HYDRO-QUEBEC/CAE CHAIR IN THE MANAGEMENT OF TECHNOLOGY
UNIVERSITY OF QUEBEC IN MONTREAL

The HQ/CAE Chair in the Management of Technology was established in 1990 at Université du Québec à Montréal for the purpose of pursuing research in R&D management and innovation particularly in capital- intensive industries. Funded at first by Hydro-Quebec, and then jointly by HQ, NSERC and CAE, our research aims both at proposing reality-based frameworks for the management of technology and at identifying the best practices, processes, and tools for an effective management of R&D.

The HQ/CAE chair in the management of technology is directed by Roger Miller. Dr. Miller received his B.Sc. degree in engineering from Ecole Polytechnique in Montreal, an M.Sc. degree in Engineering from Stanford University, an MBA degree from Columbia University, and a D.Sc. degree in applied economics from the Université de Louvain in Belgium. He has published extensively in Harvard Business Review, IEEE Transactions on Engineering Management, Research Policy, International Journal of Technology Management, Research-Technology Management, etc.

AN OVERVIEW OF OUR PAST RESEARCH
Five research projects tackling various themes related to the management of technology and the effectiveness of R&D were conducted.

I – Quality in R&D
Our first focus of research was quality in R&D, raising the question of the applicability of quality approaches to R&D. An extensive study was undertaken, and over 45 firms around the world were interviewed. Our findings were numerous but two major points stand out :

• The meaning of quality for R&D is multi-dimensional. Although some executives had stressed in interviews that quality in R&D meant mostly transfer of R&D results into concrete applications and choice of scientific platforms, our investigation shows a complex construct. Quality is achieved through processes combining (i) strategic choice, (ii) administration, (iii) cross-functional integration, and (iv) upward involvement of scientists and engineers.
• Different forms of quality management practices led to different levels of R&D integration within the firm. The lowest level is that of "isolated R&D, focussed at the science frontier," where quality practices are directed towards ex-post evaluation. The next level is "revenue-dependency," where research efforts are geared towards operational or corporate objectives through internal contracts. Quality practices focus here on the measurement of external revenues and client satisfaction. The third level is "cross-functional integration," when a firm has successfully developed methods and processes to integrate R&D with marketing, engineering, purchasing and manufacturing. It involves the merging of functional viewpoints to achieve cost reduction and speed in time-to- market for product development. The fourth level, "R&D for strategic change," is reached when R&D is an active participant in the elaboration of the firm's strategy. The goal is to use science and technology to explore new markets, maintain a constant flow of new products, or develop new business activities. When R&D acts as a strategic impulse, quality is measured according to multidimensional indicators ranging from presentations to management to simulation of future clienteles or participation in strategic alliances.

This research led, among other things, to a publication in the Industrial Research Institute's Journal Research and Technology Management.

II – The new agenda for R&D
Building on past findings, the second theme was the "new agenda of R&D." Our focus was to understand the relation between different competitive contexts and levels of R&D integration within the firm. The underlying goal was to identify the means to improve R&D effectiveness considering the specifics of the firm's competitive context. During our study, we interviewed nearly 70 firms around the world and the analysis of the data gathered led us to the following major conclusion :

• Four different competitive contexts (and the driving environmental forces determining them) were identified, each of them requiring a given level of R&D integration within the firm. The first competitive context, the "technological race," is characterized by a competition in which firms aim mostly at developing or acquiring intellectual property. Success here is mostly a matter of competencies and creativity, with sometimes some degree of luck involved. The second context is "cumulative learning in technological environment," when R&D is focussed on developing short- term intelligent solutions to operational problems that appear in complex technological systems. Success here depends on the ability to apply resources and creativity to generic problems. The "technical parity competition" is a context in which the required scientific and technical knowledge for competition is available to most firms that search actively and recruit bright scientists. The focus is to develop products in an orderly fashion at low cost. Success here is the result of order by action and process review. The fourth context is the "market contest," in which a continuous flow of new and improved products is necessary because products' lives are short and firms need a large portfolio of products. Here, R&D activities use novel and existing scientific knowledge to conceptualize new products based on strategic interactions with corporate management. As the competitive context changes, the role devoted to R&D and, thus, the required level of integration also change.
• Our study also identified, for each competitive context, the strategic vectors served by R&D, the typical R&D programs undertaken, and presented the most commonly used practices in managing R&D quality.
  

This research led, among other things, to a publication in the International Journal of Technology Management and the International Institute for Research.

III – Innovation in Complex Industries
Our thrid research focus was innovation in the flight simulator industry. The study was conducted with the collaboration of the Working Group on Flight Simulation of the Royal Aeronautical Institute in London.

Innovation was found to be a collective standard setting process and the establishement of a set of regulations to certify both simulation and training program.

IV – Large Engineering Projects
In Our fourth focus of research was the management of large-scale complex engineering projects, in particular power plant projects. Our goal was to understand the driving forces of innovation in large-scale complex engineering projects, in particular the role of owner's involvement. Large engineering projects entail a high level of uncertainty and complexity coupled with a high degree of risk, difficulties to foresee outcomes of activities, a certain vulnerability to external forces, and an important number of stakeholders evaluating performance. The IMEC research program (International program on the Management of Engineering and Construction projects) was established and coordinated by the HQ/CAE Chair. Nine universities acted as academic partners and fifteen companies or organizations funded the program. Sixty major engineering projects were studied over three years and an extensive, unique database was created. We tested hypotheses derived from agency and organization theories of innovation, focussing on the relationship between innovativeness of complex engineering projects and internal owner capabilities. Our findings were numerous but, for the purpose of this document, we will focus on a major conclusion : the level of involvement of the owner in the development of a large project and the nature of his internal capabilities have a major impact on the degree of innovativeness of the final outcome :

• The more engineering and design capabilities the owner has, the greater his tendency will be to get involved closely at every phase and level of the project. Such an involvement usually translates into tight contracts, detailed specifications, and close monitoring. Our research has shown a clear negative relationship between an owner's technical capabilities and the overall degree of innovativeness of the project.
• On the other hand, the owner's internal project management capabilities impact positively on the project's innovativeness. The ability to master project management processes, without entering technical details, clearly positions the owner at the strategic level, leaving innovation opportunities for contractors. In such cases, the owner has to be closely involved in the early planning phases of the project, during which the strategic issues are tackled and possible futures are analyzed with other projects' stakeholders. It is during that period that major risks are identified and strategies to manage them are developed. Through this early-stage investment, the owner ensures the alignment of other partners and subsequent activities with his strategic objectives.

This research program has led to three forums with executives from sponsoring (banks, major utilities and energy companies worldwide). A paper was also published in International Business Review and a book will soon be published by MIT Press.

V – Risk in R&D
In 1998, we undertook a comprehensive study of risk management tools in R&D. Facing various types of risks, R&D managers had expressed the need for a better understanding of risk management tools offered in the market and their applicability to various R&D issues, from exploration and strategic structuring to project planning and project risk management. We reviewed over 70 software tools, ranging from data mining to simulation systems, from multi-attribute portfolio analysis to Monte Carlo techniques, and developed analysis and classification criteria. The major outcomes of our study were :

• A typology of different types or conceptions of risks along with an identification of the best strategies to mitigate each type of risk.
• An extensive review of risk management software available on the market.
• An analysis of the applicability and relevance of each software tool considering the type of risk faced, the strategy chosen to mitigate it, and the nature of the R&D activity.

Nevertheless, the major conclusion of this study is that risk management tools do not add value by themselves. It is only through the development of organizational processes and methodologies to link such tools with corporate strategies and objectives that a company can really gain value from risk management techniques.

THE PRESENT FOCUS: THE TRANSFORMATION OF R&D
During the past years major changes occurred in the technological, regulatory, and competitive environments of business. Innovation has become a major means of survival in most industries, even in capital-intensive sectors (traditionally less innovative). As innovation becomes a key success factor, changes in the competitive context require a higher level of R&D integration within the firm. Such a change is not accomplished without trials, as R&D has to develop a new set of competencies.

Many R&D laboratories were closed down because they created little to no value for the company. Others experienced growth as they were more aligned with corporate strategic needs, having achieved a tighter integration of R&D to the firm.

Our research in 1999-2000 will focus on the strategic transformations through which industrial R&D laboratories have been able to adapt to external and internal changes while maintaining coherence between corporate and technology strategy. Our work will concentrate on the following points :

• What are the driving forces in companies' environments that demanded restructuring and realignment of R&D? How do these forces translate into requirements for R&D competencies?
• What are the new roles R&D has to assume? What are the major thrusts of companies' innovation strategy? What are the major risks?

The only aspect managers truly control is how they accomplish this R&D transformation. We will therefore analyze :

• What organizational solutions are suitable for R&D to meet its task?
• What strategies are used to achieve this transformation of R&D?
• What methods, management processes, and decision tools are used for aligning R&D and strategy?

We intend to clarify those issues in the course of our work and provide academics with a new framework for research in the management of technology. Through an extensive analysis of the various methods used, we also intend to provide practitioners with a performant set of tools to help them aligning technology and strategy and achieve R&D effectiveness.

For information please contact:

Roger Miller
Hydro Quebec/CAE Chair in the Management of Technology
Université du Québec à Montréal
CP 6192, Succursale Centre Ville, R-3570
Montréal, Québec, Canada, H3C 4R2
Tel: (514) 987-3000 (ext. 4256), Fax: (514) 987-3343
miller.roger@uqam.ca

Or

Nicolas carboni
4454, Rivard Street
Montréal, Québec. Canada, H2J 2M9
Tel: (514) 952-7060, Fax: (514) 2825752
nicolas.carboni@polymtl.ca