How to sharpen your technology strategy saw

12 minute read

Assemble the best tools to create a sharper technology strategy that will drive better decisions to support innovation in business create greater buy-in and boost return on investment.

For science and technology-intensive businesses, technology is a critical enabler for innovative solutions in its chosen markets. Technology for us means science, engineering and the associated know-how – not IT. Stephen Covey’s 7^th Habit encourages us to Sharpen The Saw.

The hard reality is that strategy is mostly a failing game. A failure to design and a failure to execute [1]. Around 93% of leaders fail to get the strategic results they want and need.

While technology and innovation management are, by their nature, dealing with uncertainty, strategy failure can show itself in small and large ways; from being late to the market, and experiencing unexpected results through to total programme crashes. It hurts the company’s reputation as well as harm individual careers.

There is another way.

By building a set of strategic tools, the innovation or technology leader can quickly cut through the noise to make better decisions. Decisions about what technology to invest in, which collaborations and partners to engage and what capabilities will be needed. The payback is better financial returns from innovation and R&D, greater company and individual reputation and improved morale.

What is Technology Strategy?

Innovation and technology leaders in established companies to technology start-ups experience anxiety about three key questions,

Why do we need to respond in to changes in our market, the economy and competitors?
What will generate the necessary value in our innovative product and services in terms of revenues, or other value?
How will we support innovation development with existing and new capabilities, knowledge and partnerships?

Business leaders, with a broader set of issues to contend with, are concerned with competitor responses, company reputation and risk. Technology and R&D may be a more distant concern but it can bite when a high-profile innovation fails to meet investor expectations.

Between the innovation and technology leader and the business leader, their joint objective is to answer the question, “How will my company increase the success rate of new products and services and deal with radical challenges to the business model?”

For companies involved in technology-intensive innovation, there can be a significant gap between their commercial objectives for new market offerings and the enabling technologies.

The gap can be seen as the distance in satisfying the business vision and the product lines and the capabilities, including technologies, compared to what is required.

Technology strategy is the bridge to close that gap.

Linking technology strategy and company performance

It’s possible or even probable that your strategy is weakly designed or poorly executed.

What if it’s Both?

Paul Leinwand [1] showed that over 90% of strategy fails to realise their promise either in the design or the execution.

Bob Cooper [2] looking at product innovation showed that higher-performing companies have better strategy processes, regular routines and more aligned functions.

Bert George [3] reviewed the link between strategic planning and organisational results. In summary, strategic planning has a positive impact on organizational performance regardless of the setting in the private and public sectors or countries. He also showed that strategic planning is particularly potent in helping organizations successfully achieve their goals.

Image adapted from Cooper and Edgett [2]

For planning technology there are three main problems;

Firstly, is that technology is often left to the technology managers perhaps because top management is uncomfortable with technology or a view that planning is for lower management to do. Our view is that this is an error because technology speaks to the very future of the firm.
Secondly, there might be a view that strategic thinking and planning need to be large and complex to pull the different aspects together – “no time for strategy, I’ve got a business to run!” to repurpose the famous cartoon.
Thirdly that strategy is a rarely taught skill apart from MBAs and strategic leadership programmes. Legacy ways of managing the technology used R&D managers may not provide sufficient rigour for decisions about investments in technologies.

What is a technology strategy?

Consider the following definition of what a technology strategy is and what it should include.

“Technology strategy consists of policies, plans and procedures for identifying, selecting, acquiring, developing and using scientific knowledge and ability to achieve a desired competitive position” Dasgupta [4].

Technology strategy identifies the capabilities essential to a company and its competitive advantages or core capabilities. It should identify the acquisition of these capabilities in what the company already has and also project what will be needed to drive innovations of the future.

Technology strategy also deals with the development and protection of knowledge and know-how. So think about technology strategy as integral to innovation strategy, since innovation strategy determines the future success of innovative solutions the company uses to compete in its markets.

We can also read between the lines and think about what is going on to be successful in technology planning,

Be proactive and conscious

Keep it refreshed

Develop the skillset

We could boil it down to the following; essentially, technology strategy is about decision support technology investments. To be able to define the Why, What, How and When technologies are needed and the capabilities to deliver them.

Developing organizational capability for technology strategy

Equipped with this basic foundation, how should technology and innovation leaders react?

What if we could deploy a set of agile, rapid and flexible strategic “tools” that could lift company performance to be among the best in their field; to become technology leaders?

Transport yourself into a workshop of a craftsman.

Over many years, the craftsman has collected a workshop full of tools. Some have become favoured tools for certain tasks; some mainstays and others for specialist jobs.

We can use this metaphor for technology strategy development. Strategic thinking can be big, breaking new ground. It can be a quick exploration for when new projects need fast answers. Or it can be a regular strategy refresh as part of annual planning.

What are the equivalent technology strategy mainstay tools? And which are those for specialist tasks?

Introducing the first core tool is the strategic technology roadmap.

It is used to map the Why, What and How over time. To identify where value is created, why it drives the firm and how it is enabled.

A strategic roadmap describes a desired future state – a Vision and the gap to where the company is currently. This produces a rich visualisation that can be used for planning and communication like winning funding or creating stakeholder buy-in.

If a picture speaks a thousand words, it is a roadmap that does the talking.

To produce a roadmap a workshop is usually convened.

Getting the right people into the room is a principle of our workshops.

One problem is that information can quickly overwhelm technology planning.

By adding in just two more tools; a linking grid and a portfolio view we can now objectively assess innovation ideas. We can also identify how capabilities and enablers support innovations and how they relate to trends and drivers.

These three tools can take the technology or innovation planner a long way.

FIGURE: A technology strategy toolbox: Adapted from the IfM body of knowledge

The concept of a toolbox for technology strategy is explained in depth by Kerr [5].

What if a technology manager needed more radical or deeper exploration? Perhaps for a divisional technology strategy? We need to bring in new perspectives. We need to reach for special strategic tools.

The types of additional tools are selected to deepen the exploration, to help in decision-making and to communicate to other stakeholders in the technology planning.

Exploration: Research about the trends and drivers behind an industrial trend or future socio-economic directions. Scenario planning is used to deal with future uncertainties and feed several alternative roadmaps. Where the company needs radical or fresh perspectives, creativity tools are used. Expert-led research about new technologies informs the technology manager. Identifying key questions helps the manager identify critical technology intelligence.

Decision-making: During planning, there can be points where a decision is needed about an option or direction to take. Tools for decision-making are chosen to assess whether to “make or buy” a technology, to assess technology development risk and identify the capabilities required; to invest or disinvest. Tools may be used in workshop situations where collaborative working is advantageous, or offline where detailed deliberative working makes sense.

Communication: To deal with some of the failings we identified in technology planning, technology managers must at some point access organisational resources; money, assets, people, and facilities. Communication about the plans on technology must speak a narrative to the organisation and stakeholders. Where technology strategy workshops generate a series of business cases, tools and templates can quickly communicate critical information.

Making better strategic decisions about technologies

Technology strategy is about making better more robust decisions about which technologies to invest in and the nature of that investment: The Why, Why, How and When.

A flexible technology strategy toolkit includes ways to understand competitive positioning and decide about what the strategy technology portfolio needs to include and how the portfolio must be “balanced.” The types of questions strategic technology leaders need to answer at this level include,

Competitive positioning,

How do we meet customers’ future needs and desires?
What are emerging and disruptive technologies?
What will be future core technologies and competencies?

Strategic balance,

What priority technologies should be included in the technology portfolio?
How do we improve the balance of our technology portfolio?
How do we align technology/innovation/business portfolios?

Strategic direction and planning,

How should the technology portfolio match innovation streams and business objectives?
How to manage critical technology and market uncertainties
What policy-type guidance do we make about investment decisions and resource allocations or “strategic buckets”?

Strategic Technology Planning In Action

We have a flexible toolkit for a technology manager to ask and answer complex questions about technology. The toolkit works across different sizes and types of organisations in the commercial, research organizations (RTOs) and university consortia.

Two examples show this agile approach: One in an SME and the second in a large global multinational materials company.

EXAMPLE 1

A speciality chemicals SME wanted to develop a technology roadmap.

Several tools were used to design and run a facilitated workshop-based process over eight weeks. First, a new business strategy was produced then followed by the development of a strategic technology roadmap for product innovations.

Working with the board and the management team a series of exploration tools, decision-making tools and communication tools helped explore strategic options.

The results are the management team has a clear clearer picture of where to invest precious SME development resources and to minimise the lost opportunity costs.

The results included double-digit uplift in jobs and revenue growth and a process to engage the wider organisation in the growth journey as much as the strategic plan itself.

FIGURE: Business and Technology for SME: Adapted from IfM body of knowledge

EXAMPLE 2

A $20bn multi-division global materials manufacturing company with operations and employees around the globe. As an asset-heavy company technology investments were large and carried substantial risk.

The client already had a well-worked-out business strategy including answers to where to play and how to play. The strategy needed validation to identify key market areas and which technologies to invest in for product, process and service innovations.

A series of modular 3-day workshops using the technology strategy toolbox provided a coherent and rigorous process. The tools used included strategic roadmapping, portfolio matrices, technology intelligence, capabilities analysis, and make v buy.

In this example, strategic roadmapping was used as a central tool to explore, create and communicate ideas about technology-led growth.

The results were a set of verified application areas with highly attractive opportunities and feasibility including radical or breakthrough focus. A set of technologies to make; a set to enter into collaborations with and a number to buy in-house.

Figure – Corporate technology strategy development

Results from Improving technology strategy

How valuable would it be for an innovation or technology manager to be able to reach for a set of tools, and quickly and with far greater effectiveness reach conclusions about technology investments?

The improvement you can expect are,

Faster and more rigorous decisions and which technologies to invest in; doing more with your available resource.
Identifying capabilities to invest in and what innovation projects to resource.
Increase the return on investment from R&D and innovation management.

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Rob Munro is an innovation strategist and consultant focussing on improving innovation results for organisations. Please contact me at rob.munro@innovation-success.com to discuss ways to bring greater effectiveness to your innovation processes.

Read more about my service to organisations for Technology Planning in improving innovation results.