Human Resources Processes

• Organizational Structures for Innovation Organizations
  • Design Considerations for Organizational Structures
  • Generalized Individual and Team Roles in Technical Organizations
  • Dual Technology and Management Ladders
  • Mentors of Mavericks (MOM’s)
  • Detailed Role Responsibilities and Accountabilities in Technical Organizations
  • Span of Control for Managers
• Assessment Tools for Innovation Organizations
  • Myers-Briggs Assessments
  • KAI Assessments
  • Identifying Potentially Prolific Inventors
  • Identifying Commitment Behavior in Technical Organizations
  • Matching Work to Individual Interests and Capabilities
  • Assessing Believability via Radical Truthfulness and Transparency
• Personnel Management Practices for Innovation Organizations
  • Skill Requirements in Technical Organizations
  • Inventor Incentive Programs
  • Communication Tools for Innovative Organizations
  • Personnel Retention
  • Salary Policy
  • New Employee Training
  • Downsizing
• Sources, References and Selected Bibliographic Information

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Organizational Structures for Innovation Organizations

Designing organizational structures that support innovation is a challenge, especially as organizations grow larger with success. A good underlying tenant by which to design innovation organizations is always to remember the anonymous quote that “the amount a person uses their imagination is inversely proportional to the amount of punishment they will receive for using it”. Thus good innovation organizations work hard to remove constraints on human behavior. Exceptional senior leader performance is achieved when an organization is held at a dynamic equilibrium just below the breaking point at which diversity and free thought overwhelms structured productive work processes.

Design Considerations for Organizational Structures

There are a variety of ways, shown in the Organizational Design Options” figure, in which people can organize to create successful societies, communities and organizations. When designing the organizational structure for innovation organizations the “7S” model provides an overall framework to think through that design. This is shown in the “7S” figure. Note that from a thinking process there are multiplicities of factors that powerfully influence overall organization effectiveness. These factors are interdependent; managers must search for a constantly evolving fit. Finally, a change in one element is likely to set up changes and reactions in all the other elements of the organization. Therefore, managers must take a total systems approach to the implementation of new strategies. This complexity is what makes organizational designs challenging. Descriptions of the components of the 7S model are:

• STRATEGY: the ways in which competitive advantage will be achieved.
• STRUCTURE: the way in which tasks and people are divided. The basic grouping of activities and reporting relationships. The primary basis for specialization and integration.
• SYSTEMS: formal systems and procedures including management control systems, performance measurement and reward systems, budgeting systems, information systems, planning systems, and capital budgeting systems .
• STYLE: the leadership style of both top management in the overall operating style of the organization. It reflects the norms people act on and how they work and interact with each other and with customers/stakeholders.
• STAFFING: people and their backgrounds and competencies. At its most basic, it is who wins in the many competitions for leadership positions. Includes approaches to recruitment, selection, socialization; how managers are developed; how young recruits are trained, socialized, and integrated; and career management.
• SKILLS: the basic competencies that reside in the organization. Can be distinctive competencies of people, management practices, technology, etc.
• SHARED VALUES: the guiding concepts and fundamental ideas around which the company is built. They focus attention and give purpose and meaning to the organization. Usually these values are simple and may even seem trivial from the outside. But they have great meaning in guiding behaviors within the company.

A caution when using this model is that managers are most familiar, and most inclined to attempt to use, and implement strategy and improve organizational effectiveness by relying on the “harder and more tangible” elements of the model. These elements are strategy, structure, and systems. However a study of companies (that were the highest performers in their industries) revealed that their General Managers payed far more attention to the “softer” elements, versus their counterparts in less successful competitive firms. These elements are style, staffing, skills, and shared values.

Organizations Go Through Their Own Stages of Growth

It is also important to note that just like technologies and markets, organizations go through their own stages of growth. This can be shown in “The Five Phases of Growth” figure. This model shows the various crises that develop during the growth cycles, and the organization leadership challenges that have to be met for growth to continue. Although one is tempted to think of technical organizations working only at the lower left portion of the growth curve, this is not true. Technical organizations, as they grow larger in big organizations, also go through each of the five phases.

To develop a vital organization of people capable of implementing and reformulating business strategy an ongoing human resource management system has to be in place. The HR system will constantly diagnose the human resource system, develop a revised vision of the organization and people needed, develop accountability for human resource management by surfacing normally hidden information, and make ongoing strategic and tactical human resource planning a management development experience.

Generalized Individual and Team Roles in Technical Organizations

Roles in technical organizations have been designed along the traditional hierarchy of entry-level positions up through the CTO or VP of R&D. Responsibility and accountability increases as one moves up this management ladder. This is shown in the typical “Job Level Ladder” figure. Span of control and participation in the two main areas of management (operations and strategic planning) also increases is one moves up the ladder.

It has been found that decision quality, timeliness and productivity increase if different management teams are constructed to deal with each of the two main areas of technology management. The team to manage the operations and site of a laboratory or unit is distinct in concept from a team which conducts the strategic planning and project selection of the unit. The best individuals capable of making a high-quality, timely, and in hindsight correct decision, are those selected for participation on each of these two management teams. Evaluating a person’s “believability” for making decisions in each of these categories is a good selection criterion. This is based on Ray Dalio’s book, “Principles”.

Team Roles in Technical Organizations

Consistent with Margaret Wheatley’s research on designing organizations around information flows, the leadership activities in innovation organizations can be divided into eight categories each supported by a leadership team comprised of those individuals in the organization with the highest “believability” (or demonstrated competence and motivation) in that leadership area. These teams are shown in the “Leadership Team Model” figure. Each team has a clear and focused purpose, as well as a metric on which to evaluate their leadership performance. As the overall organization changes in its composition and as individuals join and leave, as well as individuals in the organization grow and wain in their “believability” in different leadership areas, the leadership teams composition changes so that at all times the strongest people comprise each individual leadership team.

Dual Technology and Management Ladders

Many technical organizations have found it an advantage to create dual promotional ladders. This allows increasing competence and expertise the technical areas to be recognized. Recognition takes the form of salary, bonuses, stock options and other means of recognition. In 2017 the Industrial Research Institute conducted a survey and found that in large organizations, mostly in the chemical industry, the technical ladder is comprised between five and eight rungs (see the “Number of Ladder Rungs” figure). This is consistent with the entry-level to senior traditional management hierarchy in such an organization.

Senior R&D Technical Job Titles

Typically the titles used on the technical latter are distinct for each rung, as was the salary grade. The title for each salary grade is distinct so that a clear progression path is visible to the employee. Salary grades are established by HR consulting research such as Mercer and/or Hewitt, etc. and vary regionally based on the market. For the most senior technical staff the most frequently used title was “Fellow”, see “The Most Senior Technical Ladder Title” figure.

Example R&D Job Titles and Level Descriptions

For a technical ladder comprising seven rungs, the role characteristics taken from a chemical industry example, are described below. As a person moves up the rungs, the amount of experience typically available increases as does the typical length of the projects or tasks assigned to that individual. Likewise a person’s project skill level increases, from running simple projects to running complex platform programs that are key to the organization’s sustained business success. Also key is the ability to lead others, which increases as one moves-up the ladder. Example Job Titles and Level Descriptions follow:

Level 1 – Chemist, physicist, engineer, etc.

GENERAL: This is an apprenticeship period, with the incumbent progressively developing his or her professional maturity, judgment, and experience. For the person who continues to develop this period would cover the first few years beyond the bachelor’s degree.
TECHNICAL DIRECTION RECEIVED: detailed
TECHNICAL DIRECTION GIVEN: they give general technical direction to several nonprofessional personnel.
ADMINISTRATIVE RESPONSIBILITY: none.
SCOPE: seek solutions to technical problems. Work may range from the use of defined methods to exercising some degree of technical judgment.

Level 2 – Research chemist, physicist, etc.

GENERAL: At this stage, the engineer or scientist is working at a professional level and could be termed a journeyman in his or her field. Responsibilities are likely to encompass a project and the person receives general supervision from more senior professionals. May be directing one or more technical personnel who are Level 1 as well as some non-professional assistants.
TECHNICAL DIRECTION RECEIVED: works with little or no technical guidance.
TECHNICAL DIRECTION GIVEN: may give technical direction to a group of professional or nonprofessional personnel.
ADMINISTRATIVE RESPONSIBILITIES: minimal.
SCOPE: plans and executes technical programs within his or her area of specialty; expected to initiate new projects within an existing program.

Level 3T – Senior research chemist, physicist, etc.

GENERAL: This level is characterized by concentration in technical or specific specialty leading to recognition within the company, or the profession, on the basis of technical competence.
TECHNICAL DIRECTION RECEIVED: works with little or no technical guidance.
TECHNICAL DIRECTION GIVEN: may give technical direction to a group of professional or nonprofessional personnel.
ADMINISTRATIVE RESPONSIBILITIES: minimal
SCOPE: plans and executes technical programs within his or her area of specialty; expected to initiate new projects within an existing program.

Level 3A – Group leader

GENERAL: this level involves technical supervision with responsibility covering several projects and a considerable area of classical supervisory problems. Level 3A is normally considered to be the first line management or supervision.
TECHNICAL DIRECTION RECEIVED: receives general technical guidance from Level 4A
TECHNICAL DIRECTION GIVEN: gives technical direction to the lowest organizational entity which normally consists of 1 to 30 professional and nonprofessional personnel. Such direction includes planning, scheduling, and assignment of work within a program area.
ADMINISTRATIVE RESPONSIBILITIES: normally spends 10 to 50% of his or her time on administrative responsibilities. Implements safety, security, and disciplinary policies. Interviews and makes recommendations to hire, transfer, and/or terminate personnel. Responsible for the orientation and development of personnel. Review’s performance and recommends adjustment in compensation.
SCOPE: participates in and pursues patents and other intellectual property. Assists in the preparation, editing, and approval of project reports. Prepares periodic progress reports to higher management. May participate in planning and administrating the budget. Originates, initiates, and tracks new projects within an approved program area.

Level 4T – research associate

GENERAL: the technical specialist exhibits superior scientific proficiency and is a recognized expert in his or her field. He or she would have minimum administrative responsibilities; be expected to perform advanced studies and to give technical guidance to others in the organization.
TECHNICAL DIRECTION RECEIVED: capable of independent work including initiation, planning, and execution of abroad program assignments with no professional guidance.
TECHNICAL DIRECTION GIVEN: may have technical responsibility for those working with him or her in his or her field or specialization.
ADMINISTRATIVE RESPONSIBILITIES: minimal
SCOPE: conducts independent research and investigations to define and develop the functional theory about proposed product or process. Conceives and expands theories pertaining to new applications of existing products and/or processes along with the modification of product and/or processes in order to broaden the scope and application. Invents and designs complex products and processes and may assist in engineering these into production. Analyzes and evaluates the scope and objective of inventive ideas.

Level 4A – section manager

GENERAL: this level is normally considered to be the second line management or supervision with responsibility for substantial technical activity.
TECHNICAL DIRECTION RECEIVED: minimal
TECHNICAL DIRECTION GIVEN: gives technical direction to one or more organizations, entities, or professional and nonprofessional personnel (normally in excess of 25 people). Such activity includes the planning, implementing, coordinating, and interpreting of one or more technical platforms.
ADMINISTRATIVE RESPONSIBILITIES: normally spends 20 to 60% of his or her time on administrative duties. Responsible for safety, security, and disciplinary action. Initiates action to hire, compensate, transfer, and terminate personnel. Responsible for appraising, counseling, orienting, and developing lower levels.
SCOPE: establishes program objectives in line with company’s interests. Establishes budget for approval by higher management and controls expenditures within the approved budget. Originates and initiates new program areas. Responsible for inter-and intra-company liaison. Participates in the formulation, interpretation, transmission, and administration of research and development policy and actions. Participates in patent decisions. Reviews and communicates technical programs to higher management. Conceives and recommends new programs to broaden the product or process application, modifies the existing product or process, and creates entirely new products or processes.

Level 5T and Level 5A – Senior research associate and department head, lab directors, etc.

GENERAL: in order to emphasize personnel can and do attain growth beyond that of level 4T or 4A, this level would include those personnel who have demonstrated outstanding technical excellence and normally have received national or international recognition for their contributions. The stature of this level is comparable to that of the top research and development management function. He or she covers a wide organizational span for his or her contributions and can affect not only top research and development management, but also corporate management. The duties of this level are primarily that of a consulting an independent research nature coupled with broad latitude for the selection of programs.

Summary of R&D Roles, Job Descriptions, and Experience Required

The above descriptions are summarized in the “Role Summary” figure. Increasing education and business experience play the biggest part in determining what organizational role most individuals reach. With that increased wisdom the leadership activities of the role also increase as an individual moves up the ladder.

Technical Thought or Mental Processing Capabilities

Also affecting an individual’s movement up the ladder over time is the mental capability of each individual. Over time mental capability increases and shows up in the higher rungs of the ladder as shown in the “Technical Thought Processing Capabilities” figures. The mental capability was described in Chapter 9 and is based upon the principles of Executive Leadership written by Elliott Jaques.

With respect to the seven levels of a technical ladder for typical chemical companies, the thought processing capability and technical skill level definitions are extremely important. They are needed to understand and accurately place individuals on this “Technical Thought Processing Capabilities” matrix so that human resource planning as described in Chapter 9 and strategic business and technology planning as described in Chapters 6 and 7 can be productively accomplished.

Characteristics Common to All Roles in a Technology Organization

Finally there are characteristics common to all roles in the technology organization, as shown in the “Common Role Characteristics” figure.

Mentors of Mavericks (MOM’s)

Another category or role needed in Technical Organizations was uncovered by a group at Kimberly Clarke Corporation and since defined and embellished further by Lanny Vincent. This role has to do with the nature and nurture of parenting innovations. What Lanny articulated is that innovators need to be more playful, and the need a protected environment in which to do so. It is important to allow innovations the development benefits of Play, and not cut them short by prematurely requiring certain levels of performance from them. This is where the agile or lean product development process gains its strength, i.e. by rapidly going through evolutions of playful product development versus the waterfalls of the stage gate process.

MOMs, or “Mentors of Mavericks” are often an ignored but necessary role frequently missing in established companies seeking to innovate. Without a competent and present MOM, not to be confused with the sponsor who is also necessary, innovations don’t receive the insulation from the “adult performance oriented world” of the “established revenue stream managers”. MOMs and Innovation Midwives enable holding, hugging, and talking that allows for set-based concurrent engineering so effectively used by Toyota’s knowledge based product development philosophy (see Michael Kennedy’s book “Product Development For The Lean Enterprise”). One of the major tasks in which Innovation Midwives or MOMs need to be diligent, is honoring the core. If managers of established revenue streams feel in any way a competitive threat for resources coming from within the organization they will consciously and often unconsciously work against innovation. This concept is also been described in detail in The Innovators Dilemma by Clayton Christensen.

MOMs are often senior technical people residing on the technical side of the dual ladder management structure. In this role they often have the credibility to mentor young scientists and engineers with new maverick ideas. They can counsel them, in a nonthreatening way, on the best way to build their ideas and shepherd them through the organization in a way that stays below the radar until the idea is truly ready to be presented to management. If an idea is discovered prematurely, the MOMs also have the organizational credibility to obtain needed resources to test out an unusual idea that they think has merit. This requires that senior technical ladder personnel also be generative in their behavior. This is not always the case as some of them develop large egos. Generative and supportive research fellows who also are good MOMs should be well compensated and supported within the organization.

A good CTO or technical director can also be a MOM. This is typically not the case however as these individuals are often viewed by young scientists is unapproachable. In smaller organizations however this may not be the case, or in startup organizations where the culture is truly collaborative and learning valued.

Detailed Role Responsibilities and Accountabilities in Technical Organizations

For an organization to be productive the roles of technical and management personnel need to be well defined and understood by all. The principles by which roles are defined are typically twofold. They are:

1. Define the roles of the technical organization so as to create an efficient responsive team, and
2. Define roles in a way that provides guidelines and not rigid boundaries.

The specific characteristics of each role can be clarified by using the following attributes:

(HB) is Have Ball. When a role “Has the Ball”, that role is the task manager or leader that is accountable for seeing that the task is fulfilled.
(A) is Advise. When a role is an Advisor it is asked to participate in the task to provide guidance (responsible to participate) but it is not the driver (accountable) for that task.
(B) is Blackball. When a role has a black-ball it has the authority to stop the task. The task cannot be completed if a blackball is present. If the team cannot resolve the presence of a blackball, the issue must be taken to the next higher level of operations management.

CTO, VP Corporate Research Roles, Job Descriptions, and Experience Required

Role – CTO, VP Corporate Research
A. SITE
1) Advise location of offices (A, B)
3) Ensure Innovation Organization’s health and safety (HB)
B. PERSONNEL
1) Recruit new employees as needed (HB,A, B)
2) Responsible for continuous self-improvement (HB)
3) Direct systems for job grading (HB)
4) Ensure salary fairness for entire Innovation Organization and Corporate technical community (HB)
5) Manage and direct succession planning (HB)
6) Guide and direct management relationships within the technical organization (HB)
7) Guide bonus factor ratings (A,B)
8) Lobby for an improved grading system (HB)
9) Establish a climate for continually improving performance HB)
10) Evaluate performance of technical and support managers (HB)
11) Guide individual salary changes (A,B)
C FUNCTIONAL
1) Be technical spokesperson in CEO’s staff (HB)
2) Be business development spokesperson in CEO’s staff (HB)
3) Represent technical organization in budget negotiations and budget performance (HB)
4) Represent technology and business development functions in Group planning meetings (HB)
5) Represent technical organization at Management Reviews HB)
6) Be technical liaison for acquisitions (HB)
7) Be interface for foreign technology developments (HB)
8) Be responsible for secrecy agreements and other legal documents such as partnership agreements with suppliers and customers (HB)
9) Prioritize and reassign technical resources as appropriate (A,B) (HB)
10) Maintain contact with Technical Directors (TDs) and General Managers (GMs) of other Corporation divisions as appropriate (HB)
11) Protect intellectual property (licensing, evaluation) (HB)
D. FINANCIAL
1) Direct capital budget allocation (HB, A, B)
2) Direct expense budget allocation (HB, A, B)
3) Ensure compliance to overall technical capital budget (HB)
4) Ensure compliance to overall technical expense budget (HB)

Technical Director Roles, Job Descriptions, and Experience Required

Role – Technical Director (Member of Operations and Strategy Teams)
A. SITE
1) Select offices for individuals at Innovation Organization (RB, A, B)
B. PERSONNEL
1) Be responsible for continuous self-improvement (HB)
2) Recruit new employees as needed (RB, A, B)
3) Grade all jobs in the dept. (HB)
4) Set personnel salary increases consistent with guidelines (HB)
5) Provide for succession planning (HB) (A)
6) Responsible for hiring and dismissals (HB) (A)
7) Advise hiring and dismissals of other technical departments (A)
8) Build a cohesive, supportive team (HB)
9) Cross-train all personnel and support career planning efforts (HB) (A)
10) Coach department members (HB)
11) Facilitate conflicts (HB)
12) Provide training for continuous technology development (HB) (A)
C. FUNCTIONAL
1) Responsible for technical projects (HB)
2) Be technical advisers to plant, sales, marketing functions and customers (A)
3) Review pricing recommendations for new projects (HB)
4) Advise General Managers on capital equipment and office space (A)
5) Advise Sales and Marketing on directions of customer accounts (A)
6) Define technical project flow with Sales, marketing, and general Managers (HB)
7) Provide technical input for customer / supplier strategies (A)
8) Conflict resolution with General Managers on running plant trials, the scope of the team and the priority (HB)
9) Prioritize projects within the dept. (HB)
10) Assess energizing Market/Technical opportunities (HB, A)
11) Ensure an integrated or systems-approach to technology development where needed (HB, A)
D. FINANCIAL
1) Responsible for recommending the department’s budget (HB)
2) Responsible for compliance to department’s budget (HB)

Engineering Technology Director Roles, Job Descriptions, and Experience Required

Role – Engineering Technology Director (Member of Operations and Strategy Teams)
A. SITE
1) Select offices for individuals at Innovation Organization and those sited elsewhere (HB, A, B)
B. PERSONNEL
1) Be responsible for continuous self-improvement (HB)
2) Recruit new employees as needed (HB, A, B)
3) Grade all jobs in the Engineering Tech. dept. (HB)
4) Set Engineering personnel salary increases consistent with guidelines (HB)
5) Provide for Engineering Tech. succession planning (HB)
6) Responsible for Engineering Tech. hiring and dismissals (HB)
7) Advise hiring and dismissals of other technical departments (A, B)
8) Build a cohesive, supportive team (HB)
9) Cross-train all personnel (HB, A)
10) Coach group members (HB)
11) Facilitate conflicts (HB)
C. FUNCTIONAL
1) Responsible for technical projects for Engineering Tech. group (HB)
2) Responsible for the increased business from new projects (HB)
3) Be technical advisers to plant, sales, marketing functions and customers (A)
4) Define technical project flow with divisions (HB, A)
5) Provide technical input for customer I supplier strategies A)
6) Negotiate with plant manager on running of plant, ECRs the scope of
the order, and the priority (HB)
7) Provide technical support to marketing, national accounts, and focused groups to assess emerging opportunities (A)
8) See and screen inputs from marketing, technical, and financial groups for new product development opportunities (HB,B)
9) Evaluate customer-driven product development for business development opportunities (HB,A)
10) Responsible for protection of Innovation Organization intellectual property (HB)
11) Advise General Managers on capital equipment (A)
D. FINANCIAL
1) Responsible for recommending the Engineering Tech. group budget (HB)
2) Responsible for compliance to Innovation Organization expense and capital budgets (HB)

Director/Manager, Technical Support Department Roles, Job Descriptions, and Experience Required

Role – Director/Manager, Technical Support Department (Member of Operations Team)
A. SITE
1. Allocate laboratory bench space for Technical Support Department team members (HB, A, B)
2. Responsible for laboratory housekeeping, storage space and safety (HB, A, B)
B. PERSONNEL
1. Be responsible for continuous self-improvement (HB)
2. Grade all jobs in the Support Group (HB)
3. Provide compensation increase to support personnel consistent with Innovation Organization’s guidelines (HB)
4. Recruit new employees as needed (HB, A, B)
5. Responsible for support personnel hiring and dismissals (HB, B)
6. Advise hiring and dismissals of other technical departments (A)
7. Build a cohesive, supportive team (HB)
8. Cross train all personnel (HB)
9 . Coach support team members (HB )
10. Facilitate conflicts (HB)
C. FUNCTIONAL
1. Responsible for technical projects for Support Group (HB)
2. Responsible for managing the Support Group so that technical information is delivered in a timely manner and with highest quality to Innovation Organization projects and divisions (HB)
3. Be technical adviser to Innovation Organization projects, divisional R&D projects,
manufacturing QA and technical marketing (HB)
4. Advise R&D VP and management team on capital equipment needs and responsible for purchase of equipment (HB)
5. Advise Innovation Organization and Divisions on new analytical technologies and implement as needed (HB)
6. Define Support operation flow for Management system (HB,B)
7. Prioritize requests from Innovation Organization projects and divisions (HB, B)
8. Conflict resolution regarding job priority (HB, B)
9. Work as a team with other technical project teams and assign appropriate Support team member to the project (HB)
10. Identify outside service laboratory and flexible work force to accommodate over flow jobs (HB)
D. FINANCIAL
1. Responsible for recommending and controlling the Support budget (HB)
2. Responsible for compliance to Innovation Organization budget (HB)
3. Conduct financial analysis to determine value of purchase (HB)

Director/Manager, Human Resources Department Roles, Job Descriptions, and Experience Required

Role – Director/Manager, Human Resources Department (Member of Operations Team)
A. SITE
None
B. PERSONNEL
1. Recruit new employees as needed (HB, A, B)
2. Ensure job descriptions are complete and grade all new jobs (HB, A)
3. Participate in technical salary surveys in order to ensure competitive salaries for all employees at Innovation Organization (HB, A, B)
4. Recommend promotional increases and offers to new hires based on salary “maps”
(HB, A)
5. Coordinate terminations with management team to meet legal requirements (HB)
6. Ensure that affirmative action efforts are made in all new hire, promotional and transfer opportunities (HB, A)
7. Advise all Innovation Organization employees on conflict resolution when necessary (HB, A)
8. Advocate an open, motivating and productive environment for all employees (HB, A)
9. Ensure that HR is integrated into the strategic and operational plan of Innovation Organization (HB, A)
C. FUNCTIONAL
1. Support all of Innovation Organization’s HR needs (HB)
2. Interview all final candidates for Innovation Organization jobs (HB)
3. Negotiate new hire, promotional and termination packages (HB, B)
4. Serve as facilitator during conflict resolution when required (HB, A)
5. Design and/or facilitate organizational development meetings as appropriate (HB,
A)
6. Investigate any equal employment opportunity charges upon notification (HB)
7. Bring forward to the management team, identified needs and concerns of employees which require attention (HB, A)
8. Coach Managers and team leaders on developing employees (HB, A)
9. Administer the compensation and benefits program for Innovation Organization (HB)
D. Financial
None

Project Leaders for “Downstream” Projects Roles, Job Descriptions, and Experience Required

Role – Project Leaders for “downstream” projects and developments that create deliverables for operating divisions and value to Corporation (May be members of Strategy Team)
A. SITE
None
B. PERSONNEL
1) Responsible for continuous self-improvement (HB)
2) Provide assessment of team member performance (A)
C. FUNCTIONAL
1) Advise on performance of project personnel (A)
2) Build successful project teams (HB)
3) Be the technical interface and liaison with customers (HB)
4) Keep current on materials/technologies (HB, A)
5) Provide technical advice which demonstrates insight, understanding, direction, and coordination to customers (HB)
6) Mange all aspects of customer projects (HB)
7) Define/access customer needs (HB)
8) Work to build a team w/Sales, Marketing and Manufacturing (HB)
9) Be visible/responsive to customers (HB)
10) Be proactive in pursuing innovative and upgraded technical concepts (BB)
11) Initiate and maintain focus on commercialization of products from beginning to end of experimental trials (HB)
12) Provide capital and capacity input and coordination (A)
13) Work jointly with Process Engineers/Product Specialists (HB)
14) Match customer’s needs and expectations to Corporation’s capabilities and show the benefits that the Corporation can bring (HB)
15) Provide technical value input to team for pricing (HB)
16) Negotiate customer trials support (A)
17) Provide reports, time line updates monthly (HB)
18) Provide competitive intelligence (HB, A)
19) Be able to articulate customer’s business strategy (HB, A)
20) Develop products consistent with customer’s business strategy (HB)
21) Ensure that appropriate resources, people (internal customers) and money are allocated (HB)
22) Be the supplier contact for technical and project information (HB, A)
23) Provide technical assessment of divisions internal technical/ manufacturing strengths (HB)
24) Provide technical assessment of emerging markets/technology trends (HB)
25) Proper project documentation for ensuring intellectual property (HB)
26) Responsible for all project information (HB)
27) Ensure customer knowledge of the value of Innovation Organization product development and support (HB)
28) Consult with Pilot Plant and Analytical Services to determine suitability, availability of existing process equipment, and potential for modifications (HB)
29) Advise on performance of team personnel (A)
30) Build successful project teams (HB)
D. FINANCIAL
1) Manage assigned project funds within budget (HB)
2) Authorized to $10,000 of expenses (HB)
3) Responsib1e for getting financial information to determine value of project to Company (HB)
4) Forecast project budget (HB)

Project Leaders for “Upstream” Projects Roles, Job Descriptions, and Experience Required

Role – Project Leaders for “upstream” projects focused on science, fuzzy-front-end, pre-development, creating patent positions, or shortening development cycle times. (May be members of Strategy Team)
A. SITE
None
B. PERSONNEL
1) Responsible for continuous self-improvement (HB)
C. FUNCTIONAL
1) Advise technical departments of technical trends (HB)
2) Identify and adapt new technologies to Corporation’s needs (HB)
3) Establish objectives and determine project cost and timing (HB)
4) Work as team with marketing, technical, and plant groups to shorten their product development cycles (HB, B)
5) Run Innovation Organization and plant trials (HB)
6) Advise capital equipment needed (A)
7) Use consultants and universities as technical sources (HB)
8) Recommend consultants and licensing for faster commercialization (A)
9) Provide technical advice to Innovation Organization and other Corporate Divisions (A)
10) Work with technical manager to establish project objectives, scope, projected costs and timing (HB)
11) Consult with Pilot Plant and Analytical Services to determine suitability, availability of existing process equipment, and potential for modifications (HB)
12) Work with suppliers, equipment vendors, Analytical and Pilot Plant to obtain needed materials and process equipment and schedule (HB)
13) Cost-out project assignments to gain maximum value with the most cost effective experimental methodology (HB)
14) Advise on performance of team personnel (A)
15) Build successful project teams
D. FINANCIAL
1) Control budget and timing of projects (HB)
2) Responsible for getting financial information to determine value to Company (HB)
3) Authorized to $10,000 expense (HB)

Project Leader for Support Projects Roles, Job Descriptions, and Experience Required

Role – Project Leader for Support Projects (May be members of Strategy Team)
A. SITE
Lab Safety (A)
B. PERSONNEL
1) Responsible for continuous self-improvement (HB)
C. FUNCTIONAL
1) Define and assess customer trends (HB)
2) Advise Innovation Organization of technical and market trends (HB)
3) Develop new sources based on market and technology trends (HB)
4) Work with Innovation Organization and plants on project initiation to establish objectives and determine project cost, timing and technology needed (HB)
5) Work as team with Innovation Organization and plant groups to prioritize projects and to commercialize products (HB,B)
6) Run Innovation Organization plant and customer requests (HB)
7) Respond to customer needs (HB)
8) Advise capital equipment needed (A)
9) Use consultants and universities as technical sources (HB, A)
10) Recommend consultants and licensing for faster commercialization (A)
11) Provide technical advice to Innovation Organization and other Corporate divisions (A)
12) Maintain supplier contacts and disseminate information to other Corporate technical and marketing functions (HB)
13) Keep current on materials/technology and advise other groups (HB)
D. FINANCIAL
1) Manage assigned project funds within budget (HB)
2) Obtain POs to support work (HB)
3) Authorized to initiate work and trials up to $10,000 (HB)

Operation Team Members During Team Meetings Roles, Job Descriptions, and Experience Required

Roles – Innovation Organization Operation Team Members During Team Meetings
A. SITE
1) Advise on Innovation Organization environmental, health and safety programs (A)
2) Advise location of offices (A)
B. PERSONNEL
1) Audit technical succession plans of individual departments (A)
2) Advise fair way to treat technical employees (A)
3) Advise reallocation of technical resources as needed (A))
4) Audit individual department compensation changes (HB)
C. FUNCTIONAL
1) Audit priorities of support departments (A)
D. FINANCIAL
1) Advise financial systems (A)
2) Integrate impact of financial performance (A)
3) Review and upgrade Capital Expenditure Allocation Forms
4) Reallocate/revise, on an organizational level, capital and expense
budgets (HB)

Strategy Team Members During Team Meetings Roles, Job Descriptions, and Experience Required

Roles – Innovation Organization Strategy Team Members During Team Meetings
A. SITE
None
B. PERSONNEL
None
C. FUNCTIONAL
1) Upgrade Mission and Strategy statements (A)
2) Integrate individual departments’ missions and principles (HB)
3) Integrate proposed project plans (HB)
D. FINANCIAL
1) Reallocate/revise, on an organizational level, capital and expense
budgets (A)

Technical Department members During Team Meetings Roles, Job Descriptions, and Experience Required

Roles – Technical Department members During Team Meetings
A. SITE
None
B. PERSONNEL
None
C. FUNCTIONAL
1) Audit priorities of support groups (A)
2) Upgrade market/ technology trends (HB)
3) Brainstorm new products based on customers and technology trends (HB)
4) Provide technical advice to Innovation Organization and other Corporation divisions (HB)
5) Review latest project activity of each member so each member can learn from each others’ experiences (HB)
6) Advise (Strategic Planning Team) on future direction of Innovation Organization research (A)
D. FINANCIAL
1. Purchase equipment and laboratory supplies (A)

Support Group member Roles, Job Descriptions, and Experience Required

Roles – Support Group members During Team Meetings
A. SITE
None
B. PERSONNEL
None
C. FUNCTIONAL
1) Audit priorities of support groups (A) .
2) Upgrade support group mission and strategy statements (HB)
3) Brainstorm new services based on customer and technology trends (HB)
4) Provide technical advice to Innovation Organization and other Corporation divisions (HB)
5) Audit customer service and quality (A)
D. FINANCIAL
None

Span of Control for Managers

Companies tend to go through the cyclical belief by consultants that ‘de-layering’ and increasing ‘span-of-control’ will lead to both lower cost and improved output. Innovation organizations often find themselves working this issue, being pressed to increase the number of direct reports for each manager to ‘improve communication and decision making’. In 2017 the Industrial Research Institute ran a survey to see how the R&D structures of the best R&D organizations compared and how their leaders felt about layers and spans of control to help get to the right organizational structure.

Based on the results of the survey most R&D organizations have approximately 4 levels of management. Many also have one or two levels of pre-management responsibility bringing the total number of organizational hierarchical roles to approximately 7 as described earlier in this chapter.

Also based on the survey number of direct reports for each manager had a sweet spot around 5 to 6, although there are a number of organizations where the number of direct reports was nine or more. Thus since the 1960s work done by NASA where showed that the optimal number of direct reports was around 5 to 7, little has changed. This number seems to remain as the best high-level value to use when designing Innovation Organizations.

When thinking about the effectiveness of changing the number of direct reports, top R&D organizations reported that:

1. Changing the reporting structure so that low level people with one or two reports no longer had managerial responsibility. (Chemist – Technician for example), did not improve the effectiveness
of the organization.
2. Removing mid-layer directors/managers, i.e. adding more direct reports to remaining layers, only gave a marginal improvement to effectiveness.
3. Pushing responsibility down into the organization. e.g. Went from a CTO with 3 Director positions to no CTO and a single Director, gave General Managers much more responsibility which they then delegated out to managers and group leaders. In terms of effectiveness, there was no significant benefit, although the cost was reduced dramatically. The long-term impact on Horizon 1 vs. 3 work has yet to be evaluated.
4. Consolidation of some management levels (from 4 to 3) by eliminating a middle management layer increased the span of direct reports from < 3 and to 7-8. Most of this was been done through attrition. This has been effective and created new opportunities for younger talent. 5. Reviewing spans at every layer of the organization on a periodic basis, especially those with two or fewer direct reports and those with more than 12 direct reports, to determine if the outlier ratio was justified, was beneficial. Adjusting was done where the ratio seemed high or low without a good rationale. Typically the outliers were specific program teams or groups with high-functioning managers and senior technical-ladder members present.

Assessment Tools for Innovation Organizations

There a large number of assessment tools they can be used to evaluate human performance and interests. Many innovation organizations have experimented with their use. Although all the instruments generate interesting results only a few have provided insight to senior management on how to best apply the human resources they are responsible for. These few are highlighted below.

Myers-Briggs Assessments

Excerpting from that MBTI® manual, “the purpose of the Myers-Briggs Type Indicator® (MBTI®) personality inventory is to make the theory of psychological types described by C. G. Jung understandable and useful in people’s lives. The essence of the theory is that much seemingly random variation in the behavior is actually quite orderly and consistent, being due to basic differences in the ways individuals prefer to use their perception and judgment.”

There are 16 personality types defined by the Myers-Briggs evaluation tool. They are formed from four pairs of personality traits. In summary they are:

Favorite world: Do you prefer to focus on the outer world or on your own inner world? This is called Extraversion (E) or Introversion (I).
Information: Do you prefer to focus on the basic information you take in or do you prefer to interpret and add meaning? This is called Sensing (S) or Intuition (N).
Decisions: When making decisions, do you prefer to first look at logic and consistency or first look at the people and special circumstances? This is called Thinking (T) or Feeling (F).
Structure: In dealing with the outside world, do you prefer to get things decided or do you prefer to stay open to new information and options? This is called Judging (J) or Perceiving (P).

These personality traits are important to deliberately match or mismatch when conducting brainstorming sessions or building project teams. The general guideline for Innovation Organization’s is to put as much Myers-Briggs diversity as possible into a team or decision-making group, with the caveat that the team must still be able to work congenially with one another. Increasing an organization’s capability to function with diverse project and management teams is enhanced by training sessions focused on building individual understanding that one thinking style is not better or worse than another, just different.

A deep dive into the nuances of Myers-Briggs evaluations is not the purpose of this work. It is strongly recommended that all R&D leaders become well-versed in understanding the utility of this tool.

KAI Assessments

Another extremely valuable tool for innovation organizations to use is the Kirton Adaption-Innovation Inventory. KAI measures style of problem solving and creativity. This tool provides insight into how people solve problems and interact whilst decision-making. Using this insight, Innovation Management leaders can improve the dynamics and cohesion of their teams. The tool shows that individuals within a team approach problems differently and that this very difference can be used to strengthen the team. This understanding leads to the differences not only being tolerated, but welcomed.

The KAI instrument is a form containing 32 questions. Upon completion an individual is provided a “score” between 60 and 160. Low values indicate individuals are High Adaptors, i.e. very “in-the-box” oriented when solving problems, whereas high values indicate individuals are High Innovators, very unconstrained “out-of-the-box” thinkers. Those individuals with values in between are good communication “Bridgers” that hold teams together. For example:

1. When understanding, defining the problem, issue or objective:
High Adaptors: (1) will tend to accept the problem as given, (2) will prefer to continue being relatively more structured, (3) will focus on key issues – identify the important data, (4) will carefully state (define) the problem – to ensure a relevant solution, and (5) may focus more on current reality than on desired future.
High Innovators: (1) will be likely to re-define the problem, (2) may change the definition of the problem to fit a desired solution, and (3) will likely focus more on the desired future instead of the current reality

2. When generating ideas, solutions or options:
High Adaptors: (1) will generate a variety of practical and useful ideas – they expect a low failure rate
High Innovators: (1) will readily generate many novel and unusual ideas, some of which may be seen as not directly related to the problem statement – they tolerate a high failure rate.

3. When planning for action:
High Adaptors: (1) may generate many criteria to analyze new ideas, and (2) will be thorough and patient in working out details
High Innovators: (1) will try to maintain the presence of novelty when generating criteria and preparing to gain acceptance of the solutions, and (2) need to sell the new paradigm as well as a solution.

As with the Myers-Briggs instrument, the general guideline for innovation research is to put as much KAI diversity as possible into a team or decision-making group, with the caveat that the team must still be able to work congenially with one another. Increasing an organization’s capability to function with diverse project and management teams is again enhanced by training sessions focused on building individual understanding that one thinking style is not better or worse than another, just different. For KAI, there is also an advantage to building project teams whose members KAI scores on average decrease as a project moves down the stage-gate or innovation commercialization pipeline.

As before, a deep dive into the nuances of KAI evaluations is not the purpose of this work. It is strongly recommended that all R&D leaders also become well-versed in understanding the utility of this tool.

Identifying Potentially Prolific Inventors

One of the challenges in building an Innovation Organization is hiring and partnering with prolific inventors. Many authors have published descriptions and tools for doing so, but one of the best is the Inventor Profile developed by John Huber. His work is based on evaluating over 20,000 inventors. Evaluation criteria covered items related to an inventor’s early characteristics when they were between ages 14 and 22 years old. It utilizes information about their scholastic achievement as well as the types of activities they had been engaged in. The tool goes on to inquire about the inventor’s first patent. Items such as their age, number and type of colleagues, access to equipment, were all studied. The remaining factors have to do with the environment in which the inventor is working. These factors include the quality of technical management, the ability to find good problems to work on, and the organization’s direction and stability. In another attribute evaluated in the profile is how inventors actually work on problems. Do they work alone or in groups. Do they work on one problem at a time, and when in the problem-solving process do they start experimenting?

The profile found prolific inventors have (1) a strong desire for excellence, (2) they are well-educated, (3) studied hard in school, (4) worked hard outside school, and (5) work best in a supportive environment in which innovation is expected. There was little correlation to a preference for individual vs. team efforts. Not related to prolific inventors was (1) the undergraduate GPA, (2) the amount of time spent playing a musical instrument, Chess, Bridge, or reading books outside their coursework, (3) time spent playing in sports, (4) time spent in youth groups, i.e. Boy Scouts, (5) having the first patent at an early age, (6) having a supportive relationship with marketing, and (7) preferring to work on many problems at the same time.

These characteristics are shared because many of these attributes are covered during an Innovation Organization’s interviewing process. It’s important to understand and track which ones are actually contributing to the hiring of prolific inventors and innovators.

Organizational Roles Based on Commitment Behavior

Another way to view organizations that is beneficial is through a behavioral organizational chart. This concept was promoted by IdeaConnections and is valuable for understanding long-term personnel dynamics in an Innovation Organization. The “Behavior Based Organization Chart” figure shows four classes of commitment behavior. The behaviors range from light commitment from contractors, through increasing commitment from partners. In Innovation Organizations the degree of creativity observed in an organization and the amount of effort an organization will go to commercialize creative ideas is strongly dependent upon such commitment behavior. As an example, contractors are people who upon winning the lottery are never heard from again. An employee is a person who upon winning the lottery, goes to work, gives two-week’s notice, and looks for somebody to hand the work off to. In contrast, the commitment behavior of a steward is that of a person who wins the lottery, goes to work, and makes plans to hand off his responsibilities to someone who is competent and committed. Finally at the highest level, a partner is a person who wins the lottery, considers his options for retirement, goes back to work, he continues to do what is best for the company.

Comparative Aspects of Commitment Behaviors

The “Comparative Aspects of Commitment Behaviors” fgure shows in more detail ten aspects that highlight different commitment behaviors. Yet another way to summarize this is the following:

Contractor A contractor (1) demonstrates focus on personal needs for being professional, (2) makes personal sacrifices for personal development, (3) expects compensation according to a professional scale, (4) keeps track of time and expects direct compensation, (5) identifies with profession more than company, and (6) builds a career based on providing professional services.

Employee An employee (1) demonstrates need for affiliation with people as a main orientation of work, (2) makes personal sacrifices in order to get the job done in their area, (3) feels responsible and accountable for performing defined job requirements, (4) does what’s necessary to keep their job or get promoted, (5) expects rewards from management and loyalty from others at work, and (6) thinks of self as part of the company; thinks of the company as part of self.

Steward A steward (1) demonstrates equal concern for the company’s people and companies other assets, (2) makes substantial sacrifice of personal needs to accomplish business goals, (3) feels fully responsible for people and operations in his or her domain of the business, (4) spends the time needed to accomplish goals for the business, (5) thinks in terms of the organization as a collective unit, (6) demonstrates he/she is most concerned about the stability of the business, (7) expects others to take full responsibility and be accountable for their role in the business, and (8) identifies personal excellence by level of responsibility taken in the company.

Partner A partner (1) demonstrates most concern for the business financials, (2) is willing to do whatever is needed to support the company growth, (3) feels responsible for how the business is run as well as what it produces, (4) thinks in terms of the company as a machine or an organism, in and of itself, (5) strives for business success above all else, and (6) expects sacrifice from others for the sake of the business.

The preceding shows the upsides of each role. There are however dark sides of each category too. These are:

Contractor A contractor (1) may have an unreliable commitment to the company,(2) lack by-in to company mission, vision, (3) have no strong need to find a place within the organization, and (4) lack a company affiliation.

Employee An employee (1) may have a limited sense of responsibility to the company, (2) some employees don’t want to be empowered, they want direction, (3) have a limited view of job and function, (4) expect job security and company loyalty, and (5) put labor issues before company needs.

Steward A steward (1) may abuse power, (2) puts company stability in front of staff development, (3) driven by financials, (4) overcommitted in time and responsibility, and (5) have difficulty balancing job, family, and personal life.

Partner A partner (1) doesn’t see the boundaries between job, family, and personal life, (2) has a tendency to control rather than manage people, (3) expects sacrifices without assessing other persons commitment, (4) creates unrealistic standards of excellence, and (5) takes responsibility for areas outside of job assignments and alienates individuals.

By additionally characterizing members of an innovation organization by their level of commitment helps in human resorts planning when it comes to signing people to projects and programs. Commitment behaviors correlate to motivation as assessed with the Keys Survey described in Chapter 10 but tend to have long periodicity whereas motivation can change daily and weekly.

Matching Work to Individual Interests and Capabilities

Another important organizational design element is to match individuals’ values with the needs of an organization. One of the best tools for doing this is a Values Management Inventory available from Values Technology. By using such an assessment, each individual in the organization can be understood in terms of their phase of development as shown in the “Values Management Stage Map” figure.

These values are important for an innovation organization’s strategic planning and operations management leadership roles. A person operating at the surviving and belonging Phases are likely to be happiest and most productive carrying out the work, or assisting in the work, of others. When combining the Stage Maps of all individuals and organization, the frequency distribution of their individual values can be compared against the values of the organization as a whole. It’s important for organizational development that individual and organizational values roughly align. The organization that has stated its values in terms of Phase 1 Surviving elements is likely to frustrate individuals whose personal values are at the Phase 4 Interdependent level.

Definitions and Explanations of Work Values

The “Work Values Listing” Figure below shows definitions and explanations for each of the values in the Values Management Stage Map Figure.

Alignment of Values with Type of Work

The Values Clarification Figure shows values more closely reflecting personal, versus work, choices. For the senior leadership in Innovation Organizations it is best to ensure that the top five personal and work values align. If they do not, an assessment should be done on the ability of an individual to handle the differences.

Assessing Believability via Radical Truthfulness and Transparency

An important capability needed in innovation organizations is the ability to predict what is not known. The tool to do this is the “Dot Collector” developed by Ray Dalio. The “Dot Collector Application” figure shows a screenshot of the tool. During all meetings, all participants constantly evaluate whoever is speaking on the basis of (1) if what it they are saying is important and (2) is it believable. His real time information is fed into a master database that can later be queried at a future time when the business results of the topic being discussed are actually known. Correlations can then be drawn between who was believable in a particular subject area and therefore should be believed in the future when similar items come before the organization.

The “Organizational Map of Believability on a Particular Subject” figure shows what the believability ratings are for each person in a particular subject area. This can be utilized by an organization in a powerful way. Rather than weighting each person’s opinion with a similar weight, or based upon a hierarchical position in an organization, the person’s opinion can be weighted according to their believability score obtained by correlating past performance in the subject area along with who was doing the ratings. Making decisions based on summing individuals’ opinions weighted by their believability score outperforms other forms of decision-making when a group is trying to forecast an unknown future. This capability is critical for Innovation Organizations in particular.

Personnel Management Practices for Innovation Organizations

Each organization has its own set of vision, mission, objective, and values. As a result, personal management practices have to reflect these elements in order to be most successful. Innovation organizations have their own peculiar personnel management practices because of their emphasis on creativity and breaking, versus not following, the rules. That’s not to say they are widely different, but some differences in management practices can generate significant performance gains.

Technical Organization’s Skill Requirements by Stage of Development

Different skills, competencies, and people are required at each stage, phase or sprint of research or product/service development no matter what size company. Motivation of these people is also different.

Research, Fuzzy Front End and Ideation Stages: Idea Generation through Technical/Marketing Applications Analysis

Technical & Engineering Skills	Market & Sales Skills	Organizational Skills	Competencies Required	Roles Involved
Idea (Basic Research); Concept Definition (Applied Research); Proof of Concept	Research Literature; Needs Analysis; I.D. internal factors; I.D. competing R&D	Basic Research funding; Intellectual Property Survey; Commercialization Planning; Define intellectual property strategy; I.D. potential partners; Prepare for Gate I review	Scientific/technical; Proposal writing; Team building; Core competencies	Principal Investigator; Research team; Intellectual Property staff; Technical Transfer staff
Technical / Engineering / Marketing Applications Analysis	Commercial needs analysis	Research funding; Explore intellectual property options; Identify liability issues; Refine list of potential partners Prioritize deployment applications; Prepare for Gate 2 Review	Applications engineering; Industry knowledge	Applied research team

Feasibility through Development Stages: Product Definition to Product Prototype

Technical & Engineering Skills	Market & Sales Skills	Organizational Skills	Competencies Required	Roles Involved
Product Definition (Exploratory Development)	Preliminary Market definition	Decide to develop; Find funding; I.D. product champion; Define IP strategy; Patent disclosures; licensing strategy; product development team in place	Intuition to technical; Technical to engineering	Project Team
Working Model (Advanced Development)	Market analysis	Find developmental funding; File patents; Complete commercialization plan	Engineering; Partnership development	Project Team; Entrepreneur or corporate product champion; Engineers; Production; Safety
Engineering Prototype Testing, Refining (Engineering Development)	Complete industry analysis; Formal market analysis and market plan	Funding for advanced development; Establish IP protection; Formal business planning; Prepare for Gate 3 review	Engineering; Legal; Market Analysis; Partnership development	Project Champion; Engineers; Patent Attorney; Industry partners; Market analyst; Planners

Scale-Up: Prototype to Production

Technical & Engineering Skills	Market & Sales Skills	Organizational Skills	Competencies Required	Roles Involved
Production Prototype: Scale-up, test, refine, production engineering, product safety engineering	Full Market Analysis and Plan: Niches, barriers, pricing, competition, cost data, distribution, alternative product application; Risk analysis; Sales projections	Find start-up capital; complete business plan; form business; meet state and federal regulations; purchase insurance; price production facility; Prepare for Gate 4 review	Engineering, production, product safety, entrepreneurial, financing, marketing, cost analysis, legal, management	Inventor, entrepreneur, investors, engineers, production, safety, patent attorneys, corporate attorneys, accountants, consultants, marketing, business management, financial, insurance brokers, trade union officers
Limited Production, Qualification Testing, Running Changes	Contact customers; commence distribution, seek product endorsements, follow-up sales, advertise, publish in technical journals	Find growth capital; start-up business; build plant; buy equipment; hire foreman and labor; arrange product service, purchasing, transportation, record keeping; Prepare for Gate 5 Review	All of above plus specialty engineering, systems engineering, sales analysis, supervisory	All of above plus foreman, labor, sales people, specialty engineers, systems engineers

Commercial: Full Production

Technical & Engineering Skills	Market & Sales Skills	Organizational Skills	Competencies Required	Roles Involved
Full production Start-up	All of the above plus expand distribution; analyze competitor response	All of the above plus monitor costs,; finance cash-flow deficit; refine production system	All of the above plus delegation, marketing forecasting; strategic planning; long-term financial	All of the above plus expanding management, sales and labor forces

Inventor Incentive Programs

An effective invention incentive program is an important adjunct to a company’s creativity effort. The incentive program includes both financial and nonfinancial rewards. Incentives may be for disclosures, patent applications, patents as well as trade secrets. One of the key findings is that companies often get what they pay for. If there is no incentive for intellectual property development innovation efforts are likewise found to be at a low level. On the other hand, some companies experimented with very large incentives and found that what they achieved was large numbers of disclosures, patent applications and patents. They also observed that the work was of poorer quality than when the incentives were lower. The key is to strike a balance in-between. In striking the best balance it was found that nonfinancial measures play a big role.

From a design standpoint an incentive reward system works well when:

• It ensures both the flow of new innovations and supports IP commercialization initiatives.
• Is congruent with the corporate culture; e.g., Sharing royalties may only work in selected situations.
• Both monetary and nonmonetary rewards should be used as forms of recognition.
• Nonmonetary rewards, such as plaques, certificates, crystal, coins, and banquets, luncheons or dinners are highly appreciated forms of recognition and always should be part of inventor incentive system.

Incentives for invention disclosures vary widely. For companies in Europe inventor incentives are often based on royalties of commercialized products and amounts dictated by government regulation. In surveys of US-based companies it’s typically found that over half the companies do not provide any rewards for submitting a disclosure. For those that did provide rewards for disclosures they range between $100 and $1,000 per inventor, reflecting the quality of the invention and the number of team members.

For patent applications almost all US companies provide an inventor reward. They range between $500-$1,000 per inventor. For patent grants around half companies provided some form of monetary award. In around half of these companies the award upon patent grant was in addition to an award upon patent application. For the others it was just given upon patent grant.

An innovative approach to inventor incentives was to give gold coins for granted patents. The coin’s value ranged between $500 and $1,000. Usually during a banquet presentation of the coin the symbols on the coin were used to create a story about the inventor, organization, or invention. This gave the coin both a strong financial, emotional and aesthetic component. It was found that it was highly treasured by both the inventor and the inventor’s family. They became a sought after symbol of accomplishment.

Communication Tools for Innovative Organizations

When it comes to communications in technical organization it is very important to be clear that management is walking-the-talk. If by chance it is not doing so, then it is still a better approach to be honest about the miss-match than to try and cover it up. Technical organizations in particular possess intelligent and thoughtful individuals that can readily spot inconsistencies. Cover-ups only cause poor morale and loss of key employees who feel they cannot trust their direct supervisors and team members.

One way to share company decisions is to map them as shown in the “Right/Wrong vs. Good/Bad Decision Matrix” Figure.  In this figure any decision is mapped based upon two factors.  The first is on its contribution to the financial health of the company, the “Good/Bad” axis.  Where a decision will help the financial health of the company it gets a high rating based on an estimated financial ROI of the decision.  For the second axis the decision is rated on its alignment with the company values, the “Right/Wrong” axis.  Where the decision clearly matches most values it gets a high rating.  Where it is in conflict with employee’s understanding of the values, it gets a low score.

One use of such a communication tool is in weekly employee update meetings.  When new management decisions were announced, the organization’s leadership would plot those recent executive/management decisions on such a graph.  This provides employees insight and understanding on the decisions taken.  For example, a layoff handled in a particular way could be “right” for the company ROI, but “bad” for the process and the way it treated employees in a manner not supported by the company values.

Personnel Retention

For technical organizations Kochanski and Ledford found 15 predictors of retention that were associated with five types of rewards that affect turnover. The five generalized types of rewards were: job content, direct financial (cash), benefits, careers, and affiliation. These are shown in the “Rewards of Work Model” figure. This model identifies the types of rewards that scientists and engineers consider important in making a decision about whether or not to remain with their current employer.

Fifteen areas that management can improve upon to reduce turnover in innovation organizations are shown in the “Predictors of Turnover” figure. Note that these improvements or remedies differ slightly from what might be used with other types of staff groups.

In the area of DIRECT FINANCIAL REWARDS nothing more clearly demonstrates the money is not the only factor in retaining scientific and technical employees than the finding that actual pay level is a less important predictor of retention than are feelings about pay raises and the processes used to minister pay. As such leaders need to pay careful attention to the way pay changes are made and provide education to employees that effectively tells them how they can earn pay increases. It is also important to know that in innovation organizations, scientific and technical employees have a culture that is very receptive to stock options, and are more likely than others to be motivated by stock options, and are most much more likely than other professionals to base retention decisions on stock option opportunities.

In the area of CAREER REWARDS it was found that career opportunity was a most important predictor, followed by satisfaction with training opportunities and the employees’ relationship with his or her supervisor in predicting retention. Thus leadership should focus on the quality of supervision, and when employees leave look to training or replacement of the supervisor to prevent future problems. As an aside note that in innovation organizations job title is not a significant factor.

For WORK CONTENT, scientific and technical workers care greatly about the work they do. The most important predictor in this category is feedback from coworkers and supervisors. From a leadership standpoint good performance management and other systems to provide useful performance feedback from supervisors and peers is essential.

Two strong predictors of retention in the AFFILIATION category reflect two sides of the same coin, organizational commitment and organizational support. In technical organizations ongoing budget support for projects is a primary driver, as well as supervisor’s and mentor’s support of project efforts.

Salary Policy

A company must compensate its employees in a manner which will underscore and reinforce its values and beliefs:

• A desired future state will be obtained when compensation is viewed and used as a tool to achieve strategic objectives, and compensation programs provide ample opportunity for individual employees to receive total compensation that significantly exceeds the average total compensation in the relative job market.
• That said, at any point in time an employee would be expected to receive their current fair market value.
• Mutual setting of goals; fair, objective appraisal of individual performance; an open dialogue that includes both the good and bad about an employee’s contribution towards their own and the company’s goals, performance, and compensation.

The principles of a salary policy would include:

• Salary changes are not coupled with performance discussions (given at different times).
• Salary changes for individuals in a given wage pool shall be all determined at the same time and made effective on the same date.
• Compensation changes are compared against the best salary survey data available. Salaries shall be changed at the same timeframe as salary surveys are available, currently once per year.
• All salary survey data, company grade scales, and wage population compensation distribution information shall be available to everybody in that wage pool.

The activities of the salary policy are:

• Performance discussion shall be given in October and April.
• The October discussion format is based upon both manager employee answering four questions. (1) How do I think I did over the last six months? (2) How do I think you did over the last six months? (3) What areas would I like to improve over the next six months, and how could you help me? (4) What areas would I like you to improve over the next six months, and how do I think I could help you?
• The April discussion format is the same as the October format for questions, except the discussion shall include the employee, his or her manager, at least one person within their organizational peer group from within their organizational peer group, at least one of their organizational peers from outside their organizational peer group, at least one of their direct reports, and facilitator (preferably a trained human relations professional).
• Salary changes shall occur in July. No performance discussion takes place. Reference is the fair market value of the employee. Any employee who disagrees with the benchmark fair market value is based on compensation surveys is welcome to float their resume on the open market to determine their fair market value as long does their manager and human relations professional are involved in the process.

New Employee Training

Ask a research scientist what caused him or her to choose their profession and most will describe a laboratory or intellectual experience that turned them on. It probably was not just a WOW demonstration executed by skillful instructor, and it was probably not an assigned laboratory experiment that work flawlessly the first time. More likely, it was something more personal, like solving a multicomponent unknown in a qualitative analysis, or obtaining a hard earned compound after a lengthy multistep synthesis, or finding that the times for the iodine clock reactions, when put in the correct equation provide constant values for the rate constant of the reaction.

These experience have a common pattern, a pattern that initially involves a period of intense frustration driven by a goal that is difficult to achieve or a problem that is difficult to solve. The frustration is eventually relieved as the problem was solved and the goal met. There then follows a delightful feeling of accomplishment, self-satisfaction, self-confidence and joy. The accomplishment may lead to enhanced understanding of a chemical or physical phenomena, which in turn may stimulate creative processes that lead to new concepts, to new opportunities and yet other challenges. Intensity of the highs achieved by such accomplishment is dependent on the amount of frustration endured and therefore on the magnitude of the challenge undertaken. Individuals experiencing this pattern are motivated to repeat it, accepting greater and greater challenges as their experience, interests, and confidence grow. In the end, they become problem generating, problem-solving junkies. This experience is shown in Curve B of the “Frustration/Reward Versus Effort Profile” figure.

These examples were shared because it is been found to be important that new employees encounter insurmountable substantial challenges during their research training. The challenge must not be overwhelming (at least not at first) and lead down Curve C of the “Frustration/Reward Versus Effort Profile” figure. In such a case little learning, and the possibility of giving up on the new job, is a possible outcome. So the new employee must understand at the onset that there will be a substantial period of frustration during the project, yet some likelihood of success at the end.

Likewise a profile marked Curve A in the figure, one that represents a project that is totally successful isn’t the best first experience, even though it might appear at first to be the most desirable of the three. Certainly it would be preferred by a results-oriented manager, and new employee would object to a trouble-free project. However, this path fails to provide a frustration-effort-reward experience. It does not provide an opportunity for the new employee to learn how to cope with the frustration that accompanies most research and innovation, or how to seek creative solutions to problems.

To the extent possible, it is important for new employees and those employees switch into innovation organizations to be assigned to first projects that have the best chance of a Curve B pathway. Again to the extent possible, a new employee may have several Curve B experiences during the first years in a research / innovation organization. It is helpful if these are graded in intensity so that self-confidence and an ability to deal with frustration will develop gradually.

Downsizing

During her studies at Brandeis University and the Harvard Business School Teresa Amabile studied the effects of downsizing on creativity and innovation output. The purpose of her studies were to understand the effects of downsizing on specific elements of the work environment, identify managerial implications for minimizing the negative effects of downsizing on creativity and innovation, and identifying possible positive results of downsizing if any.

When looking at the stimulants to creativity: freedom, challenge, sufficient resources, supervisory encouragement, workgroup support, and organizational encouragement, it was found that all elements fell between 20% and 30% upon announcement of a 30% downsizing until the time that the downsizing effort was approximately 70% complete. These factors then improved roughly 5 to 10% by the time the downsizing was 100% complete. Studies four months after the completed downsizing also showed a continued 5% to 10% rise in the set of the creativity stimulants, although few ever returned to their initial values. During this period of time the average number of patent applications dropped between 10 and 15%, and invention disclosures dropped between 20 and 30%. The comments related to this experience could be summarized as “the quality of the work has dropped because the sense of pride is gone. We’re no longer really part of a team. Instead, everyone was trying to protect their job, just to satisfy themselves by looking good. They’re not focused on the work itself”.

Thus the overall implications when downsizing innovation organizations are that they have a negative impact on work environment creativity. There were no positive effects found. A slight recovery in performance may occur but it is only after both downsizing, restructuring and rebuilding efforts have been completed. Most of the negative effects are likely due to the instability of an individual’s own workgroup and anticipated downsizing versus the actual downsizing experience. From a management standpoint negative effects may be avoided or alleviated by: (1) all directional information communication, (2) teambuilding, (3) maintenance of intact groups, and (4) getting it over with quickly.

Sources, References and Selected Bibliographic Information

1. “Principles: Life and Work”, by Ray Dalio, September 2017.
2. “Executive Leadership: A Practical Guide to Managing Complexity” by Elliott Jaques, Stephen D. Clement, Ronnie Lessem, June 1994, Wiley-Blackwell.
3. “The Best of Innovating Perspectives, Volume 2, Recent Articles on the Principles and Practices of Innovation Management” by Vincent & Associates, Ltd., 2005, http://www.innovationsthatwork.com
4. “The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business” by Clayton M. Christensen, October 2011.
5. “Behavioral Commitments”, presentation by IdeaConnections, 1997.
6. “Values Management Inventory”, presentation by Values Technology, 1996.
7. “What is the span of control for managers?”, IRI Community Forum, Oct 13, 2017.
8. “MBTI® Basics”,The Myers & Briggs Foundation, 2815 NW 13th St., Suite 401, Gainesville, FL 32609.
9. “The Kirton Adaption-Innovation Inventory”, KAI Distribution Centre Ltd, Beverley House, 55 Heronsgate Rd., Chorleywood, Herts WD3 5BA, United Kingdom
10. “Identifying prolific inventors: results from the inventor profile”, White Paper by John C. Huber, Institute for invention and innovation, May 2001.
11. “How to build a company where the best ideas win”, TED talk by Ray Dalio, 2017, http://www.ted.com/talks/ray_dalio_how_to_build_a_company_where_the_best_ideas_win/transcript#t-556298.
12.”Leadershhip and the New Science”, by Margaret Wheatley, Berrett-Koehler Publishers, 1992.
13. “7S Framework”, by Mike Beer, Presentation to James River executives, 1989.
14. “ARC Team Model”, by Paul Germeraad, AMI presentation, Jan. 1996.
15. “Concepts of Polymer Education: Frustration-Reward-Effort Curves”, by James Harwood, Journal American Chemical Society, 1978.
16. “Effects of downsizing on the work environment for creativity and innovation”, by Teresa Amabile, Presentation at the meeting of the Association for Managers of Innovation, November 1994.
17. “How to Keep Me, Retaining Technical Professionals”, by James Kochanski and Gerald Ledford, Research Technology Management, June 2001.
18. “A survey of Aerospace Industry Inventor Incentive Awards”, by Henry Fradkin and Allen Vaughn, les Nouvelles, Dec. 2000.