantity of U.S. science, technology, engineering and math (STEM) graduates was being challenged by better educated and more numerous graduates abroad.
The picture hasn’t improved since: while U.S. R&D investment has grown at about 5% annually, South Korea’s and Taiwan’s have grown at double that, Singapore, Thailand and Malaysia at nearly triple, and China at 23% annually. China also graduates about 800,000 STEM first-degree holders to about 200,000 U.S. grads.
Just last month, the Academies released their follow-up report, Rising Above the Gathering Storm Revisited: Rapidly Approaching Category 5. It calls again for making sustained investments in U.S. education and research.
As researchers in this field, our worry is that business may decide, “We can’t get STEM grads in the U.S. — so we have to go abroad for lower cost, more talent ... But since we’re not hiring here, why should we have to pay for expensive science and engineering education?”
Fortunately, while U.S. firms are going abroad, they are also taking action here at home to improve math, science and technology education around them. Scientists and engineers from industry are mentoring, instructing and inviting students to work on projects. Companies — perhaps most notably Intel and Siemens/Westinghouse in their talent searches — are sponsoring competitions and awarding significant prizes to encourage students to stick to science and math. And last month, the USA Science and Engineering Festival offered another venue for scientists to reach out to students.
Finding the Talent
Still, everyone agrees that talent is critical. Consider what this LOF interviewee had to say:
”Whoever the talent is that is needed anywhere, that’s who gets hired. In a sense, it’s already happened in the U.S. People are hiring into their American companies located here in the U.S. those foreign scientists and engineers who aren’t being produced in the U.S. but who are critical.
“I think broad hiring will happen by the trickling evolution of commercially driven interests. What’ll happen is that the notion of national [status] — other than being kind of like ‘she has brown hair, he has blue eyes, how interesting; that person came from India’— won’t matter. The talent will just become a global pool of talent— a distributed virtual lab, if you like. In fact, a lot of companies are already thinking about this in their hiring.”
Here’s how a second interviewee looks at talent:
“Another driver for...a distributed virtual laboratory... is that the talent is not just here, in the United States. I mean, the talent is overseas, and it’s getting to be very good. Many people who get their degrees here are going back to their home countries, but even the universities and institutes in those home countries are tremendously good.
“And so there’s a lot of people not coming over here; they’re staying there and getting their Ph.D.s and working with the same institutes. All these governments are pumping lots of money into these institutes to compete. Now, most of the institutes are really focused on applied science, so they’re focused on getting things to market.China, I’d say, is almost an exception; in China there’s a lot of deep science.”
Do we worry about anything else? Yes, we worry about the implications of cloud computing and escalating computational capabilities for search. Developing a search strategy for accessing scattered, unstructured data is a fascinating problem—subject matter experts’ input is important, but often different disciplines or different arenas within what some may think is the same discipline may use different words for the same concept. And searching more broadly means learning to interpret those languages. Enough data may solve that problem. But search and communication are moving also to non-systematic, more informal sources — FaceBook, blogs, and Twitter, for instance.
We suppose that’s great. The voices of the young will be heard! Yes, but ... the norms of the setting are new to most companies. Youngsters have a completely different idea of what it is appropriate to share. There is real potential for picking up new trends, issues and emerging problems. The first publicity about Intel chips’ floating-point calculation errors in 1994 appeared on a user blog. Intel’s Andrew Grove responded online to complaints, initially insisting that the error would be exceedingly rare and that people were making much too much of it. Bloggers disagreed, and demonstrated the error. Competitors and some customers chimed in, and Intel soon had a fullblown PR crisis to respond to, not to mention a technical problem to fix.
But even that is not the only implication, by far. If blogs and FaceBook and similar social media are routinely included in searches, putting together a bit-by-bit portrait of anyone, or anything, from snippets of scattered information poses serious security issues.
Some companies already prohibit employees or company computers from linking to social media sites. Yet the coming generation, having grown up perpetually “on,” sharing their every move and emotion on line, are likely to be resistant to such constraints.
Further, newer and younger staff most likely to be avid FaceBook, Twitter and blog users are often a “24/7” crowd, working at home, and doing personal communicating at work.
Moreover, can a company exert control of employees on “their own” time, or at home? How? With what implications for personal privacy?
Trusting “Different” Employees
“GenX” (born 1965-1977) and “GenY” (born 1978-1994) employees are already here, the best of them well into middle management. (Future “GenZ” employees, born since 1995, are already in their teens.) How can executives and managers learn to trust these very different employees, who have a quite intuitive and practiced sense of how to use emerging information tools their bosses may not appreciate? Many report frustration because their information methods—like data mining, for instance—are not the methods of their bosses, who don’t trust methods or insights they don’t share.
Here’s one example from another LOF interviewee:
“For the company, loyalty is still going to be important — to keep their technology secret and confidential or whatever. If you have people jumping from one company to the other, how are you going to protect your assets? That’s such a constraint that I don’t even imagine how you can do it. And it’s a constraint that we are facing right now. Younger people are a lot more mobile. And we struggle, because they move from your company to your competitor’s company, and they’re taking with them a lot of their knowledge. It’s no longer the old way of working, where you have a very loyal workforce.”
Implications of Being Open
Nor does the trust issue end there. Open Innovation is a fact on the ground for CIMS companies (and for many others), and companies are increasingly collaborating with firms and experts “outside the walls.” Simple collaborations might be involved in outsourced manufacturing, say to a low-cost location in Asia. But innovation and new product development activities can involve sharing critical proprietary information, which is often in digital form. Can non-employees be effectively engaged while critical intellectual capital is retained? How?Some believe that foreign national employees will be effectively socialized by bringing them to the home lab in the United States. Others believe that research and development activities can be fragmented and dispersed — so that no single partner has the whole picture. But will broad computerized searches enable a savvy inquisitor to reunite those fragments?
What are the implications for individuals and for firms of being open? How shall we weight the undoubted importance of openness against the threats of information loss? Aside from the difficulties of sorting throughunderlying assumptions — openness is good; privacy is good — we need better ways of examining and exploring the potential of rapidly changing, dynamic environments for the management of technology. Research methods need to advance into real acknowledgement of the dynamism of the contemporary environment — the days of crosssectional, large-sample survey research are numbered, we believe. Any survey is at best a snapshot of the phenomenon it seeks to study, and the context keeps on changing! Many surveys and analytical methods assume simple cause-effect logic — yet both the uncertainty of the future and the complexity of relationships involved in efforts like innovation argue loudly that something more is needed.
Simulation and Modeling
Are we using as much of the new technology as we should? Fifteen or twenty years ago, it seemed that simulation offered great promise for management research, yet very little seems visible today. What if we could create models to play with the possibilities of open innovation — running systems to model how the value of knowledge can erode over time or leak away, or how it can multiply by links to other knowledge? What if we could play the erosion and leakage ideas against the genesis of new knowledge in extramural alliances, to give managers some sense of how much they should expect?
Once built, such a model might enable us to sample the ongoing changes in the environment, and the relationships, picking up on the financial volatility inherent in “creative destruction,” that new technologies and new business models bring.
How could we illustrate the value and risk involved in having demands for financial-services-like ROA visited upon manufacturing organizations (with inherently larger asset bases)? ROA can be boosted by increasing R, but often it’s been increased instead by reducing A: eliminating in-house manufacturing (and, often, the staff and skills that underpinned it) to achieve a shortterm boost, but at unknown cost to the underlying capability to run the business.
“Absorptive capacity,” the ability to understand and utilize new knowledge on the strength of prior capability, will suffer if those knowledge holders and their activities are eliminated. How far can a firm safely go, in dissolving old capabilities?
These are a few of the challenges that keep us awake. The flip side of these challenges for management are research opportunities for creative, advanced inquiries to address the uncertain future. This both comforts and excites us, because it shows there is a clear path to adding value for CIMS member firms.
Alden S. Bean