The innovation process : suggestions for improvement in a research and development environment

Abstract

Sasol Ltd is regarded as the world leader in Fischer-Tropsch technology and endeavours to reinforce this, not necessarily sustainable, competitive advantage by globalisation. This globalisation strategy reflects the company's commitment to sustainable growth through the development, production, and marketing of new products and processes. Sasol Technology (Pty) Ltd is clearly an important role player in the realisation of this vision, and strives to add optimum value to the treasure-chest of Fischer-Tropsch products and processes. In fact, practitioners in the field of Management of Technology regard the capability to develop new products and processes more effectively and efficiently compared with one's competitors, as a powerful source of a possible sustainable competitive advantage. It is therefore essential to bench-mark our new product development capability against those of our rivals, which induced this pilot study at Sasol Technology Research and Development. A New Product Development Group was established five years ago at Sasol Technology Research and Development. Indirect observation showed that 40 new product ideas had formally been suggested between February 1995 and January 1997 in 11 New Ideas Meetings at the New Product Development Group. Only 10% of these complied with the screening criteria to pass from stage one (preliminary assessment) to stage two (detailed assessment) in the innovation process - the literature suggests an international average of 40% as the bench-mark. This result, which manifested in a success rate of roughly two suggestions from the group per year, was regarded as an early indication of possible weaknesses in the new product process at the New Product Development Group. Such weaknesses need to be investigated as faulty processes may influence the value of the company negatively. The purpose objective of this investigation was consequently to improve on the quality of the execution of development efforts at the New Product Development Group. Several diagnostic techniques were employed to determine the most important underlying causes of the shortcomings in the early stages of the innovation process, namely: indirect observation, survey questionnaires, and interviews. An open-ended questionnaire tested the technical staff on their knowledge regarding the various steps in the new product development process, and on the strategies being followed to market ideas in the New ldeas Meetings. The managerial staff were tested on their knowledge concerning the various steps in the new product development process, and on the screening criteria being used in the New ldeas Meetings. The empirical results were integrated with the literature on critical success factors in new product development, which resulted in the identification of several defects in the execution of the new product development process: • Lack of knowledge on the course of the innovation process. • Poor internal alignment concerning the execution of the innovation process. • Deficiencies in the content of the R&D Project Management course. • Poor communication on the project screening criteria at Sasol Technology Research and Development. • Low motivation of respondents to participate in the New Ideas Meeting. • Imperfections in the structure and content of the New Ideas Meeting. These deficiencies were analysed, and discussed in terms of appropriate research evidence in the open literature. Potential action plans were subsequently formulated to improve the on quality of the innovation process at the New Product Development Group (as well as at Sasol Technology Research and Development), namely to: • Expand the investigation to Sasol Technology Research and Development. • Provide timeous education on the new product development process. • Revise the R&D Project Management course. • Cultivate productive communication. • Create a more innovative climate. • Reorganise the New Ideas Meeting. Some positive results have already been obtained in response to the potential action plans that resulted from this dissertation: • The top management of Sasol Technology Research and Development has decided to review the content of the R&D Project Management course. The revised content will eventually be integrated with existing project management practices in the bigger Sasol. • The New Ideas Meeting was re-organised. The creativity sessions were, for example, separated from discussions on new business opportunities for Sasol. Weekly creativity sessions are being held in the New Product Development Group since September 1997, focusing on the generation of new scientific ideas. These ideas may be precursors to new business ideas. • Four new business ideas were suggested by different members of the New Product Development Group in the New ldeas Meeting on 27 February 1998. One proposal was recycled, as the marketing information was absent. The remaining ideas were, in contrast with earlier proposals, formulated and defended in terms of the Sasol Technology Research and Development project screening list. Al three of these complied with the criteria to pass from stage one (preliminary assessment) to stage two (detailed assessment) in the innovation process, implying that the yearly rate of ideas that passed gate one has already increased by 50%. The results of five additional New ldeas Meetings, scheduled for the remainder of 1998, are still to be discounted.