Preface

R&D teams in the twenty-first century will work on complex problems that require the input of a variety of disciplines, and often involve collaboration among specialists located on different continents. Add the business dimensions of marketing, finance, design, production, and legal assistance, and the management of research, development, and innovation is clearly demanding. Even in the past, R&D professionals rarely were "managed" the way most people think of management. In fact, when asked, "How do you manage research conducted by the many faculty members and staff in your school?" a dean at Harvard replied, "We don't." He asked, "Have you ever tried to manage prima donnas?"

Managing R&D organizations and focusing on their productivity and excellence presents unique problems and unusual challenges that are amplified when the team is dispersed. This uniqueness stems from two basic reasons: (1) the character of the enterprise, and (2) the type of people involved in R&D.

In the past several decades the manufacturing-based industrial society that emerged in the nineteenth century has been transformed into an informational society, and a knowledge economy. As the Nobel Laureate Ken Arrow noted, "The central economic fact about the processes of invention and research is that they are devoted to the production of information" (Arrow, 1974, p. 152). The generation of information requires research; therefore, research is going to be one of the most important jobs in the society of the future. Just as farmers in preindustrial society were central players, particularly in periods of famine, so the researchers will be the central players in the future, especially in the advanced industrialized economies.

In addition to the R&D organizations' focus on information, the work itself involves considerable uncertainty since the output can never be predicted perfectly from the various inputs used. Ken Arrow stated "even human consciousness itself would disappear in the absence of uncertainty" (Arrow, 1974, p. I). Uncertainty, therefore, gives R&D enterprises a unique quality, and people involved in research and development have some unique characteristics. The obvious ones are postgraduate training and high aptitude. Perhaps, more importantly, people working in R&D have been socialized differently from others. This process occurred during their graduate training, since in order to do well they had to work autonomously and show some initiative and curiosity. To some degree it was a self-selection process.

Commenting on managing R&D organizations, an eminent R&D manager (Keith Williams, Industrial Fellow, Churchill College) stated, "It is more difficult to manage R&D organizations because of the nature of their activities and people involved-mostly the people. People are more independent and articulate ... so they need to be handled differently."

How differently? Well as an example, a progressive manager would be well advised to use few sticks and every available carrot. Also, accepting "odd" behavior and granting considerable autonomy to the researcher are highly desirable. In Chapter 3 we discuss the Amadeus complex, which reminds us that genius is associated with behaviors that some people would call immature. The R&D manager has to learn to tolerate a broad range of behavior from subordinates and colleagues. In managing an R&D organization, one also has to understand the ethos of a scientific community with its focus on universalism and sharing of scientific knowledge. Managing an R&D organization, then, is essentially the art of integrating the efforts of diverse, creative, intelligent, and autonomous individuals. Paraphrasing John D. Rockefeller, Jr., good management consists of showing superior people how to do the work of near-geniuses.

WHY SUCH A BOOK?

This book, as the reader will see from the background of the authors, is a collaboration between an engineer/scientist, a social and organizational psychologist, and a management educator and scholar with a background in science.

Besides the interest and experience of the authors in R&D, which encompasses managing and directing significant R&D programs, teaching, and writing about many technical, social, and behavioral issues related to organizations, we feel R&D is a very important activity of a modern technological society. For R&D, the United States alone spent over $350 billion in 2007. The important role R&D plays in the effectiveness of technological innovation, in the profitability of a business enterprise, and in the economic well-being of a nation, can hardly be overstated. These and other related science policy issues are explored more fully in the book.

Much has been written recently about this country's loss of competitiveness. Most of this loss can be traced to the spending pattern of R&D funds, and the ability to create social and economic value from R&D investment. No one questions the importance of national defense. The question is: Is the United States carrying a disproportionate share of this burden? Thus, a word about our science policy in a book discussing the management of R&D is in order. The managers of R&D must influence science policy and redirect it in the twenty-first century.

With the end of the Cold war, the need for major defense expenditures is somewhat lower than it has been. Yet increased global competitiveness requires even more efficient operations, and the development of such operations requires research. R&D is a major component required for survival in the world of global economic competition.

There is evidence (Nadiri, 1980; NAS-NAE, 2006) that return on R&D investment in industry is higher than on other activities. Some studies showed that the average return on this investment is 30 to 1. Furthermore, there is evidence that technology stimulates science (Bondi, 1967), science stimulates technology (Gibbons and Johnston, 1974), and both stimulate the economy (Freeman, 1982). A few conclusions about R&D funding and researchers' productivity are worth stating at the outset:

Looking ahead, U.S. industry will have to continue developing products and systems for the global industrial society. The unified European market, the North American market, and the Asian market together will form a world market of over four billion people interested in products and systems that current R&D might develop. Corporations that sell only in the United States will be at a disadvantage, because they will be dividing their R&D costs with only 300 million instead of 4 billion potential customers.

To design a product or a system for a global industrial society, however, will require familiarity with the needs of the customers and, in turn, will require a much broader cross-cultural education. People working in R&D will also need a global perspective on research and innovation and the ability to organize and manage commercialization activities for international markets.

This book has resulted from the experiences of the authors in actually managing R&D organizations, teaching courses in R&D management, and conducting research in theories of management, cross-cultural organizational psychology, and organization psychology. Many of the topics are evolving, as new research brings in new theoretical perspectives. Knowing the needs of physical scientists and engineers for practical suggestions, rather than reviewing the pros and cons of various theories, we used our best judgment of what constitutes the most appropriate answer to a theoretical controversy, rather than burden the reader with such controversies. This means that some managers and scholars in the field may disagree with some of our positions, but that is inevitable in a fast-changing field where precise answers are rarely available.

FOR WHOM IS THIS BOOK?

This book focuses on ways one can improve R&D organization productivity and foster excellence in such organizations. Thus, it is written for (a) principal investigators (P.I.s) and their colleagues and supervisors in research and development organizations, and (b) faculty members, department heads, and research administrators at academic institutions. While the profile of such individuals frequently includes a PhD in a physical, biological, or social science or engineering, whatever they learned in behavioral science courses they took has long since been forgotten. Basically, they have been given the job of managing people without much training in how to do this. We assume that individuals in such a role will want to have a short, easily accessible guide to the literature on the best way to manage a research enterprise or a small research group.

Since the first and second editions of the book were also used for courses related to R&D management; this third edition has been augmented with new chapters and new topics to make it more useful as a text. Much of the original inspiration concerning what topics to cover in the book came from a needs assessment that David Day and Harry Triandis, of the University of Illinois, Urbana-Champaign, carried out in R. K. Jain's laboratory. Over a period of several months, they spoke to groups of P.I.s about their management problems in order to assess what they needed to know. Although these P.I.s did not want to become social psychologists or organizational theorists, they expressed a need to learn something about the behavioral sciences. The needs assessment determined that topics such as how to resolve conflicts, how to change attitudes, how to motivate subordinates, how to design the best work environment, how to make decisions about priorities, and leadership theory were of the greatest concern and probable utility to the P.I.s.

In addition, R. K. Jain, as supervisor of many P.I.s, noted that they would do their job better and get more funds to support their research if they had a broader perspective about science policy. So, in addition to the "micro" topics identified in the needs assessment, we have included some "macro" topics that will help the P.I.s in their search for research funding. University experience as a research dean and a dean (R. K. Jain), research related to diversity and cross-cultural issues (H. C. Triandis), and research related to technological innovation (Cynthia Wagner Weick) provided a stimulus for including chapters focusing on these topics.

In writing this book we have kept principal investigators in mind. However, there are others—for example, university department heads and research administrators, consulting engineers, managers responsible for sponsoring research, and policy-makers concerned with science and technology—who should find the information presented here of interest. Some reviewers suggested that the book provides information that is quite relevant and useful to all managers of creative and rather autonomous personnel.

We will cover some topics that will already be familiar to some readers. To help the reader go through the book most efficiently and skip sections in the book of insufficient interest, we provide an introduction and a summary at the beginning and end of each chapter.

In writing this book we thought of it as opening doors for further study and discussion. Consequently, at the end of each chapter, we have provided a list of Questions for Class Discussion. The list of questions can be used for paper topics, group projects, or homework assignments, as well as for developing case studies related to R&D organizations.

WHAT THE BOOK IS ALL ABOUT

Managing research, development (R&D), and innovation in organization is to a great degree the art of coordinating and integrating the efforts of highly trained and rather autonomous participants. The manager has to provide order, purpose, and foresight and do this while dealing intelligently with the uncertainty inherent in an R&D enterprise. It is hoped that discussions and ideas presented in this book focus on ways one can improve the productivity of R&D organizations and foster excellence and innovation in such organizations. Based on needs assessment and the experience of the authors, topics that we thought to be most helpful to R&D managers and their colleagues, have been covered. As the book outline shows, the topics range from the motivation of individuals to science policy.

The first and second editions of this book were well received, but the literature that was covered in the second edition included material only through 1997. In this third edition we have incorporated literature to 2009. In addition, the organizations that describe R&D activities in various countries issue new reports almost every year. This third edition utilizes the most recent reports on the status of R&D activities in many parts of the world.

In the second edition we added chapters on diversity in R&D organizations, and emphasized management of increasingly specialized and heterogeneous teams, which are often spread across continents. In that edition we also added chapters on the university research enterprise and strategic planning, and included a discussion of science policy in the Appendix. These topics surely remain important today. In this third edition, we have updated all chapters to reflect contemporary thinking. We have, however, also added chapters, which provide additional insight into creating value from R&D activities, that is, the process of innovation. In particular, a chapter has been added on the management challenges associated with incremental innovation as well as radical innovation. Another new chapter addresses management of the open and global network of technological innovation, and focuses on the interrelationships among R&D institutions in the commercial, government and academic realms.

Chapter 1 develops a typology of R&D activities and the people who engage in them. What is research and development and what is unique about managing R&D organizations are discussed. A section examines the question. What to research? To some extent this is a key question for an R&D manager and for the organization.

Chapter 2 covers basic elements needed for an R&D organization: people, ideas, and funds. It examines communication networks and the innovation process. The discussion of the R&D organizational culture includes avoiding the "not-invented-here syndrome," fit of the person and the job, and managing antithesis and ambiguity. The discussion has implications for the selection of people in R&D organizations and the shaping of the culture of such organizations.

The key role for a manager is to create a productive and effective R&D organization, which is the topic of Chapter 3. We ask questions such as, What is organizational effectiveness? Who are the inventors and innovators? How are new ideas generated? Formation of the teams and the ethos of a scientific community that are likely to result in an effective organization are discussed.

Chapter 4 focuses on the design of jobs, careers, and organizational hierarchies and on keeping researchers as innovative as possible throughout their careers. Chapter 5 covers influencing people, peoples' attitude, and how attitudes can be changed. A behavioral science case and its analysis are also presented. Chapter 6 examines what is relevant about human motivation, with special emphasis on rewards, communication, and social and organizational structures that are likely to motivate R&D personnel. It also examines how to develop a sense of control and community for a research organization.

We have added Chapter 7 in response to the need for a better understanding of how to deal with diversity in a global society. Joint research projects with scientists who are different in culture, gender, discipline, organization level, and function are becoming more common than ever before. As research organizations become culturally diverse, there is a greater need for dealing with this diversity.

Leadership is the topic of Chapter 8. We examine a number of theories of leadership and the leadership styles that are likely to be effective in R&D organizations. Chapter 9 provides a discussion of conflict in organizations. Three kinds of conflict (within a person, between individuals, and between groups) are discussed. Conflict is not always undesirable. There is productive as well as destructive conflict. We explore how to take advantage of productive conflict, how to reduce destructive conflict, and the ethics that are likely to achieve such ends in R&D organizations.

Chapter 10 is on performance appraisal. We make suggestions concerning how to successfully structure a performance appraisal system in R&D organizations. To do that, the discussion takes into account the different goals and activities of scientists and engineers. Monetary rewards, status, and other rewards can be associated with the results of the appraisal, but some of the dangers of too close a connection between appraisal and monetary rewards are also explored. A performance appraisal implementation strategy and examples of performance appraisal systems at research organizations are presented.

To be effective, an R&D organization must also be successful in technology transfer, which is the subject of Chapter 11. We ask, What are the stages of such transfer? What factors affect technology transfer? What is the optimal strategy for such transfer?

Chapter 12 addresses the strategic, operational and managerial approaches appropriate to incremental and radical innovation. Innovation processes, and the roles of the market and marketers, are highlighted. Issues relevant to leading innovative organizations are also discussed.

Chapter 13 provides the manager with an overview of organizational change, what goes on in organizational change, and how to evaluate it.

Technological innovation is increasingly accomplished throughout a global network. Chapter 14 focuses on managing the various interrelationships among companies, the government and universities. The concepts of open innovation and regional clusters are also addressed.

Chapter 15 focuses on the university research enterprise. Issues ranging from the basis for the university research activities and key roles of the academic institutions in the innovation process are discussed.

Strategic planning has become an important consideration for industrial and academic organizations with major research and development components. Various strategic planning elements unique to an R&D organization are presented in Chapter 16. A process useful in creating and implementing strategy is also provided.

Finally, Chapter 17 provides a discussion of research and development and society as well as issues important for developing science policy. It examines R&D expenditures and their effect on economic development. A discussion of the need and the level of resource allocation for basic research is included.

CONFESSIONS AND ACKNOWLEDGMENTS

When all is said and done, this completed work has many shortcomings. In other words, reality sets in. One could argue that there is not much here that has not already occurred to, or been postulated by, others. We hope our attempt to integrate and formalize some of the concepts will be of value to our readers.

Many of the concepts discussed here were developed during Jain's stay as a Fellow at Churchill College, Cambridge University, a distinct honor and a memorable experience.

Many of the cases that appear in this book were developed by Harry Triandis and David Day, both of the University of Illinois, Urbana-Champaign, in the course of a training needs assessment at Jain's laboratory, organized and directed by David Day. The cases have been distorted, exaggerated, and changed sufficiently so that no one can recognize the players, least of all Jain!

We benefited immensely from the review of the manuscript and interaction with the following colleagues and eminent managers of R&D organizations: Sir Hermann Bondi, Master, Churchill College, Cambridge University; Mr. Keith Williams, Industrial Fellow Commoner, Churchill College (formerly of Shell International Petroleum); the Rt. Hon. Aubrey Jones, Industrial Fellow Commoner, Churchill College (former Minister in the British government and author of many books); Sir William Hawthorne, former Master, Churchill College, Cambridge University and former Hunsaker Professor of Aeronautical Engineering at MIT; Professor David Day, Industrial and Labor Relations, University of Illinois, Urbana-Champaign; Professor David Marks, Professor and Department Head, Civil Engineering, Massachusetts Institute of Technology (MIT); Professor Andrew Schofield, Engineering Department, Cambridge University.

We are grateful to Pola Triandis, who improved the writing style of the book by meticulously editing the entire manuscript, to graduate students and to research associates: Jordan Geiman, Alexis Scoufos, Veronica Ensiso, and Kaben Kramer for conducting background research and for preparing figures and tables for the manuscript and to Mickie Sundberg and Deanna Henricksen for their assistance with the manuscript.

Many individuals at John Wiley & Sons were most generous with their assistance in finalizing the manuscript and producing the text. Working with Bob Argentieri, editor, Wiley, Professional and Trade Division, was a pleasure; he tactfully provided many critical comments to improve the manuscript. Personal attention provided to this project by Bob Argentieri and his staff made the crucial difference in effectively completing this long, demanding, and exciting journey and in finally producing a published volume.

Although the assistance and support provided by our organizations and colleagues are gratefully acknowledged, the responsibility for what is presented in the book is solely that of the authors.

Ravi K. Jain

Harry C. Triandis

Cynthia Wagner Weick

Stockton, California

Urbana, Illinois