In Copyright - Non-Commercial Use Permitted Rights ... sharing of technologies among labs and business units – an elusive goal in most diversified corporations. Fewer companies,

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Insights

Publication Date: 1998

Permanent Link: https://doi.org/10.3929/ethz-a-004350911

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Aligning Technology Beliefs and Values:The Starting-Point of a Technology Vision

A decade ago, no job applicant with a freshly-minted MBA would have dared ask the interviewer to out-line his/her company’s vision. Nor would he/she have tried to probe the rationale behind the company'smission statement. Today, however, many will do so if given a chance, for employees increasingly wantto join companies with a strong sense of purpose, compelling values, and an articulated vision.

Today, technology is at the heart of a growing number of strategic and financial business decisions –and not just in so-called "tech-stocks". As a consequence, both scientists and technologists can beexpected to look increasingly for companies with an explicit vision concerning technology. Why do companies such as Cisco, 3M, Nokia, Corning, Pfizer, Bosch or DuPont stand out in the eyes of youngscientists and engineers? Undoubtedly because of their technological and business prowess and world-class R&D facilities. But this is probably not their sole attraction: the technology policies, values andbeliefs they espouse and promote as part of their vision arguably play a role in creating an attractiveR&D environment.

Hence the idea of extending your company's vision to the specific domain of technology may not appear so far-fetched, after all – particularly when technology is the company's main business driver.But surprisingly few companies seem to have explicitly defined their vision for technology!

What are the constituents of a technology vision?A company vision is composed of two intertwined facets, claim "visioning" specialists and scholars:• A "core ideology", stating what the company stands for re. its stakeholders, and the values it

believes in and promotes; and• A picture of an "envisioned future", highlighting a desirable future state of the company, and how it

wants to be perceived by its stakeholders.

Both are sometimes distilled into a short "mission statement" communicable to the outside world.The same applies to technology. Certain companies have, indeed, developed and adopted a number ofpolicies regarding technology that could be equated with a "core ideology". They have formulated a setof beliefs and values related to technology, and a guiding framework for its deployment and manage-ment. Every technical manager at 3M, for example, knows that the technologies he/she deploys belongto the corporation, and not to his/her business units. Everyone in 3M's technical community is thusexpected to endorse and practice the values derived from this belief: for example, the spontaneous,systematic sharing of technologies among labs and business units – an elusive goal in most diversifiedcorporations.Fewer companies, though, have gone further and outlined a proper vision regarding technology and the role it is supposed to play in their strategy. Cisco may be an exception. The company's vision – to become the preferred internet-enabling company and total solution-provider on the basis of its tech-nological product superiority – has rapidly been translated into a clear technology vision. The company’s

No. 8, July 2001

Insights

© Alliance for Technology-Based Enterprise

Alliance for Technology-Based Enterprise

1 See: Building Your Company's Vision, by James C. Collins and Jerry I. Porras in Harvard Business Review, September-October 1996, pp. 65 – 77.

Jean-PhilippeDeschamps

Professor of Technology and InnovationManagement at IMD InternationalInstitute for Management Development, Lausanne

Dipl. HEC (Paris);MBA INSEAD andHarvard BusinessSchool

management feels, however, that it will never be able to maintain technological leadership on the basisof its own resources alone; and that it must open up to the best and newest technologies, whereverthey come from. Cisco's vision has thus given birth to a "serial" technology acquisition strategy, feasibleat least as long as its high stock price allows. The company has learned how to select technology "targets" carefully, acquire them rapidly, and integrate them immediately. Its vision has been translateddirectly into action.

For the vast majority of companies, however, this "technology visioning" concept remains a remoteideal. King Electronics2 – a very large multinational company – was until a few years ago no exception.The company invested a couple of billion dollars annually in R&D. It had a large and well-known centralresearch organization, and was generally perceived as an innovator in its industries. Yet its businessmanagers occasionally questioned its technology investment policy and R&D management effectiven-ess, and King’s Divisional CTOs felt pressured by their business colleagues to show a clear return ontheir R&D investments. But they could not give convincing answers because they often disagreedamong themselves on their company’s technology policy and the management of its resources. The company was clearly in need of a more broadly-based consensus on its use of technology. The diversityof its businesses and technologies – compared to a focused company like Cisco – made it unrealistic totry to develop a single, unified vision of its technology future. However, an attempt to align the beliefsand values of its key managers regarding technology was fully warranted.

King’s Corporate CTO was convinced that his company needed a "technology charter", explicitly statingits policy on technology. This charter, he felt, would have to be discussed with and approved by hisbusiness colleagues to eliminate unproductive arguments. But he was also aware that he first neededto build agreement within his technology management community, before presenting such a charter tohis business colleagues for approval. The first questions he asked were:

• What should a technology charter cover? What issues should be included?• What process will lead to a consensus on a set of shared beliefs and policies?• Is it worth the effort?

Assessing current reality first

Any visioning process normally starts with the formulation of a desirable end-state – the vision. Thenmanagers are typically asked to contrast their vision with the company's current reality to identify thecritical changes to be introduced. King's CTO, however, chose the reverse approach. He felt the need tobegin with an inventory of the company's most urgent and common imperatives for changes in attitudesand behaviors regarding technology, before envisaging a desirable future for its technology function.Addressing the current reality therefore meant identifying the few common technology managementissues that cut across all divisions, irrespective of their technological intensity or business maturity.These issues conditioned the vision and the belief system that King's CTO wanted to create. One-to-one interviews with King’s Divisional CTOs and senior research managers, and subsequent collectivediscussions in King's "Technology Council" highlighted five such imperatives. These were felt to be sofundamental that they deserved to be written up in the preamble of the company's technology charter.

1. Building a greater sense of urgency at all levels (R&D and business management), for innovation andnew business creation. King's divisional CTOs were under constant pressure from their business colleagues for new technology-enabled product concepts. Clearly, technology couldn't be seen justas a means of supporting today's fast maturing businesses: it was expected to help create tomorrow'sbusinesses. This duality of purpose had to be managed more explicitly.

2. Developing a greater awareness in R&D for the market and for business considerations. At King, asin many companies, despite the decentralization of large parts of R&D in product divisions businessmanagers still felt that their R&D colleagues were too "techno-centric". Much needed to be done to

Much needed to be done to raise the market consciousness ofscientists andengineers

2 Name disguised 3 Chief Technology Officers

raise the market consciousness of King's scientists and engineers, and this would require considerablymore exposure to customers and management considerations.

3. Helping business leaders increase their technology awareness and understanding for the more effec-tive linking of business and technology strategy. If King's business managers often complained abouttheir technical colleagues' limited understanding of business realities, the reverse was also true.Senior developers often regretted their business colleagues' lack of interest in and knowledge oftechnology. "We need to educate them on what technology can do for us" was a frequent comment.

4. Extending the scale and scope of external partnerships and alliances to access and exploit new technologies and markets. Like many technology-rooted companies, King had always relied on its own R&D capabilities for new products and processes. Business managers often accused their R&Dcolleagues of "reinventing the wheel". However, the proliferation of new technologies from all sourcesmade that urge for self-sufficiency very risky and costly. King clearly had to learn to "buy" technology.

5. Stressing the strategic roles of research and technology officers rather than their operational role in,for example, managing R&D labs. Despite belonging to the top management team of their business,King's Divisional CTOs often felt excluded from important strategic business decisions. To be consi-dered fully-fledged business partners they clearly needed to shift their priorities from the manage-ment of R&D labs to helping the business anticipate and address its strategic technology issues.

King's Divisional CTOs had no problem agreeing with these priorities when they emerged during a"Technology Council" meeting. But agreeing on the priorities was probably the easiest part of the challenge. King's senior technology and research managers now needed to iron out their differences ofopinion as to what the company should put forward as its "technology values and beliefs". This was thedifficult part of the exercise, but King – a pioneer in that domain – was determined to go ahead.

Establishing a set of common technology beliefs and values

Aligning divergent views on a common set of shared beliefs was indeed a challenge. Numerous pointsof contention reflected deeply ingrained beliefs and values regarding technology. Interviews with King'sCTOs and senior research officers identified five areas for which a common position needed formulation.Each area could be expressed in the form of specific belief statements, which, once agreed upon, woulddelineate the key dimensions of King’s technology charter.

The first area of beliefs dealt with the fundamental role of technology in business success, and thenature of the company’s innovation challenge.Common agreement was needed on:• The respective roles of proprietary vs. non-proprietary/outsourced technologies;• The relative importance of technology forecasting vs. market sensing;• The rules concerning technology ownership, usage and accountability; and• The proper time horizon for the company's technology investments.

The second area of beliefs dealt with the strategic management of technology and the role of ChiefResearch or Technology Officers.At issue were questions regarding:• The appropriate level of enforcement of technology synergy across businesses;• The corporate policy regarding technology outsourcing, partnering or venturing;• The role of CTOs as business "supporters" vs. new business "creators"; and• The powers and intervention authority of CTOs and senior research officers.

The third area of beliefs dealt with the particular role, function or mission of the central research organization.King's CTOs – not just its research managers – had to make explicit and endorse:

We need to educate them on what technologycan do for us.

• The contribution of Research and the "appropriate" level of R&D decentralization;• The role of Research in the development of new competencies and new businesses;• The mission of Research in searching for, developing and transferring talent;• The attitude of Research regarding technologies that do not correspond to business priorities.

The fourth area of beliefs dealt with the internal organization of Research, its funding and the evaluation of its output.Similarly, King's CTOs and research managers had to build a common position on:• The merits of organizing Research along the lines of "disciplines" vs. "technology platforms";• The relative importance of corporate vs. business unit funding of Research;• The desirability/feasibility of measuring Research's output in terms of value created;• The policy regarding "sub-critical" and peripheral research activities.

Finally, the fifth area of beliefs dealt with the management of human resources in technology, fromhiring and performance evaluation to career management.Again, a common agreement was needed on:• The preferred profile and breadth of skills of incoming scientists and engineers;• The rotation of scientists between Research and business development centers;• The level of involvement of R&D leaders in strategic business management issues;• The focus of R&D staff evaluation (quality/timing of output or business success?).

King's Corporate CTO decided that he could not impose his own personal vision and beliefs regardingthese issues on his colleagues, as this would be inconceivable in King's highly consensual company culture. So he assembled his Divisional CTOs and senior research officers for a two-day visioningworkshop at an off-site location. For the first time in many years, King's senior technology leaders hadthe time to mull over such policy issues and debate them until a consensus emerged. On some points,though by far not all, a common viewpoint developed relatively rapidly. On others, however, there was a scattering of opinion right across the spectrum. The divergent perspectives reflected different careerhistories and business exposure, and some discussions were at times conducted at high emotionallevels, particularly when the more business-oriented Divisional CTOs were pitched against their Corporate Research peers. After all, what was under scrutiny was the essence and "raison d'être" of the organizations concerned and their endeavors. What is the role of Research in our company? Whatkind of people are we looking for? What is our contribution to the business? How do we accept beingevaluated?

The main challenge in this type of exercise is to resist the temptation of "sitting on the fence" andvoting ambiguously for a compromise between the two extremes in each of the alternatives proposed. The fact that other successful companies had taken unambiguous positions on either side of the dilemma helped: King's senior technology managers had no choice but to do so as well, and be prepared to defend this to their business colleagues.

In all visioning exercises, the process undergone is ultimately more important than the content of thevision reached. Confronting their beliefs in an honest attempt to reach a consensus reinforced thecohesion of the group, and gave King's Corporate CTO a deep understanding of the values pervading his team.

The workshop ended with the drafting of a one-page "technology charter" (a term that was preferred to"vision"). In essence, it was an extended "mission statement" for technology, crafted word by word, asdiplomats would do for a sensitive international treaty. It comprised the fundamental beliefs underlyingKing's technology vision and the policies it was prepared to endorse. The document was ready to besubmitted to King's business managers for approval, and it was felt that once approved it would greatlyfacilitate the dialogue between technology and business managers.

Insights originates from the joint work of professors from the two Swiss Federal Institutes of Technology and IMD. Insights is published three times each year, distributed free of charge and is also available on the Internet at www.ctm.ethz.ch

Alliance for Technology-BasedEnterprise

CTMZeltweg 48 - CH 8032 ZurichPhone: +41 1 632 59 29Fax: +41 1 269 90 01 Email: [email protected]: www.ctm.ethz.ch

In all visioning exercises, the process undergoneis ultimately moreimportant than thecontent of the visionreached.