DOCUMENT RESUME

ED 260 526 SE 0k5 966

AUTHOR Creighton, J. W., Ed.; And OthersTITLE Technology Transfer: A Think Tank Approach to

Managing Innovation in the Public Sector.INSTITUTION Forest Service (1301h), Washington, D.C.; Naval

Facilities Engineering Command, Alexandria, Va.;Naval Material Command, Washington, D.C.; NavalPostgraduate School, Monterey, Calif.

PUB DATE 85NOTE 95p.PUB TYPE Collected Works - General (020) Reports

Descriptive (141)

EDRS PRICE MF01/PC04 Plus Postage.DESCRIPTORS Change; Continuing Education; Genetic Engineering;

Higher Education; *Innovation; Management Systems;*Research and Development; Research Utilization;*Technological Advancement; Technology; *TechnologyTransfer; Universities

IDENTIFIERS Biotechnology

ABSTRACTThis report reviews a joint attempt of the United

States Forest Service and the Naval Service to enhance theutilization of research results and the new technologies throughimproved effectiveness of technology transfer efforts. It consists ofan introduction by J. W. Creighton and seven papers: (1) "Managementfor Change" by P. A. Philips (discussing techniques in managinginnovative people); (2) "A Focus 'n the Future" by Ross Wialey(offering application possibilities of the principles of economics toeffective management of resource;); (3) "Getting bore Done With Less"by Richard Fay (with suggestions for increasing productivity despitedecreased resources); (4) "Potential Contributions of Education toTechnology Transfer" by Arthur Wilcox (identifying the university'srole and impact on technology); (5) "Emerging Innovations:Consideration for Implementation" by Stan Krugman and J. W. Creighton(explaining the misconceptions associated with biotechnology withemphasis on genetic engineering); (6) "Matching Technology toCustomers' Needs" by Bob Frankenberg (offering perspectives from theprivate sector); and (7) "Technology Transfer for Enhanced ResearchDevelopment Testing and Evaluation Effectiveness" by Milon Essoglou(providing a case history and model of a management approach).(ML)

************************************************************************ Reproductions supplied by EDRS are the best that can be made ** from the original document. *

***********************************************************************

DOCUMENT RESUME

ED 260 526 SE 0<5 966

AUTHOR Creighton, J. W., Ed.; And OthersTITLE Technology Transfer: A Think Tank Approach to

Managing Innovation in the Public Sector.INSTITUTION Forest Service (DOA), Washington, D.C.; Naval

Facilities Engineering Command, Alexandria, Va.;Naval Material Command, Washington, D.C.; NavalPostgraduate School, Monterey, Calif.

PUB DATE 85NOTE 95p.PUB TYPE Collected Works General (020) -- Reports -

Descriptive (141)

EDRS PRICE MF01/PC04 Plus Postage.DESCRIPTORS Change; Continuing Education; Genetic Engineering;

Higher Education; *Innovation; Management Systems;*Research and Development; Research Utilization;*Technological Advancement; Technology; *TechnologyTransfer; Universities

IDENTIFIERS Biotechnology

ABSTRACTThis report reviews a joint attempt of the United

States Forest Service and the Naval Service to enhance theutilization of research results and the new technologies throughimproved effectiveness of technology transfer efforts. It consists ofan introduction by J. W. Creighton and seven papers: (1) "Managementfor Change" by P. A. Philips (discussing techniques in managinginnovative people); (2) "A Focus 'an the Future" by Ross Wialey(offering application possibilities of the principles of economics toeffective management of resources); (3) "Getting ore Done With Less"by Richard Fay (with suggestions for increasing productivity despitedecreased resources); (4) "Potential Contributions of Education toTechnology Transfer" by Arthur Wilcox (identifying the university'srole and impact on technology); (5) "Emerging Innovations:Consideration for Implementation" by Stan Krugman and J. W. Creighton(explaining the misconceptions associated with biotechnology withemphasis on genetic engineering); (6) "Matching Technology toCustomers' Needs" by Bob Frankenberg (offering perspectives from theprivate sector); and (7) "Technology Transfer for Enhanced ResearchDevelopment Testing and Evaluation Effectiveness" by Milon Essoglou(providing a case history and model of a management approach).(ML)

************************************************************************ Reproductions supplied by EDRS are the best that can be made ** from the original document. ************************************************************************

TECHNOLOGY TRANSFER: A THINK TANK APPROACHTO MANAGING INNOVATION IN THE PUBLIC SECTOR

Edited by

J. IN. CreightonNaval Postgraduate School

Monterey, California

J. A. JollyCalifornia State University, Sacramento

Sacramento, California

Stephen LanerPacific Southwest Experiment Station

U. S. Forest ServiceBerkeley, California

1985

Publication of this book, Technoioz Transfer A Think Tank Approach to Managinginnovation in the Public Sector, was in part supported by funds from the U.S. ForestService, Washington, D.C. and the U.S. Navy, Washington, D.C.

Printed in the U.S.A. 1985

Approved for public release; distribution unlimited.For additional copies write. Naval Postgraduate School, Code NC4(54Cf),Monterey, California 93943

ii

4

TABLE OF CONTENTS

Page

IntroductionJ. W. Creighton

1

Chapter 1- Management for ChangeP. A. Phelps

7

Chapter 2 - A Focus on the FutureRoss Whaley

19

Chapter 3 - Getting More Done With LessRichard C. Fay

37

Chapter 4 - Potential Contributions ofEducation to Technology TransferArthur Malt

47

Chapter 5 - Emerging Innovations: Consideration for ImplementationStan Knigman and J. W. Creighton 55

Chapter 6 - Matching Technology to Customers' NeedsBob Frankenberg

63

Chapter 7 - Technology Transfer for Enhanced RDT &E EffectivenessMilon Essoglou

77

iii

INTRODUCTIONJ. W. Crt;tiiton

During 1983, I was privileged towork with the USDA Forest Service ona project to enhance the utilization ofresearch results and new technologiesthrough improved effectiveness of theirtechnology transfer efforts. I was doublyfortunate in that their objectives werenearly parallel to those of my Navyresearch sponsors. The objectives of thetwo organizations dovetailed nicely.

The Forest Service misziou state-ment for the project was quite general,affording me freedom to direct efforttoward goals I considered to have highpotential. I interpreted the openness ofthe mission to mean that part of mytask was to determine if some of theresults of ongoing technology transferresearch sponsored by the Navy MaterialCommand and the Naval FacilitiesEngineering Command might be useful tothe Forest Service. My participation inthis research was not the only factorcontributing to the credibility of myassignment. Among my credits are abachelor of science degree in forestry,extensive experience in woodusing indus-try, and prior work with the ForestService on technology tituasfer projects.

My immediate objectives were asfollows:

To make a general evaluationof Forest Service technoloytransfer effectiveness as com-pared to that of other publicsector organizations:

To identify factors whichmight 'enhance the speed andeffectiveness of technologicalinfonmtion transfer into andwithin the Forest Service;

To suggest organizationalincentives for the movementof appropriate technologies;

To improve technologicaltransfer between the ForestService, other public sectororganizations, and the privatesector, and to search forsuccesses from other organi-zations which might apply;

a Last, and perhaps mostimportant, to determine howtechnology transfer effortscan assist the Forest Servicetoward becoming a leadagency in this endeavor.

A Forest Service committee wasestablished to provide counsel, consistingof Dick Schafer (Chairman), PaulJohnson, Phillip Haug, George Moeller,with Hal Marx serving as the liaisonagent. I was also fortunate to receiveguidance and support from John Vance,Director of the Forest Service AreaPlanning and Development Staff; MartinPearl, Naval Material Command; MilonEsaoglou, Naval Facilities Engineering

1

Command, Jim Jolly, California StateUniversity, Sacramento, Jack Kolb, ArmyMaterial Command, and Steve Caner,Pacific Southwest Experiment Station.Dr. Timothy O'Keefe, representing Cali-fornia Polytechnic University, took careof symposium arrangements.

I began by interviewing ForestService personnel in positions rangingfrom Regional Forester to ranger districtlaborers. There were also discussionswith individuals from experiment stationswith state and local forestry employees,and with people in industry. Topicallyparallel interviews were conducted withNaval Civil Engineering officers andcivilians.

During the interview period, I alsoconducted a survey among Naval Facili-ties Engineering Command employees toevaluate the degree of impediment orfacilitation to the transfer of technologyimposed by Naval procedural require-ments and directives. Topics discussedwith the Naval personnel were also raisedwith Forest Service people and vice versa.It was extremely interesting that forevery point, negative or positive, made bya Forest Service employee, a similar onesurfaced from a Navy officer or civilian.I therefore came to the conclusion thatthe issues and concerns experienced inthe course of the interviews were typicalfor public sector organizations.

As a result, I experienced a changeof thought on project objectives. Al-

though I had no feeling of secure knowl-edge, I felt that I had come to understandthe reasons for the Fo.est Service's waysof doing things. In spite of a few obviousshortcomings, the Forest Service ap-

peared to me as at least equal, if notsuperior, to any other federal organiza-tion with which I was familiar in itsefforts to enhance the utilization ofappropriate technologies.

I was greatly impressed by thededication of the people interviewed, thepride in their work, their desire to dowell, and the belief that they weregiving their best. High levels of compe-tence literally oozed from these people,generating confidence that if requestedand rewarded, technological innovations

would be readily adopted and imple-mented. Professional competency ex-tends beyond the doing of tasks to theunderstanding of action consequencesand the nature of .Tward. When, timeand again, the opinion is voiced thatcareer progress can end with a singlemistake, a long finger points toward theneed for attention to managing changeand managing innovative people.

My thought evolution was sup-ported in a meeting with my advisorycommittee, when it was decided thatthe project should culminate in a sympo-sium with mid-to-upper level managers totreat the subjects which had outfacedfrom the interviews as these being mostlikdy to provide benefit to the ForestService organization. It was furtherdecided that the symposium shouldconcentrate on the emergence of technol-ogy and its transition into use, ratherthan on specific channels which a varietyof technologies had taken. Further,because of the diversity of individuals,technologies, personnel, and regions, itwas determined that the symposiumshould attempt to provide managers

2 Technology Transfer: A Think Tank Approach:a Managing Innovation in the Public Sector

7

within the Forest Service with food forthought on the management of innova-tion rather than how-co prescriptions.

The list of agenda items generatedby the interviews included the follow-ing:

Provide a better understand-ing of response and non-response to reward systems;

Treat the subject of responseto change, recognizing thatwhile people respond tochange, systems tend not to,and may actually act asbarriers;

Illustrate how flat organiza-tions tend to produce moreinnovations than those withmultiple responsiMlity tiers;

Illustrate the delicacy of risk-reward interactions;

Provide explanation for thepremise that opportunitygenerates innovation, andrespond to the question ofhow value is generated andhow it is recognized;

Relate the concept: "eachday is a small dose of thefuture, yet the acts of the dayare judged by standards ofthe past" to the managerialacts and policies of each of usand OUT organizations;

Illustrate how observance of

the concept "people in anorganization, their work-related goals, and their quali-ties become what you rewardthem for being" can encour-age innovation;

Relate Forest Service objec-tives and responsibilities tothe needs of Forest Servicecustomers, Like it or not,those you service determineyour future;

Affirm the proposition thatwithin an effective organiza-tion, goals are pervasive andcongruous, and that rewardswhich foster technologicalchange tend to be thosewhich have benefits for anentire organization;

Provide a deeper and morewidespread understanding ofthe many obstacles confront-ing an emerging technology.

All of the above subject areasreceived some treatment in the talks bythe speakers in the symposium, althoughthey were not specifically identified. Nospeaker addressed only one area, andmany addressed most of the topics,explicitly or implicitly.

The keynote address, entitled"Managing for Change," was deliveredby Dr. P. A. Phelps, currently Vice-President for Research of BechtelNational, Inc. Dr. Phelps is a rearedNavy captain with a long record of

3

successful innovation during his Navycareer. At the time he retired from theNavy in 1974, he was Deputy Cowman-der for Research and Facilities Acquisi-tion for the Naval Facilities EngineeringCommand, Washington, D.C. It wasunder his direction and that of MaoriEssoglou that much of my technologytransfer work was conducted. Dr. Phelpsis well known in the Navy and theBechtel Corporation for his skill inmanaging innovative people and managingfor change.

Kmagers are not expected topredict the future but are expected to beable to respond effectively whentOillOti9WS become todays. While theytend to thrive in a world of uncertainty,effective managers do not like to becaught by surprise. They constantlystrive for insight to avoid surprise.

Two of the Navy and three of theForest Service interviewees expressedthe opinion that the only economist whocould make an accurate prediction offuture events was Murphy of the famouslaw. Ross Whaley, whose topic was"Focus on the Future," is well known asa Forest Economist. A review of some ofhis work causes me to believe that he isnot a provider of economics bait forMurphy. His unusual insight and under-standing of demographics, culture, andthe nature of man open the door tothe application of the principles ofeconomics to the more effective manage-ment of resources.

Dr. Whaley was, until recently,Director of Economics Research, ForestService, Washington, D.C., and is nowPresident of the College of Envirun-

mental Science and Forestry, StateCollege of New York, Syracuse.

Retired Navy captain Richard Fay,who conies from a mixed educationalbackground of engineering and manage.ment, spoke on "Managing More WithLess." Dick Fay is famous in Navycircles for his ability to manage majorNaval systems acquisition contracts with-out exceeding budget, for his efficientmanagement of Navy shipyards, and forgenerating managerial environmentswhich cause people to reach the goals ofthe organization. Since retiring from theNavy, he has been Executive Vice-

President, Scientific Management Associ-ates, Landover, Maryland, specializing inmarine system design and project sup-port.

Dick Fay's record of communitysupport and participation in communityactivities are evidence of his ability tointeract with people at all levels ofsociety. His counsel is widely sought, forhe is a master in the art of taking advan-tage of opportunity and transfer oftechnology.

A common feeling among thoseinterviewed was that they were alwaysexpected to do more in spite of beingprovided with decreased resources. DickFay was asked to share some of histhoughts on this subject with us.

There are many definitions of tech-nology transfer, some specific, somequite general. A common definitionimplies the new use of a technology orinformation, or the use by a new group orindividual. Utilization seems to be

4 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

9

the key to technology transfer defini-tions. For this reason, many do notconsider education to be part of thefield of technology transfer. If weconsider factors essential to the trans-fer of technology to include willing-ness to perform, capability to performor to transmit knowledge, and the credi-bility of interacting with people, thecontributions of education must beconsidered. We depend upon our univer-sities to prepare people to performneeded services and to enhance thelevel of capability of already-competentpeople through advanced knowledge offundamentals and understanding ofapplicability.

Art Wilcox is an example of univer-sity professors who can balance thetheoretical and the practical by effectiveapplication. Dr. Wilcox has been aMetropolitan Park Director, for 32years the Department Head for Park andRecreation Administration at MichiganState University, then at Colorado StateUniversity He has combined classroomteaching and university-based researchwith extensive consulting and continuingeducation activity. Because of his pastsuccesses in Park and Recreation consult-ing, and his ability to apply the things heteaches, he was asked to address thesymposium audience on "Potential Con-tributions of Education to TechnologyTransfer."

The advisory committee did notwish to fill the symposium with examplesof emerging technologies. On the otherhand, the subject of emergence pitfallswas considered to be of Milne irapor-

tance. Of great interest, not only toforesters but to people from all fields,is the subject of genetic engineering. Dr.Stanley S. Krugman is neither a geneticistnor an engineer by education, but he doeshave extensive experience in workingwith biological scientists. CurrentlyDirector of Timber ManagementResearch, U.S. Forest Service, Washing-ton, D.C., he carries the responsibility forresearch in genetic engineering in the fieldof biotechnology within the ForestService, and was thus emmently qualifiedto speak on "Emerging Innovations:Considerations For Implementation."

It is commonly believed that themanagement of technology emergencediffers greatly between the public andprivate sectors. While there may bedifferences, the committee felt that theremight be much to learn regarding princi-ples of transfer from the private sector.The Hewlett Packard Corporation is aprime industrial example of effectivetechnology management. We weretherefore fortunate to have Bob Franken-berg, the General Manager of HewlettPackard's Computer Systems Division,Roseville Operations, with us to discussHewlett Packard policies and techniquesunder the titl,. "Matching Technology toCustomer Needs."

Bob Frankenberg is responsible forthe low cost and mid-range of the HP-3000, Hewlett Packard's commercialcomputer system. In his 17 years in thecomputer business, he has developed over25 commercially successful computersystems. Most of his background is inproduct research and development, buthe also has experience in product market-

5

ing, computer manufacturing, and radarand computer systems field sersii Ls.

In addition to his W06, at HewlettPackard, he itas extensive consultingexperience and has published widely oncomputer technology and managementtopics.

A viewpoint often expressed bypeople in government is that managerkilpolicies and techniques which work forthe management ef technology in indus-try will not work in the public sector.Comparison between successes adducedby Bob Frankenburg and those describedby Milon Essoglou in his address on"Technology Transfer for EnhancedRDT&E Effectiveness" reveal a gr---a deal

in common.Asp former Naval officer and civil

engineer, Milon was in charge of construc-tion on various projects, but has held his

present position as Director of Research

for the Naval Facilities Erigo.

Command, Washington, D.C., for many

years. His enduring inkiest In andinvolvement with i tanaging the transitionof tesearch results into use dates backmore than twenty years.

Milon is a strong believer that evenin government, the research organizationmust be revonsive to the needs ofthe working engineer. When he began hiswork on transferring the results ofresearch into use, he encountered anorganization which neither asked for, norexpected, applicable technological advicefrom the Navy Civil Engineering Labora-tory. Field engineers hardly consideredthe laboratory as a useful and dependablesource of technology.

Since that time, there has been agreat change in the civil engineer ...

Approximate's' of civilengineervig off4 -2.s currently reportthat the; 'nave requested informationfrom the laboratory and have used it. Atthe laboratory itself, there has beenan ever-increasing sense of responsibilityto provide technical Assistance to the fieldengineer-the customer.

Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

11

MANAGEMENT FOR CHANGEP. A. Phelps

I was delighted when Wally invitedme to meet with you, and I would liketo express, from the beginning, my deeppleasure in being able to join you. Ihave found that some of the more inter-esting stimuli and thoughts that havecome to me have come from talking topeople totally out of my field. At firstI was going to question Wally about whyin the name of heaven people in theforest business would have any interest inhearing anything from someone withmy baec,ground. After giving it a littlethought, however, I was able to rational-ize that if I can learn something fromForest Service people, maybe the con-verse is also true. Moreover, I get abit jaded with the same daily officeroutine in San Francisco.

Orginally, Wally invited me to talkto ycu about the management of creativepeople. A good subject, because Hike tomanage people and believe that all peopleare creative to one degree or another.Although I've given this talk for Wallybefore, I was all prepared to update andredo my talk on management of creativepeGple. However, when the advanceprogram retched me, I learned that I wasscheduled to talk about "Management forChange." I stopped my word processor,stopped my thinking process, and con-templated shifting gears to talk abouta different topic. In fact, my confusionabout the topic made me concerned thatmy memory was going, so I decided to

talk to a psychiatrist friend about it. Thepsychiatrist friend said he didn't reallythink my problem was serious. To set mymind at ease, he told me about a patienthe had seen earlier in the day, and who hethought did have a problem worthy of hisattention. The patient, a woman, hadcome to see him because her husbandthought he was a chicken and was roost-ing all about the house. He made nests,cackled a lot, and really was comportinghimself in a way that caused her a lot ofconcern. My psychiatrist friend asked herhow long this had been going on, and shesaid about two years. "Why didn't youcome to see me sooner?" he asked her.

"Well, it was so nice having a freshsupply of eggs all the time."

I also want to mention that it wassort of fun to talk to a couple of fellowsoutside tonight who hail from the south.I mentioned that for some reason theArmy seems to produce almost all of itsofficers from the Deep South. Perhaps, Isuggested, they join the Army to escapefrom Alabama end Texas and other suchplaces. Also, I observe them to be full ofAggie and Tulane stories. One such storyI remember about Trlane is about thefellow who hurried into a store duringone of the football games. He rushed upto the counter and asked for two ordersof that famous southern barbecue, a largeorder of colt slaw. and three cokes. Theman bt.shind the counter said, "Youmust be from Tulane, young man."

Chapter 1 7

That's right, and just how did youknow?'

To which the man behind thecounter replied, "Because this is a hard-ware store, son."

The use of stories in managementof people ic to loosen us up a littlebit and make us a bit more manageable. Iused to teach Midshipmen at one time.and loosening them up often posed quitea problem. There was another professorteaching physics with me who had asystem, so to speak. "You know," hesaid to me, "people's minds are prettywell set, and need to be prepared inorder to receive knowledge." He visual.ized Midshipmen's mind: to be likeclosed oysters. He'd tell them an off-color story, and as he did, he'd visualizethe oyster shells opening up. Then hewould tell another story and they'd openup a little bit more. Finally, when he feltthat he really had them ready and couldget some knowledge thrust into them,he'd shout at the top of his lungs, ..requals M Al" The oyster-shell mindswould all quickly snap shut again, andhe'd start all over.

The management of creative peopleis just a part of the management ofchange. Of course, management ofchange includes the management of otherresources in addition to people. I reallydon't know much about your technicalfield and the management of your otherresources, so I decided to stick to thepeople part. As I said, I have come moreand more to believe that everyone iscreative, and that our job as managers isto extract that creativity and employ itconstruetr.ely. If you manage people

well, I believe you will usually find thatthe management of things will take placein due course. That may be heresy tosome management school people. but myexperience has been that there morep..ople who know how to manage thingsthan know how to manage people. If :ouinvest a little trust in people and goahead with the hope that they knowsomething, it is surprising how seldomthey will let you down That doesn'tmean we shouldn't pay attention to"thing" management, but that "thing"management comes easier if one getspeople management done well first.

I'd like to show you a short video-tape of a project that I've bee workingon. The relevance of this videotape isthat the best service I can perform foryou as a practitioner of management is todiscuss some of the things about manag-ing creative people that have been suc-cessful for me in conducting a realproject: a project for developing amethod of egessing from a deep under-ground base. One of the possible meth-ods for deploying ICBMs that does notget much publicity is an undergroundbase several thousand feet deep. It's avery intriguing project which opens up alot of opportunities for ingenuity. Dur-ing the course a the work, I have drawnfrom a lot of fields with which I havebeen involved.

Our task was to design an egresssystem which would provide a route tothe surface so that missiles stored in thedeep base could be launched after anenemy attack. We were awarded thecontract for this job on August 1, 1982.The initial work was to design a piece of

8 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

equipment and use it to demonstrate thefeasibility of egressing through the rubbleat the surface above an underground baseafter a nuclear attack. We designed a 12foot diameter hole-boring machine,manufactured it, tested it, took it toNevada, then employed it to egressthrough a large pit from a cavern whichhad been prepared underneath it. At thetest site, we first had to dig the cavern,then bore vertically upward through theintact pound above the. roof of thecavern, then traverse 50 feet furtherthrough a prepared pit. This pit con-tained large botider/ of the sort thatmight txist after a nuclear weaponhad exploded at the surface. In just overeight months after being awarded thecontract, with no prior design or machin-ery, we successfully came out of theground with a real piece of equipmentin April, 1983.

It is not simple to look back andanalyze the reasons for our success onthis demanding pro pct. Partly it wasluck, partly it was management, partlyit was forethought, partly it was goodsubcontractors, partly it was just sheerdetermination to go ahead and do it! Inlarge part, though, it was, I am convinced,the fine people working on the job. It'sabout some of these people that I want totalk to you. But first, let's look at thevideotape.

(The videotape showed themachine designed to boreupward the 12 foot diameteregress hole. Pictures show itwhile boring, and includedthe operation of the materials

handling equipment as itremoved tailing from theboring operation.)

That's the background for some-thing which had never been done before,an undertaking that required putting ateam of people together, figuring out howto do the job, and getting on with thesolution, The field work was paralleledby engineering in the home officethroughout this first phase of the project.

I would like to talk abort two ofthe key people who worked on theproject: the deputy program managerwho ran the field test operations, whomI'll refer to as Roy Watson, though thatwas not his real name, and likewise, forthe deputy program manager heading thehome office engineering work whom I'llcall Charles Buss. Both of these peopleore absolutely superb managers whohave made my job easy. They demon-strate one of the first things aboutputting a project hie this together, whichis to get the right people the first timearound. By this, I don't noes arily meanjunt getting good people, but also match-int them to the requirements of thejobs.

Roy Watson, in chkrge of the fieldeffort, was relatively young but hadpreciously held positions with significantresponsibilities. When I identified andproposed Roy for the job, I was told thatI didn't need a man this good. When thissort of denial happens, you sometimeshave hold your ground and insist, 'Ifyou want this thing done, I need the rightpeople, We cannot go out and do de-manding things with people who don't

14

Chapter 1 9

have qualitkations." I got Roy Watson.I'd like to point out a couple of

things which turned out to be importantthat Roy %%atson did early in the jobwhen we mobilized t the Nevada TestSite. The U.S. Air Force was our clientbut the Department of Energy ownedthe test site. I'm not at all sure theDepartment of Energy really wanted theAir Force down there, mucking aroundmaking holes hi their test site. In addi-tion to our three principal subcontrac-tors, other participants included thelong-established contractor who providedsite services, the local labor unions, aconstruction company out of Chicago, anequipment manufalaurer from Seattle,and a major aerospace company. Roybegan the task of fitting people togetherto make sure we were in good conimuni-cation with the other players. We put anexperienced field manager on the jobquite early, anti we had him make calls onand drink coffee witi all of the peopleinvolved to find out what they wereworried about. %%e wanted to knowwhich oxen might be worried about beinggored by our operations. Any one ofthose groups, the labor unions, theresident contractor, the Department ofEnergy, etc., could hale prevented usfrom succeeding had they chose not tocooperate. If we had not established thernht relationships, it is probable that wewould have failed.

One of the things that Roy pulledwas new to me. He said, "I want tohas e dinner for the construction crew."The crew eventually ianisisted of about50 tradesmen from a variety of unionswho were to do jobs which did not

always fit union jurisdictional rules. Wehad everything from electricians :oa couple of iron workers from Detroit.Roy said, "I want that dinner for theseguys so I can explain what's going tohappen. I want to have it at a real fancyrestaurant down in Las Vegas, with anopen bar and so forth. Can you hack thatout iaf your non-reimbursable budget?"The Air Force didn't pay for that sort ofthing, obviously, but agreed to give it atry.

We rented a hall, prepared a slideshow, and had a sit-down dinner withan open bar. All of us in managementroles were able to enjoy a rather rareoccasion of spending the evening with ourcrew-to-be in a non-work environment. Itwent well. The crew was informed andpleased, and some were surprised to findout that several of our managers had beenelectricians or equipment operators intheir own time.

Management in the constructionbusiness is quite often remote. Ourmanagers sometimes think they're com-inunice.ting when they put out printedflyers to inform the workers. Roy'sapproach was to sit down, drink, andhave dinner, then show the crew slidesabout the project plan. An old militarydogma proclaims that officers don't"fraternize" with troops and this stilltends to color our thinking. Amongother things, it leaves out of accountthat everyone's safety on a constructionjob depends on what people know aboutwhat each of them is going to do. Thedinner created a favorable climate forus to be able to bring up the touchy pointthat some jobs normally performed by

10 Technology Transfer: A Think Tank Approachro Managing Innovation hi die Public Sector

15

union workers would not be because thejob was a test operation. The crew notonly accepted this, but came up withsome pretty good suggestions of theirown. There is a lot of competitionamong construction people to meetdeadlines, to do things, and to succeed.We told them that we were probablygoing to have to go on three shifts, tobring other miners in, and so on.

There is no doubt in my mind thatRoy's idea of having that dinner m de abig difference. Thereafter, there was acamaraderie on the job that is not oftenseen. Everybody knew who our manage-ment people were, and no one loafed.When we actually began the work, therewere members of several labor unionsworking in the same area. The jurisdic-tional rules called for miners to move dirtand electricians to put wires together, buttheme guys didn't fuss about that. In onecase I saw an electrician furiously clearingdirt away with his arms.

Another thing Roy pushed was thatwe print decals that you stick on yourhard hat. I'm sure you've seen them ifyou've seen a construction worker.Some workers have decals all over theirhard hats just like medals. They areproud of them. The decals say whothey're with and makes them distinct.We got our stickers printed early soeverybody could identify with our jobright from the beginning. Everyonepasted the decals on their hats. Theylovel them. They ate them up. "*.",7 alldid!

But the thing Roy asked for whichI figured was really going to break thebtnk was "some sort of a memento for

thiz, job." So we created a watch fob,cast in bronze, with a nice looking pictureof our machine coming out of theground. On the reverse it had the namesof all the organizations involved; our AirForce client organization, the Depart-ment of Energy, the site contractor, andall our subcontractors. This little bit ofbronze was worth its weight in gold. Infact, the dinner, the stickers, the watchfobs, and a few other iteins couldn't havecost more than a couple of thousanddollars on a job which had a value in theneigiCoorhood of SI5 million. Yet somany r.ianagers just don't think aboutthings like that. If Roy Watson hadn'tcome to me and urged me, I probablywouldn't have given the salesman of suchwares the time of day. I'm that muchwiser now.

My friend, Charlie Buss, sluggingaway back in the home office, did anequally fine job. He had a different crewto work with. Unlike Roy in the Field,who was dealing with hardhats, Charliewas back in the office managing a crew ofPhDs who think they know how to di,everything, but usually have never doneanything in the field. Hardhats, by theway, are pretty smart. Evoi though theydon't come equipper' with a lot ofdegrees, they can viten show you thingsthat are real eye-openers. With a hybridbackground like mine, I have to hide thefact that I have this oppressive PhDdegree when I am out there. Sometimes Ithink that it must be harder to managepeople frustrated by being cooped up intie home office than it is to manage fieldpersonnel. There's something subtlerabout managing in the office.

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Chapter 1 I1

I believe that my home officemanager's success stemmed from his

thorough understanding of the job and ofthe need of each work task. Charlie Bussfully perceived the rationale behind theneed for the machines, and their design,manufacture, and operation. He did hishomework well, developing a firm mentalconstrudion that enabled him to guidethe work in great detail and with com-plete confidence. He was also able toinfluence other contractors, who weredoing their own thing, to mesh with us.He could quickly spot where the clientwas wrong and demonstrate why andcould present difficult technical questionsso that the client could provide guidanceto allow us to do a sensible job.

The second thing that Charlie did isvery mundane but highly creative. Itssomething that I don't think I person-nally do very well. Charlie prepared awell-organized and highly detailed engi-neering plan and schedulea work plan-ning document. We had specialists whohelped him with this, of course, but hesupplied the logic, the thought, and theinsight which made the difference be-

tween a mechanical plan and a trueblueprint for the project structure.

I'd like to spend a fe,v minutes nowto look at some of the personality traitsand management techniques of these two

managers. Both differences and thesimilarities are instructive.

Roy Watson is an ebullient, short,feisty guy who gets out there v ith themen and is always fur of words andjokes. Charlie Buss is rather reservedand tends to be a chin stroker. Watson isa loquacious fellow who sometimes

doesn't consider his words carefully. Incontrast, Buss does choose his words. Itend to listen to him more carefullybecause I can be pretty sure that he hasthought through what he says. Watson

makes friends quickly , and people tend tolike him quickly. On the other hand, youhave to know Charlie for a few monthsbefore you realize what an effectivemanager he is.

The qualities they have in commonmay be even more enlightening as reasonsbehind their success. Both are willing toassume risk, not to the point where theywill lose their jobs nor lose money for thecompany, but rather in the sense of mov-ing out of the ordinary, Both are unsatis-fied people, and each always has an eyefor the next innovation. Both are intenseand able to focus on whatever is at handat a given time, which is sometimes verydifficult to do. We all know "butterfly"people who don't ever manage to concen-trate on one thing, but who forever hopfrom one thing to another. Roy andCharlie are not that way; they keep on anissue, and they ride it through to thefinish.

They are what I call functionalscatters, and I sort of envy people likethat. By functional starters, I mean thatthey're able to get themselves up andgoing to accomplish things. Its a lot offun to talk about why you can't do a job,and justify procrastination by such state-ments as: "If only our management weremore enlightened," or "lf only they'dgive us more money," or "If they'd stopgiving us those turkeys they sent us asemployees." There are always lots of

12 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

17

reasons why something can't be done.But functional starters get going and keepgoing on a job. They don't seem torequire an external application of force toget them underway. They're not easilydiscouraged, and in Abraham Maslow'shierarchy, they seem to qualify as self-actualizers.

Both managers have perceptivityand very sharp sensitivities. They "smell"out situations, people, and trouble beforeit begins. In many cases I've had one ofthem come to me and in effect say, "Ithink that the client doesn't know it, ourcompany doesn't know it, but thatsomething is not going to happen right."This has happened both on the adminis-trative side and on the technical side.

Finally, concerning similiarities,both manager, are intelligent in morethan an acade:.nic way. They know wheretheir limits are and when to ask forhelp. They are "survivors," a term whichI use in a non-pejorative sense. There aresome interesting accountings of peoplewho are actual survivors of such things ascombat situations and major disasters,who seem instinctive!) to know how tomaintain themselves in a "win" situation,or to keep their "spirt!" going up. I liketo think of continuing success as some-thing which feeds all of us, and makesusthink that we can do things that wewouldn't undertake without prior experi-ence in success. If you get people on thatupward spiral of adding new wins to theirrecords, they will feet that they canhandle tough jobs and very often do.

As I said, I'm a practitioner not aprofessor of management, but I have

abstracted a few thoughts from myc...esonal litany of management ideas forwhat they are worth, and try toconvey some of them to you in this talktonight. I've cribbed a few of them,adapted a few of them, and originated a

few of them, and I'll call them SelectedRules for Managing Creativity. I re-jigzerthis list every once in a while, and ifyou're interested in it, you're welcome toa copy.

I've already mentioned rule numberOne, which is that each one of us is acreative person. Quite frankly, themanagement of creative people is not sodifferent from the management of peoplethat one doesn't think of as being crea-tive. Theodore Levitt wrote an articlesome years ago about the fact thatwe can only stand so many creativepeople shoveling stuff out of their ivorytowers upon those of us who have toclean it up and deal with it. Well, thisis not the only concept of creativity.You don't have to put up with thesebloody nuisances. Such eeople can beuseful, but I have to agree with Levittthat we can only take them in smalldoses. In another view, creativity is thesimple ability to make something thatisn't.

One thing you should do at thevery beginning of any job is to assessyour management situation and decidewhat you want. Some of the things thatyou might want are production, ideas,mutual stimuletioa, interaction, compli-ance with rules, and so on. If you'regoing to manage a situation where crea-tivity is required, then it is imperativeto determine carefully what these

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Chapter I 13

management objectives are to be.Another rule is fundamental in

anything we do with people, and that's tolet the troops know what is going on andwhat the objectives are. There are avariety of ways to do this. In the projectI've described to you, we are now back inthe engineering stae. I've gotten backinto the business of staff conferences, butcan't say that I'm exactly satisfied withthese as a communications medium. Weneed more of a "milling" occasion such asa coffee klatch where the more juniorpeople can stick in their -two bits"without the inOuidation present atformal meetings.

A rule that I believe in is to managein a way that enables people to dowhatever they were hired for in the firstplace. 1r ou know, very often we hirepeople but then don't really create anenvironment in which they can effectively do their thing. If you hire people,have the courage, to let them do whatthey can do well without interference.Experienced managers are more comfort-able than inexperienced ones with thisidea. A new manager who has been in anon-supervisory position for ten years,and who suddenly comes into a positionwhere he figures that his neck depends onwhat somebody else does, is often veryreluctant to allow an individual under thissupervision to do his thing. You mayhave to actively train this tendency out ofyour managers and supervisors. Make

them take a chance on tlicir employees.An example of thi.3 is the use of

microcomputers on my current job. I

ordered two microcomputers with noformal justification, a tactic which really

antagonizes the budget people. Ofcourse, I produced a justification, but inall honesty I wasn't really sure how wewere going to use the equipment, exceptthat I knew that several of our new hireswere suppesed to be adept in computerapplications. We gave these employeestheir head, kept them informed of ourproject objectives, and the results weremiraculous. We now have all of ourfinancial tracking and reporting, projecttracking and control, personnel records,d :cument tracking, project tost estimat-ing, and a number of other things up andrunning on the micros in a very cost-effective operation.

Match people to the jobs. I'mgoing to say two seemingly contradictorythings in this regard. One is to matchpeople to the job, and the other is tolook for opportunities to work peopleout of their specialties. Both coursesof action can be very rewarding. RoyWatson is a natural at running things inthe field. Because he does such a superbjob of it, he may never get a chanceto get out of the field. Charlie Buss hasthe ability to visualize the whole job andto structure it for development. They areboth well matched to their job require-ments, but we just do not know their fullpotential.

As an example of working peopleout of their ratings or known skillsareas, t have an employee who is skilledin operations research disciplines. He leftour company for a while to work in thecomputer industry but is back with usagain. He is an intriguing fellow andcomputer buff, and arrived on the jobwith his own personal computer setup.

14 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

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At the time we were looking for anelectrical engineer with control systemsexperience to do some work on ourconcepts for automating the boringequipment. It occurred to me die.: ourcomputer man with the operationsresearch background could perhaps helpus develop the concepts for automatingthe equipment we needed. So we puthim to work, and I have every indicationthat he will succeed at the automationtasks, with some innovative ideas asdividends.

When putting teams of peopletogether, aim to get a complementarymix. You need so many visionaries, somiry traditionalists, and so many catlysts. You really shouldn't have all ofone kind. If I were to look at the case athand, I would say that my field man is acatalyst and that the engineering manageris a combination of visionary and tradi-tionalist. The fit to team needs is rathergood in each case. Mixtures of types ofpeople also lead to conflicts. These,strangely enough, can be most rewardingif managed wet Where a genuine destruc-tive conflict exists on a job, oneobviously has to keep it from sappingenergies and destroying morale. Beyondthis, however, conflict can play a stimu-lating and useful tole if the managerengages people in a constructive manner,listens carefully, and seeks to prevent jobrelated differences from turning intopersonal animosities.

The need for ambiguity in manage-ment is one of my strong beliefs. Thismay not sound very good to manymanagement professors. Clearly definedorganizations we can agree upon as a

necessity, but personally I think thatyou never should have an organizationwhere you must depend entirely uponone route in order to get something done.You've got to have a little ambiguityto provide alternatives and a bit ofhealthy competition.

I'm sure all of you have had occa-sion to deal with superstars. The super-star is like the guy in the ivory tower whoshovels stuff out for all of the rest of usto clean up. The superstar leaves such atrail of debris that we wish we could wallhim up somewhere, anywhere, except onour job! I guess I tend to feel this way asmuch as anyone, and yet, one of thelargest jobs my company has ever won,valued at some ten billions of dollars, waswon largely through the efforts of such asuperstar. Superstars may be difficult buttheir energy and flair may at times beexactly what a situation demands.

Another rule is pretty straightfor-ward, and that is, for heaven's sake,develop people and don't hoard them! Inour business, chief engineers are famousfor hoarding their best people. They willkeep a good engineer in the same positionfor ten yens, unless he dies or moves onto some other company or becomescompletely demoralized. It is our respon-sibility as managers to try to move peoplealong, not to let them burn out and fade.People often don't know what there is todo beaides what they are doing. Most ofus have little opportunity to becomeaware of jobs which might represent abetter fit to our talents. It is an impor-tant managerial responsibility to helpsubordinates in this search.

When you hire people don't repli-

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Chapter 1 15

sate. We have a certain tendency to hireanyone who is like ourselves. If you dothat you'll probably get what you de-serve, and you may not learn muchthat you didn't know already. It is oftenbetter to look for someGne who comple.ments you. For example, I don't enjoymany aspects of financial managementvery much, though I try to understandenough not to go to jail. Because of this,I like to employ somebody who compen-sates for that deficiency in my ownmakeup.

Myths and absolute knowledgecomprise a suspect category of manage-ment lore. I know a person who has asuperb command of absolute knowledgeabout work breakdown structures, jobplanning, and execution tec..nique fa-

vored by the defense and aerospaceindustries. My friend can do anythingwith work breakdown structures down tothe fifth and sixth levels. Paper fliesaround, meetings are held, clients aresoothed, but often nothing really seemsto happen. Work breakdown structuresare fine management tools, but none ofthem have ever done the work.

When really pressed against thewall, it is amazing bow some people canbe motivated. Push people beyond theirabilities from time to time. This workswell when you take the tittle to find outwhat it is that really stimulates an individ-ual, and then find a craft or tough task totake advantage of whatever that favoritestimulus may be. Of course, there are asmany routes to mothation as there arepeople. The microcomputer gives somepeople room to exercise their ingenuityand can create both inothation and

dedication. Professional participationand papers at meetings such as thisprovide another avenue for motivation.Be wary, however, of the professionaliweting-goer.

The last thing that I had in myPhelps rules for managing creativity wiltto reflect on the fact that the pathleading to most great inventions oftenbecomes manifest only in retrospect.Insights of scientists often defy logicsimply because the process of creating, ofinnovating, is not necessarily logical.

QUESTIONS AND ANSWERSQ. After you have AI of these goodmanagerial characteristics, and you stillwant to get better, do you have a contingency policy which works if everythingelse fails? Is there something you havehidden in your agenda that you haven'ttold us yet?A; There's one person I rememberfrom a long time ago who had a way withpeople in a military setting. He used totake people who were on the brink ofdischarge due to intractable behavior orbecause they would not fit. He was aSeabee company commander who hadcome out of the east side of New YorkCity, very quiet- spoken, who never useeforce to achieve his aims. He was able toconvert these supposed incorrigibles andto reclaim them. I think he did it byrelating to them and finding what wascausing them to behave as they did.I don't know exactly what his secret was,nor how to emulate him, but I thinkif you can somehow relate to people ontheir own ground, you might -each them.That seemed to be how he succeeded. I

16 Technology Transfer; A Think Tank Approachto Managing Innovation in the Public Sector

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think about him as a person who wasable to do that more effectively thanmost of us, I may not have the patience.Q. I think you're saying personalizethe relationship. I think that's theway, I honestly do. nein an old Navyman myself, I agree with you one hun-dred percent.A: It's a matter of chemistry. Withsome people I find that I can talk untilI'm purple yet never get anywhere. If Ican get these same people into someoneelse's domain, and they can personalizethe relationship, then maybe they cansucceed where I haven't been able to.Q- And therein lies the most difficultehaller.ge of all, especially if you don'tlike the individual.A: That happens. I remember a younglady who was a pretty heavy women'srights type of person. I had avoidedhaving a confrontation with her becauseshe worked two or three levels downfrom my position in the organization.Then one day she came to see me. Iknew enough about her reputation foraggressive tactics that I didn't want tobecome entangled in any argument. I

promised myself beforehand that I wasjust going to sit behind my desk whenshe came in, and would be very nice andpleasant. In spite of my resolution,she had hardly walked into my officebefore she got my dander up. To this dayI can't explain it to myself.Q- Can you say more about upwardspirals and downward spirals?A- It seems to me that you want tomake people winners not losers. Youwant t ) give them something that theywill be a winner at, and then tell them

that they were a winner and give themthe next stepsomething within theirreach. I think of a series of wins as anupward spiral with momentum built atevery turn. Conversely, a string of lossescan lead to downward momentum and aself-fulfilling expectancy of further losses.The spiral phenomenon happens amongour friends and our families as well asamong our employees. You need to helppeople to believe that they can do shak-ing out all those reasons why they'renot succeeding. Reasons not to succeedcan be anything from illness to "I'm notsmart enough." I don't know that I haveanything to prescribe that hasn't beenwritten about, such as setting targets thatare going to allow people to succeed.Success gives us a psychological boost andallows us to put the next foot out.Q. As a functional starter, if you havea procedural kind of a thing, you canalways create something and say, "To-morrow morning we'll do this." I'vegot to have a plan for that. That gets thejuices flowing.A. I agree with Milon on this. Thereare quite a lot of people who sort ofstand back and tell everybody else howthey're doing it wrong, but who neverdo things themselves. If y ou throw themin at the deep end and push them ahit, you may be able to bring some ofthem around to acting instead of criticiz-ing.Q. You have to get people like that tomake a commitment of time and energy,and show teem how best to spend theirresources which are limited just likeyour own.A. I had a case like that recently where

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Chapter I 17

I put someone into a situation witha big challenge and thought he mightmake it. He worked very hard and turnedout a very neat but incomplete piece ofwork. It just wasn't in him to accomplisha lOgr, success. He sort of temporizedand I think he enjoyed it. I think he feltenriched and happy that he got a shot ata tough assignment, but it wasn't withinhis ability to On all that needed to bedone. As for myself, I could not bring upthe energy to try te: get a better perform-ance from him. As you said, my ownresources are limited, too.Q, You may not want to commentabout the size of the organization becauseyou had a pretty small staff in charge offield activitie.: and even in the headquar-ters work. That doesn't give you much

maneuvering room. Does it help to havea fairly large organization with a lot ofopenness and opportunities to createprojects and move them around?A. Small 'As helpful. I think with lessthan a hundred people you can getmorale going and can keep track of whatis going on. When you begin to getinto the two hundred to five hundredpeople range, it's very hard to keeptrack. The sense of intimacy on a person-alized basis erodes when you have a muchlarger organization.

it must be at least midnight inWashington, and I know that some of youstated the da, on Washington time,k..t a chance it. know some of you abit more tomorrosv. Again, thank youvery much for having me here.

18 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

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A FOCUS ON THE FUTURERoss Whaley

I must offer a great deal of thanksto Pap Phelps for his stimulating keynoteaddress last night. He caused me to havean absolutely rotten night's sleep thinkingabout what he said. On the other hand. itwas a very exciting evening in that I wastrying to relate the questions which wereasked and sent to us initially. Thequestions, which we all received in ourinvitations, were What are the factorsthat might affect the speed and directionof emerging innovation? Whrt will be theimpact on people, budgets, accomplish-ments? What are the Key policydecisions?

I heard Dr. Phelps talk aboutpeoplethe management of creativepeople. Here I am to talk about externalenvironments to that process. And lastnight I was trying to think how thesethings come together and what they havein common. Pap *Ts talking aboutcreative people and their management,the output being that of change. I, too,will b talking about change, but from adifferent angle.

One of the problems is gettingchange to the people who are the imple-menters, those who ultimately deliversomething to a customer. In In Search ofEwe !fence, Peters and Waterman discussit, and then there is the futurist literatureincluding such things as The Third fromby Alvin Toff ler Marvin Cetron'sEncounters with the Future, and JohnNaisbitt's Megatrends. All of them look

at the external environment in whichchange takes place. As I listened to Paptalking, it suddenly struck me thatmuch of the focus in the technologytransfer area is wrong. If we have aproduct, we think about the process ofgetting that product from one group offolks into the minds of others. Yet, Papdidn't talk about that process. He talkedabout people.

When you ask people to acceptchange, you're asking them to do thingsdifferently from the ways they have beendoing them, Pap mentioned that thefirst thing one might consider about kindsof people to hire in a company arepeople who are willing to take a risk.Most of us are not. It's risky business totake a risk and to hire people who Mcwilling to do likewise. So it seems to methat the kinds of things that Pap wassaying last night and the kinds of thingsI'd like to talk about, external environ-ments and how they influence people tomake change, are perhaps more importantthan the arrows that prescribe specificprocesses.

I'm not going to talk about predict-ing change. Nor am I going to make anypredictions. I don't know that muchabout the future and I don't thinkof myself as a futurist in any sense at all.I think of myself as a planner. A managerof plans, if you will. I am a consumer ofthe material we read about externalenvironment. I got interested in the

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Chapter 2 19

future because of my Interest in forecast.ing. Being an economist, and involved intrying to take a long term look at re.source supplies and demands, I began bythinking that these were very criticalparts of the manager's job. How does onethink in terns of the tong term? I wasunhappy with the job we were doing inforecasting and started to raise the

question, 'How do you make betterforecasts?"

I will begin with my conclusion.The first lesson I learned was that Iwas hiking the wrong question. The realquestion is, "How do you make decisionsunder uncertainty?" It took me some;tine to become convinced that we in theForest Service, in our assessment activi-ties, do the best job of forecasting doneanywhere. The problem is that when weare asked to look forward 50 years, all of

oar stuff is wrong.The second lesson I learned is that

in our agency at least all of our forecast.ing efforts have been devoted to lookingat resource programs and asking questionssuch as, "How much more or less of thisor that should we supply or do?" Never

did we take our forecasts and use them toexamine ourselves in terms of our ownorganizations and our people. We haveAssessments, RPA Programs, and landmanagement projects. But who is step-ping back and saying that the worldmight be different five or ten years fromnow, and what are the implications forthe way we manage things and the waywe're organized?

I shall illustrate the third lesson byparaphrasing a futurist colleague, aWashington c-ansultant by the name of

Joe Coats, Frequently, I argue anddebate with Joe Coats, but in this in-stance I think Joe said something thathas been very helpful to me. To para-phrase Coats. individuals tend to lookat the future in three ways- ( I ) thefuture is the enemychange is somethingto be avoided. By all means maintain thestatus quo: oh, for the good old days;(2) the future holds change, but not onmy watch. Yes, I recognize that change isoccurring all around us. ! am told thatthe rate of charge may be accelerating. Iread some of the current bestsellersrelated to the future. But I do notchange my behavior because I assumethat these changes are around the cornerand will not affect me personallymaybemy children and maybe my successors,but not me; (3) the future is ripe withopportunity. Those of us who subscribeto this view of the future realize that wecan know enough about it to tee useful.We can influence the future, and thoughwe will be living in a world of continuingchs.12,e, there is potential for all of us tobe better off as we respond to it.

Many fall into the first group. Mostof us, I suspect, fall into the second.We'll acknowledge that change is coming,but that it is around the corner. Howmany of us have read the books of

Cetron, and Naisbitt and knowabout the anatomy of change, but don't.change the way we behave individually,and don't change our organization northink it has any impact in our particularpart of an operation.

Few are the people in the thirdgroup who have the outlook that thefuture is pregnant with possibilitks.

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Although you can't forecast it, you canknow enough about it to influence it.The materials I have put together andtalked abort over the last six monthshave been oriented toward trying to movepeople and organization; from thatsecond group to the third group.

I shall start by considering how bylooking at the future we might improveour decision making. I shall examine afew trends into the future and thensome strategic issues. Figure 1 outlineswhat we do well in assessing the futurerenewable resources. We do as good a jobat forecasting the future as anybody inthe world. But I would also argue thatthe answers we produce are all wrong.

Figure 2 suggests areas where wefall short. In the Forest Service, assess-ment refers to a document which por-trays our long term forecasts. Oneof the things that is wrong with it, Ithink, is the implication of precision. Inall our forecasts, we insert all the caveatsabout uncertainty, and admit that wereally don't know what the world is goingto look like in fifty years. And then wego ahead and assume we do know. If youCX2111ine Forest Service assessments andlook at the graphics, you will find thatthey are all drawn with a 4H pencil. Itstruck me that we offer precision notbecause we believe in the precision of ourforecasts, but because as managers we

Assessment Characteristics

Comprehensive

From a resource standpoint

From a geographic standpoint

From an ownership standpoint

Diagnostic

Data rich

Theoretically sound from an econometric standpoint

Uncertainty recognition in that it is an iterative process

The "base case" is a good estimate of the probable future

Figure 1. What Do We Do Well in Assessing the FutureRenewable Resources Situation in the U.S.

Chapter 2 21

26

abhor uncertainty. I'm absolutely con-vinced that managers would rather havcinformation that is precisely wrong thanapproximately right. Eximples of thisare common, and relate to risk anduncertainty and our willingness to dealwith them.

Problems Facing Gcernment StrategicPlanners

My next consideration in strategicplanning, after examining the way we doforecasts in a government enterprise, is tosearch for things that influence us thatmight be different from the corporate

Assessment faults

The Assessment serves too many masters

The Assessment gives implications ,r4 precision

Econometrics is limited in long-term forecasting

The Assessment is limited as a strategic planning tool

Figure 2. Where We Fall Short in Assening the FutureRenewable Resources Situation in the U.S.

Strategic Planning Limitations

Lack of specific objectives

Mind-set of society is shortrun

Historical information represents only one pattern of events

Figure 3. Problems Facing the Strategic Planners in Government.

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sector or the rest of the world. Part ofthe rationale for the existence of govern.ment is the ability to take a long termview. Figure 3 indicates some of theproblems we face in taking that long termview. One of the difficulties of decisionmaking in government. I propose, is thelack of specific objectives. Usually whenI mention this point somebody in theaudience wants to debate with me. Theargument is brought up that we havelaws, and there is a wh ale set of laws,manuals, policies, and handbooks, all ofwhich provide us with specific objectives.Let me explain why I came to the conclu-sion that, in fact, we lack specificobjectives.

In our early efforts to look at longterm planning, some of our industrialcolleagues said, "Why don't you look atwhat we do in industry?" So 1 talkedto people at Champion International,Royal Dutch Shell, MacDonald's Hambur-gers, and an array of others trying to findout what they do in planning and how itis different from government. There aresome interesting differences. First of all,in those firms where planning is donewell, the planning organization sits at theright hand .,f the Chief Executive Officer.Why is that important? Because theplanners know where the Chief ExecutiveOfficer is coming from. They know thatin addition to the stated objective of thefirm to make money, the Chief Executivehas a whole bunch of other objectives.

For example, the planning organiza-tion knows that the Chief ExecutiveOfficer wants that :rum to be the mostresponsible environmental organization intheir industry. Or conversely, they know

that the CEO doesn't care about theenvironment-not really. Or they knowthat the Chief Executive Officer wantsthat firm to be a leader in civil rights,affirmative action. Or conversely, no, theCEO doesn't care. Must of the forecast-ing activities are done on the back of anenvelope. The presentations are aboutone page long and they deal with thespecific objectives of that Chief ExecutiveOfficer. Let me pros ide an example. It'sa small one but it surely drove the pointhome to me. I was haying lunch with BillAshley, who was then in charge ofstrategic issues for MacDonald's Hambur-gers. At the time I didn't have thefoggiest notion of what Bill Ashley andRoss Whaley would have in common. Ittook about five minutes to find out. Wegot into the subject of red meat consump-tion by the American public.

I know about red meat consump-tion b., the American public. In ourassessment, we have a whole chapterthat deals with livestock grazing. Whenyou're examining 50 years of livestockgrazing, you just start those computerswhirring and they forecast ad nauseam.From historical profiles of red meatLonsumption, you learn the relationshipsbetween age a.,1 income. Consumptionpeaked at 11S pounds per capita per yeararound 1978, then declined and if pasttrends continue, it could grow to 140pounds per capita. Bill Ashley doesn'tuse a computer. He scratches his headand says, "You know, Ross, our firm hasa major concern. There's a lot of fad-dism, IA e think, in the consumption offood. Relationships like that of food tocancer, concerns for cholesterol, nitrite in

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Chapter 2 23

bacon, and such things are probably goingto reduce red meat consumption. Inaddition, the demographers tell us thatthe average age of the population is rising,and we know that older people tend toeat less red meat than young people," Hebelieves that red meat consumption coulddrop to 70 pounds per capita.

Now what does Bill Ashley do withthat information? He simply gives itto the Chief Executive Officer of the ruinand McDor,ild's responds with a produetcalled Chicken Mc Nuggets. In contrast tothat, when I prepare a forecast, I don'teven know who the Chief ExecutiveOfficer is. Is it the chief of the ForestService? I'm led to believe that occasion-ally he and the Assistant Secretary ofAgriculture differ. I'm also led to believethat the office of Management andBudget and the Assistant Secretary oftendo not see eye to eye. I know for a factthat Congress disagrees with all of them.So who is my Chief Executive Officer?And what does Ross Whaley do when hegets into the forecasting business? I donot know whether we have ever hiflu-enced a decision in our lives with ourforecasts. As a result, the measure of thesuccess of the forecast is the elegance ofthe analysis, and not its influence ondecisions. We behave as if our clients arcthe academic community. That is one ofthe impacts, I think, of not knowing thespecific objectives of the top decisionmaker of the organization.

Let us consider the second item inFigure 3. the mind-set of society. Peopleare aware that the muid-sets are shortrun. People are aware of Congressmenbeing elected for two years and senators

for six years, and that their time horizonfocuse on getting re-elected, It is we,you know. who jam thc ink' a situat;onwhere they must perform fur withinthe context of two years or six years, orelse we're not going to elc:t the scoundrels again.

Let me give you another exampleof the short term tnindset of society.About four years ago, I was on an accred-itation visit at Rutgers University. As anexaminer ou tend to be on the campusfur two ree days and y ou spend yourtime in successive interviews with stu-dents, faculty, deans and others, one hourat a time, all through the day. Thisparticular accreditation happened onthe day of the attempted assassination ofPresident Reagan. I was in to me,Aing, hadan interview, came out, and the secretarysaid, "Oh Iry Cud, the President has beenassassinated." l went into anotherinterview, trying to have an hour'sdiscussion after having heard that thePresident had been assassinated. Obvi-

ously, it wasn't a very successful inter-view. When I came out, I found that, no,that's not what had happened. There hadbeen an attempted assassination of thePresident. The next time I came from aninterview I found that that informationwas not exactly right either. There hadbeen an attempted assassination of thePresident and he had indeed been shot.He was at George Washington Universityand the prognosis looked pretty good. Ifound that interesting because myassumption had been that this was therumor mill at work. But this was notwhat had happened. The woman w hi hadtold us of the shooting had a radio on her

24 Technology Transfer A Think Tank Approachto Managing Innovation in the Public Sector

29

desk. It suddenly struck me that evenour media behaves in a way where thepremium is on being first and fast, andnot on being right. It seems that themind-set of all segments of our society iscrammed with short-term thinking.

When we consider the length oftime involved in the research process,starting with developing a conceptand proceeding to the implementationof innovation, as ranging from seven totwenty-three years and averaging aboutthirteen, we ought to be much moreaware than we are that most of the workon the drawing boards in our researchinstitutions is not usable until severalyears from now. In spite of this, we areasking our research people to do somedevelopment that will come to fruition inan environment and a social context theyhaven't even begun to think about. We'reasking our people to be innovators whenthey are not primed to think in terms oflonger time horizons.

Alternative Long Term StrategicScenarios

Let me suggest an alternativeapproach. Consider Figure 4. I suggestthat traditionally we try to look at thecenter. We want to know what themost probable future is going to be. As amatter of fact, I began to draw mylines with a 4H pencil in terms ofa likelyworld in the year 2020, and expresslyincluded the array of possible futures thatwe may have to deal with. But I thinkit's extremely important to look at thosethings which might cause deviations fromthe foreseeable future, even though I donot know hot4 to put probability values

3 0

on them.I would argue that it is equally

important to look at the preferredfuture. What is the preferred future?What do we want our organization to hein the future? Here we come right backto Joe Coats and that third group ofpeople. There are a lot of opportunitiesand you can't forecast them. But just 'uvisualizing and targeting them, you caninfluence many an outcome. That'ssurely something to think about.

Let's then consider some possiblefutures. Figures 5 and 6 show sometrends. Don't pay any attention toindividual terms on the list. They areexamples. If we were to go around thisroom and itemize the trends that mayinfluence us, we would come op with adifferent list As a matter of fact, I'dcome up with it different list than when Iprepared these. What I'd like you to do isto consider the list as mapping a thoughtprocess.

As you see, Figt 5 contains somefairly certain trends and Figure 6 someless certain trends. As I mentionedearlier, I cannot put probability state-ments on them. The important thingis to force oneself into a frame of mindthat says, "Here are some things that I amvery certain are going to happen. If theydo, what? Do they have any effect on meor my organization? If they don't, I'llignore them." Next, look at those whichare less certain. If they're going to have amajor impact on the organization, bygolly, then don't ignore them. That,then, is the second general commentabout the trends. First, the set is only alist of examples. Second is the question

Chapter 2 25

TODAY

AREA OFIMPLAUSIBLE

FUTURES

TODAY -0111-----00- TOMOR ROW

PLANNINGFOCUS

SCENARIO

AREAOF

PLAUSIBLEFUTURES

Figure 4. Alternative Long Tenn Strategic Scenarios.

26 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

Social/Political/Demographic

1. Aging of the baby.boom cohort of the population combined withimproved health will result in a population with a higher average age, but

healthier.

2. Move to the Sunbelt wilt continue but at a slower pace than the '702 due

to water shortages and other urban development barriers.

3. Maldistribution of resources relative to the location of population on a

global level will increase international interdependency.

4 Increasing concern over health combined with an aging population will

have significant impact on attitudes toward diet and food preferences.S. The increasing importance of immigration as a portion of population

growth will result in significant changes in cultural and political attitudes.

Resource

6. The combination of agricultural exports, shortages of irrigation water, and

mining on public lands in the West will cause a faster conversion ofsouthern forest lands to other uses than heretofore anticipated.

7. There will be economic disruptions caused by temporary energy shocks of

varying duration and some locations will have absolute shortages.

Technological

S. Advances in telematics, Including telecommunications and robotics, may

cause a maim decentralization of business manufacturing and education inthe U.S.

Figure S. Examples of Fairly Certain Trends.

32

Chapter 2 27

Social/Demographic/Political

An increasing economic gap between the "have" and "have-not" nations,

combined with c shift in international political power may increase`the potential

for international terrorism and give a strong incentive for expanding domestic

capability for producing energy and strategic minerals.

Technological

Advances in telecommunications and robotics accompanied by increased

population may lead to "work" comprising a significantly smaller share of our

Biotechnological advances may produce trees with combinations of

characteristics heretofore unprecedented.

Figure 6. Extinpks of Less Certain Trends.

of certain and leas certain events.The third move I would like you to

make is rare in this kind of exercise.More important than any tatividual trendthat we might have on this list (or any listthat you might some up with), it is thecoincidence of trends. We continuallymake the mistake of looking only atchange) in technological kinds of thingstoday. Tomorrow we talk about demo-graphic kinds of changes. Then, nextday, we talk about political changes.Individually, those trends aren't particu-larly important. But start matching themup and look at the coincidences ofchanges in technology with changes indemographic characteristics, or changes hithe political scene, and then you'll fund

big consequences.A general comment I would make

before we go into any particular concernis that of the forecaster's hunulity. Someof the items in Figure 5 are demographicchimps. Predicting demographicchanges, by the way, arc what we do best.

Forecasting demographics is the easystuff. Why is that true? If you.'re lookingat fifteen to twenty yeti's in the future,most of the people who are going to bealive then are alive today. So we cancount themby sex, by race, by ethnicbackground, and all you have to do is agethem by twenty years. You then makesome assumptions about death rates,

assumptions about birth rates and

immign lion, and by and large, you won't

28 Technology Transfer: A Think Tank Approachto Managing innovation in the Public Sector

33

be far out.,

Now that I have said that, look atthe projects made in 1970 by the Bureauof Census and look at the 1980 Census.What really happened? In 1970 the state-ment was made that the average popula-tion are would be up. It happened. Butit was underestimated by several years.The tremendous health gains during the'70s caused the average age of the popula-tion to rise substantially more than waspredicted. Again, in 1970 a continuationof the movement front the North andEast of the U.S. to the South and Westwas predicted. That part was right, but itwas underestimated several-fold. In1970, it was predicted that there wouldbe a continuation of the immigrationfrom rural to urban communities. Thatwas absolutely wrong. The trend reverseditself. I don't know if the reversal willcontinue, or whether it was a flash in thepan and what will happen in the nextdeco. The point is that even thosethings we do best in the forecast businessare subject to all kinds of errors.

Now lees look at Figure 5 againand pick a couple of trends that areparticularly relevant to technologicalchange to illustrate the process. Letus consider trends 2 and 5 in combina-tion. The second one says somethingabout the continuing movement to theSunbelt. This trend is particularlyrelevant for the Forest Service. Wemanage large segments of land in thesouthwestern part of the United States.The migration is extremely meaningful tous. Be careful, however, in projecting ittoo far. It may dampen. And why mayit dampen? Why do people move from

the Northeast to the Southwest? Part ofit was due to the weather. Part of itbecause of the hold of unions on theNortheast, Part of it due to the crimerate. Part to the congestion. The point ishow long will it take until the combina-tion of the shortage of water in theSouthwest, combined with the change inthe social climate which will make thecities in the Southwest very much likethose the people were escaping frombecause of -,tion, unionization,and crime t. .es the trend? Themigration is almost sure to slow downand reverse itself. But it is almost certainto continue for a while.

Another thing of interest resultsfrom a combination of item 5 in Figure S,immigration, with the trend of movementto the Sunbelt. These two items have, Ithink, a great deal to do with each other.If you consider the demographic projec-tions for the next 10 to IS years, about25% of our population increase willcomefrom immigration. This country origi-nated from immigration. What's thechange? I believe it is a substantialchange. Immigration in earlier years ofthe Irish, Italians, Poles, and Germans wasto ghetto settlements in the Northeast.You will still find remnants of the Italianghetto, the Irish ghetto, the Polish ghetto,and so on, in renovated Northeasterncities. In the ghetto, people need thecomfort of being with others of their ownkind. When "junior" came home fromschool, reverting to the frmlly Italian,mother would say, "We're Americannow,speak English." The immigrants flewAmerican flags on Flag Day and wantedto get Americanized,

34

Chapter 2 29

We don't even know the magnitudeof the current great crush of inflow ofnewcomers because of illegal immigra-tion, but it is estimated at somewherebetween 500,000 to 1,000,000 people ayear. The immigration occurring nowseems to be different from earlier immi-gration. There are pressures to maintainand perpepuate culture, to maintain andperpepuate language. Look at the bilin-gual education provided in southernCalifornia, New Mexico. Arizona andTexas. By the way, I am not in any waytrying to suggest that the form of irnmi-gration taking place today is any worse orany better. I have yet to form an opinionabout that. I am simply trying to pointout that it is different, and that we musttherefore expect different impact.

On the positive side, we may seeNew Mexico, Arizona, and southernCalifornia culturally enriched. Anotherpossibility is that the area will becomethe Quebec of the United States. Texas iscurrently 24';'re Hispanic. New Mexico is, Ithink, 37% Hispanic. I don't know whatthe percentage is for southern California,but I suspect it is of the general magni-tude of Texas and New Mexico. hi anycase, there is no question but that singlelargest political block in the southwesternUnited States is Hispanic.

I mention the demographic shifts tosuggest that the management of ourorganizations, how we deal with innova-tions, indeed, the whole context in

which we are going to operate is going tobe different. I predict that it WO nottake 30 to 40 years, but will be different10 years from now.

Let me mention another trend. one

that will enable nic to make a linkagehere between a fahey certain event andone that I am less certain about. italso hae to do with be way we organizeour agency and deal with innovations.

am referring to the maldistribution ofresources internationally. In termsof thinking about the future for thisagency, I would argue that historicallywe have ignored the re et of the world.Oh yes, we have an international forestryorganization, but I think we ignore therest of the world in managing our forests.Is that all right? So far it seems to havestood us in pretty good stead. Therehasn't been a problem with it. Is theregoing to be a change? I have a terribletime dealing with that question. Thereason that I have a terrible time dealingwith it is that I can cite you all kinds ofdocuments, some 15 to 20 years old,some quite new, all of which come to theconclusion that resource scarcities on theinternational front are going to be sosevere that they're going to have majorimpacts on the world. I can even showyou documents that say that the decadeof the '80s is going to be pivotal in thisrespect. In fact, by the end of the '80s,were going to see a whole new perspec-the on resources, dictated dominantly byinternational shortages.

There is a dilemma, however. Forevery one of those publications, I canfind you another one that says, "Nosweat." For every Dennis Meadows andhis Limits to Growth, I can fmdHerman Kahn who says that its not aproblem. For the Global 2000 Reportput out under the Carter Administration,there is The Global 2000 Revisited

30 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

35

differentiate between voices. If you triedto say the same thing as the "owner" ofthe slot, your voice would not give youaccess to the parking place. The chip thatperforms this will handle up to sixteenwords. The price of that chip is S13.

Let us consider an issue among theless certain trends. Consider the case ofmaldistribution of resources on an inter-national front from a political perspec-tive. Is there any reason to believe thatthe gap between the have and have-notnations, which is increasing, could be thevery thing that prompts internationaldissension. Is it not true that the devel-oping world is gaining political clout?1 could cite several pieces of evidence.One of the most obvious is that of theUnited Nations. It commenced with 28signatories and now there ay. 154. Out-side of the Security Council, the UnitedNations is run by the developing nations.Consider the programs of FAO and theWorld Health Organization and UNDP,and others, and you will see that they Sowhat the developing world wants them todo. I'm not sure that is necessarilywrong, but it certainly Plstrates a changein the political clout within that organiza-tion. Consider also that countries likeIran can bring the world's most powerfulnation to its knees through terroristtactics. My technological friends herefrom the Defense Department probablyknow much better than I that the poten-tial for development and use of small-scale nuclear weapons is not farfetched atall. In fact. I am led to believe that areasonably well-educated PhD student innuclear physics is able to put together asmall-scale nuclear weapon.

1 ant making no prediction thatinternational terrorism is going to be amajor problem. 1 don't know. I amsaying, however, that if I am right in myconcerns over the maldistribution ofresources, if there is a relationship be-tween terrorism and people's claims onthe resources of the world, the growingpower of the developing nations throughterrorism or through political clout issomething that even organizations likethe U.S. Forest Service can ignore only attheir peril. We may never have thoughtof ourselves as being in any kind ofinternational political arena, yet I am surewe will be impacted by it.

If I had the time, I would nextdiscuss the question of "so what?"Figure 7 deals with strategic issues. Itried to look at the trends, and fromthere, attempted to identify what thetrends mean to an organization in termsof change of management style, in termsof the way we treat people, or the waywe deal with innovations. We are in theraids; of transitions to which we willhave to respond. What trends we accept,and what we reject will affect how weoperate. I am going to stop now andentertain questions. But feel free tochallenge, rebut, debate, or make anykind of comment you choose.

QUESTIONS AND ANSWERSQ. Why did you say that you don'twant to predict that terrorism is going tobe worse than it already is?A: Rather than say that we as anagency are going to have to deal withterrorism as is happening in the MiddleEast by 1992, I would prefer to stick

36

Chapter 2 33

to some things I am fairly sure of. I'mnot sure where it will be. I'm not surewho the actors are going to be. I'm onlyfairly confident that it will have a majorimpact on this agency. I would arguethat in some of these forecasts, the degi.,:of uncertainty may have more of animpact on management decisions than theabsolute level of the forecast, I referback to Bill Ashley and the MacDonald'sHamburger. He doesn't know what'sgoing to happen to red meat consump-tion. But there are certain managementstrategies that can cover consequences ineither direction.Q: Isn't the trend toward no middleclass majority in the United States, andmore and more people with money goingto cause more division so that the preser-vationists are going to be stronger andstronger?A. Let me make two comments. First,about the environmentalist thrust. Someof us who have seen the heyday of theenvironmental movement in the late '60sand carry '70s may have come to the

conclusion that the thrust has weakened.I would say nonsense. A good share ofthose people who were carrying placardsin the early '70s now wear pinstripe suitsand ate in the halls of Congress and inbusiness. Although perhaps more subtle,the thrust is now much stronger.

Second, about the issue of themiddle class. There are some thingsabout it that worry me a great deal,although I will admit I haven't thought itthrough. Along with the changingtechnologies, society is becoming moreand more sophisticated. If you discussunemployment in the era of telecommu-

ideation, somehow the implication is thatjobs are going to be there, but they'regoing to be different, certainly moresophisticatesi than putting hubcaps onFords by haw'. If that is true, then Ithink I see anothtr thing coming. Therehave been three major reports during thelast year which talk about the quality ofeducation in this country. All say thatit's dismal, and the elementary andsecondary levels are getting worse. l'veheard that some of those studies are bad.Nevertheless, there seems to be agreementamong those studies showing that theoverall quality of education is poor. It isinteresting to me that if I look at my kidsand their friends, they strike me as beingbrighter than I was when I got out ofschool. In math, in science, in political af-fairs, and in any other dimension, theyare much more sophisticated than I wasat their age. Now when I checked withmy colleagues about their kids, everyone,without exception, told me that verysame thing. If that is true about onesubset of society and if the observationsabout the deteeiorating quality of educa-tion are right, it seems that the other sidemust have a bunch of unfortunate kidswho can't add or can't write. And whoapparently, can't balance a checkbook.That makes me nervous.Q: You're mixing a couple of thingshere. You're talking about standards ofquality. When you were .1 child, youwere exposed to "X" amount of informa-tion. Knowing your ability now, youprobably absorbed a large amount ofthat. For your children, the amount ofthe information provided is "X plus agreat deal." The studies you referred to

34 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

37

are reporting the percentage of that information your kids are absorbing. Ouryoungsters are certainly exposed to a lotmore information and may enn beabsorbing more, but still a very smallpercentage of the total information.all relative.A. I agree with you. But I contendthat even if the studies that have beendone of the educational system are rightin assessing the ability of these studentsin very rudimentary skills, I would stillmake my same case.Q: The skills you referred to put acertain value on reading, writing, andarithmetic, and being able to speak. Myyoungster may not be able to do anythingelse, but he can run a computer. Whatvalue do you put on running a computer?What are the _kills that will serve theseyoung people best? There is a gap butwe've always had that gap. Our concernis that there are more people in the lowerend of the distribution than there werewhen you and I were in school.A- Okay, your analysis, I think, isbetter than mine. The conclusion,however, is the same.Q. I'm not arguing that. The demandsfor jobs by that segment of society aregoing to be very large. When the Presi-dent says that there are 90 pages of wantads so there is no reason for une-mploy-ment, is he really talking about the tailend of the curve? There could be 200pages of jobs which these people are notgoing to be able to qualify for.A- A better analysis, an interestingspectre is still before us, relating tothe distribution between education andincome, and what is happening to the

middle class. Is there any reason why it'sflattening out?Q. Statistically, what have we definedas the middle class? We have just rede-fined what poverty is. Also, consider thatit is much better to be poor than it usedto be, and that the motivation to getaway from the lower tail of the curve istherefore not what it used to be. Peopleare not so likely to die when staying atthe tail end. Also, in some ways it ismore difficult to escape.

May I change the slant of thisdiscussion? You said that kids aregetting beighter. They're definitely moreinformed. The..-'s a lot more inform*.tion. But also the world is getting farmore complex and requires a lot morebits and pieces of information. Perhapsthe ratio of information required toinformation absorbed in the formativeyears isn't much different for the genera-tion today than it was for our generation.I wanted to question you on your open-ing statement. Do you see the role ofpeople like yourself in your organizationincreasing? I am perfectly content to seea simple-minded linear extrapolation ofthe past become the standard thinkingpattern of the average employee. But itshould happen at that level before we getmore involved with all of the economet-rics that you amuse yourself with.A. I will make two comments aboutthat. First, regarding the quality of theforecasts. oat group of people, morethan any other, have entered the forecast-ing business. They are the economists.They do a very simple-minded thing.They discern a relationship between somedependent and several independent vs/is-

38

Chapter 2 35

bles, make some assumptions, calibratethem over historical data, then say thatbetween these driving vsr;able... and thisresultant variable, these typ,:s of thingstend to happen. TN. easiest Wki to makea forecast is for the next four to fiveyears. People don't hire to change. Weinstitute by laws a whole bunch of thingsthat are going to reinforce the saktus quo.The problem is that you then make themistake of taking that information andextrapolating out another forty years.And that's absolute nonsense. Unfortu-nately, there are all these screwballscalled futurists who are telling us how todo it. I think about 85% of that material

is garbage. To me, the key to the wholething lies with the people that Pap talksaboutrick I don't like some ofthe material in Peters and Waterman'sbook, but one thing was very, very good.They made the point about people notbeing interested or willing to take risk.Don't expect anybody to take rises.;,.

None of us want to. The successful firmsare not simply lucky in hr,hig on board abunch of risk takers. Rather, the manage-ments of there firm: have turned itaround by making it risk; ,tot to takerisk. In other words, there a payofffrom being a gambler.

Recommended ReadingsIntroduction to Future's Analysis

GeneralMeadows, Done lla H. and Dennis L., et. al. Limits to Growth. (Potomac

Associates. Washington, D.C. 1972)Bell, Daniel. The Coming of Post-Industrial Society. A Venture in Social

Forecasting. (Bask Books. New York. 1973)Henderson, Hazel. Creating Alternative Futures: The End of Economics.

(Berkeley Windhover. New York. ;978)Toffier, Alvin. The Third Wave. (Bantam Books. New York. 1980)Cetron, Marvin. Encounters with the Future: A Forecast of Life into the

21st Century. (McGraw-Hill. New York. 1982)Naisbitt, John. Megatrends; New Directions Transforming Our Lives.

MethodsMeadows, Done*, et. al. Groping in the Dark: The First Decade of

Global Modeling. (John Wiley & Sons. New York. 1982)Ayers, Robert. Technological Forecasting and Long Range Planning.

(McGraw-Hill. New York. 1969)Armstrong, J. Scott. Long-Range Forecasting: From Cryatall Bat! to

Computers. (Viaey & Sons. New York. 1978)

36 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

39

GETTING MORE DONE WITH LESSRichard C. Fay

I enjoyed the talks by Pap Phelpsand Ross Whaley. Its difficult to followtwo talks which were so impressive.

Once I had the opportunity tomake an ad-lib speech. We had to drawcards for the subject. It was a day licetoday when speakers had taken morethan their share of time. I was the lastspeaker and had to give a speech on thesubject mentioned on the card. I lookedat the card which had only one word onitsex. I said to the audience, "Ladiesand gentlemen, it's a great pleasure." Theroom erupted into applause and that wasthe end of the speech.

When I was approached aboutmaking a presentation to this group, Ithought that we would be talking aboutsomething lace the "Small Business Inno-vator," or "Project Management," or"Flow to Get Things Done Quickly," or"What Does It Take To Be a CapitalistWhen You Don't Have Anything To StartWith?" Subjects that I know somethingabout. Then I received the program fromJohn Vance. It said, "How to Accom-plish More with Less." I thought, "Mygoodness, if you stand in front of a groupof government people and talk about howto do more with less, that's got to be themost offensive thing anyone could do!"This is just a terrible topic. But it is achallenging one and it is one that I knowsomething about.

Ross Whalcy made some pointsabout demographic and technological

trends and I propose to return to a coupleof them. I cannot quautifv them becauseI'm not in that business., out would lilceto consider some of the things that aregoing on. Let's talk about feeding anenormous new world population. Howbig is that population? Over the next 10to 20 years, we're talking about feedingmore additional numbers than the entirepopulation of the world just prior toWorld War IL Not only are we talkingabout doing more in terms of feeding allthese people, but we're talking aboutdoing it with substantially less. We havefewer available chemical fertilizers, fewerbiological agents and insecticides. Weretalking about doing it in a tremendouslymore difficult way because of socialrestrictions.

In the next 5 or 10 years, we willprobably produce twice as much fromour national resources than we have inthe last 100 years. But we must do itwith less contaminant wastes. We aretalking about raising the living standardof the world without having a war overthe allocation of resoun We're talkingabout providing jobs without havinginflation. In everything we do, we arecompelled to take account of the conse-quences of the action.

Doing more with leis is not just atopic of interest for this group of people.It is not a contemporary subject forforesters or any other individual group.It is a contemporary subject for the entire

40

Chapter 3 37

world. It is what the world is abouttoday. doing in e with lest. The peoplewho ctri do more with less as going to bethe people who are on the cutting edge.

Generally, these people have names.We've heard of some of the names in the

preceding talksinnovators, entrepre-

neurs, self-starters, go-petters, doers.People who do more with less all havesuch names. What they do is of greatvalue. Creativity is the enhancement ofvaiue. Entrepreneurship is the creation ofvalue. Innovation is the identificationand establishment of value. All of then:have to do with creativity. I would liketo emphasize the issue of creativity a

little stronger than Pap Phelps. Creativityis something that everybody has becauseit is right at the heart of the human being.The creative process is the central iden-tity of the human being. In my opinion,the most important thing in the creativeprocess, more important than people,more important than management sys-tems, and more important than style, isthe ethical conviction of the person. theability of human beings to look at them-selves, come to grips with the ethicalissues in life, and classify what will bedone and what won't be done accordingto central convictions. Ethical perform-ance must be something that people canlive with, that they can be proud of.That they can reconcile for themselves.The ethical conduct of the individual ismore importaat than anything else.

I ceetainly don't want to presumeon anybody's religious beliefs or any-body's ethical concepts. I want to layoat, simply, something that seems toappear in most philosophical systems.

There seems to be a concept of feedbackattached to most philosophical thought.Such things as a stress on creative life andliving guidelines provide examples. Thereis stress toward being reborn, towardfeeding forward. Among all people thereis stress NI creativity because it is thecentral part of the human experience.The ethical concepts that support thecreative process are the most importantthings that can be presented to anybodyin considering creativity.

One could speak at some length onthe stimulators for creativity. I havejotted some of them down. The dailydose of risk, independence of life, respectfor details, self-confidence, respect forpriorities. At the heart of the creativeprocess, the very central point of thecreative process, is the identification ofopportunity.

The Identification of OpportunityLet me say at the outset that I

retired from the Federal service in 1973.I entered the Federal service in 1941 andspent approximately 33 years workingfor the Government. Since then, I havespent 10 years as a private capitalist. Mymost salient observation of the govern-ment services is that nowhere are theremore committed people. Nowhere arethe people more uniformly honest.Nowhere are the people more trustwor-thy in terms of their careers, their profes-sional vocations. Public service is charac-terized by commitment, trust, and

integrity. It deserves to be recognizedthat way and described that way.

On the other hand, we have indus-try, We have laws. We have legislatures

38 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

41

and a judicial system, and we haveresource limitations and taxes. We alsohave government agencies which may belimitors or stimulators.

All of these contribute to theenvironment for creativity. ConsiderFigure 1, The Environment for Creativity.Consider the crowd over on the leftmade up of industry and the businesscommunity. It has a fairly simple roleand is specialized to enhance production,identify opportunities, capitalize onthem, and make them profitable. Thegroup as a whole exists to make a profit.Specializing tends to enhance production.

In the upper center, the legislative-judicial group is generally concernedwith the codification process with whichto describe our ways of life and thedistribution of risks which are createdwhen individual entrepreneurs or capital-ists operate. They provide the con.straints. And one of the constraints is toobtain from all of the peo?le the moneyto provide for the common defense toensure the general welfare to provide fordomestic tranquility, and to ensure theblessings of prosperity upon the whole.

The lower part of the centralsegment in Figure 1 is occupied by

Industry

Identify opportunities

Specialize to enhance

production

Capitalize

Government Constraints

Legislative - Judicial

Codification process

Provide constraints

Make a profit Agencies

Translate concept;

to doable things

Identify concept

opportunities

Maintain high

accountability

Taxes

Resource limitation

Outside environment

Figure 1. Environment for Creativity.

Chapter 3 39

42

government agencies. Government agen-cies are generally involved in takingfairly high-level systems and concepts andtrans/siting them into performance-centered du-able things. When somethingis contracted out to industry, it is usuallycontracted out as something to buy or asa service to be rendered. The creativeprocess of providing the integrative designbetween the requirements of the peopleand the performance centers, principallyindustry, is based on the excellence of thegovernment agency system design. Forinstance, the government buys electronicwarning systems. The military organiza-tions then use them to provide for thecommon defense.

In identifying opportunities,government agencies have vertical budgetlines and very high financial and opera-tional vertical accountability. Why mustthe vertical accmmtability be high?

Because the most important characteristicof many of the government functions isthe trusteeship for the people. The

government agency acts as a trustee.People who are trustees are good atstorekeeping. They are good at account-ing. They arc good at explaining. Theyare good at keeping track of things. Theyare good at allocating, if they know inwhich direction to allocate. Trusteeshipis a very special and important function.

On the other hand, governmentagencies are expected to accomplish amission. Mission statements are oftenacross organizational !wets. At eachcrossing, the interaction L. a place wherean opportunity might occur. Consider

Figure 2. Opportunities for Creativity.After the leaders or d'ie charter of the law

have laid out the mission statement,which crosses every organizational ele-ment, the trustees enter into dialogueabout the allocation of resources at everyone of the crossing points. The dialogue,heavily oriented up and down along withaccountability, is normally very restric-tive. This causes it to be very difficult todo things horizontally, to go from oneaccountability crossing to the next, andto start in on mission accomplishment, Itdoes not matter whai is being movedacross the vertical lines, whether it's anew forestry product, a new academic orteaching device, or a new tool or ma-chine. At each node there is conflict.And because there is conflict, these crosspoints become opportunites. Those wholive on the cross points, and that reallymeans everybody in a organization, havean opportunity to be creative, to assist

the flow, to contribute change or contri-bute in any one of a number of otherways to help in the mission accomplish-ment.

A problem arises, then, as to howgoals should be identified a, i established.The organization sends the mission

statement across the organization. TheChief announces all the mission state-ments so that in a hierarchically estab-lished organization, goals are normallyquite heavily oriented from the topdown. The Chief says, "Do this." Every-body breaks it up into pieces and says,"Ill do this." And things become quitecountable and visiblt because they are thebasis of grade determinations, promo-tions, and everything else. On the otherhand, if the Chief should say, "The majormission accomplishment is so-and-so, and

40 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

43

everybody here has an opportunity tocontribute," then the goal process shiftsto a more democratic base. That demo.erotic base is much more likely to in-crease the identity of individual goals andprovide an individual creative oppor-tunity. The top-down goal settingprocess will usually produce countableperformance oriented goals. The bottom.up goal origination process will producecreative opportunities and innovationprobabilities.

The greater the depth of the organi.

zation, the more rigid and procedural thevertical accountability lines become. Forthis reason, there is less likelihood thatthe creative process will emerge. Thetrustee force in very deep organizationstends to be go constraining that fundingwill not be available or will be eaten upby controls. Funding for opportunity willbe less available for the creative goalscoming from the bottom up. From emanagerial point of view, one should in-sist on the trustee -type of operation when

CONCEPTS

BUDGET

R&D

ACQUISITION

PRODUCTION

DISTRIBUTION

MISSION

Figure 2. Opportunities for Creativity.

44

1011 1111111111M

Chapter 3 41

engaged hi ,-ontrolled, repetitive opera-tions. In the private sector, we refer tothings like that as "cash-out" when we'restripping the operation. As you increasethe performance requirement, you tendto level the money, for as the perform-ance goes up, you dray out the cash. In

a case, whenever you want a sourceof cash, you set up the operation, makesure that everybody has a defined job,that they do it, make sure that they havespeed-up goals, and make sure you takethe money from the organization.

On the other hand, if you wantinnovation, you flatten the organization.Flatten it as far as you can. Innovativeorganizations are characterized by beingflat. There's the boss and there are thedoers, and all kinds of organizationalvariations. There are matrix variations.There are economists and planningagencies that report to the Chief. Buteverybody in an innovative organization,a creative organization, is operating in anenvironment where the leaders and doersare not far apart.

Now let us consider Figure 3 withthe two organization char.'s. Over hereon the (A) side there is a 'Loss, and veryclose to him you have many people.Now over here on the (B) side, mostpeople are isolated from him. On the (A)side, you have creativity. With an organi-zation chart characterized by few specificresponsibilities, people are changedaround. You take dollars and perform-ance objectives and move them frompeople to people and take advantage ofthe characteristics of the individualpeople to do diverse things. When thevarious things that they are engaged in

become do-able, manageable, repeatable,you move back over to the (B) type oforganization.

Now in Figure 4, let us considerrisk in terms of time and developmentcosts. At the start, development costs arehigh and risk is high. As the systemmoves over, risk becomes more and morecalculable, and unless you have some sortof mechanism for managing it, you getinto trouble quickly. Most businessesneed to have a risk assessment process.Once the goal identification has occurredsomewhere in the organization, theprocedures systems must be identifiedand desribed. Then a risk assessmentought t.) be made. One step is to estab-lish some event probability and another isto establish event consequence.

In most situations, government orbusiness, and particularly in small busi-ness, the most important risk that needsto be assessed is the financial overrun. Inmature organizations, you can only milkthe cash so much as you move over to-ward the more vertical type of orgariiza-tion. Normally there's a bleed when youdo it, because of things called take-homepay, fringe benefits, tax-reduction neces-sities, and so on. Overruns are scary,And they must be assessed. The innova-the manager must pay particular atten-tion to the probability of an overrun.

You can have overruns in time, inschedule, in costs, and in quality. Mostmanagers, particularly those managinginnovations, are very likely to optimizethe schedule (costs, time, and quality) infavor of the project. In such a case,quality reductions, schedule aberration,dollar overrun, and time threats must be

42 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

45

guarded against with great care. Amanager is sitting on a time bomb if thesethings get out of hand.

Now suppose the probability ofperformance on schedule, plus or minussix months, is 0.8. If you want to raise itfrom 0.8 to 0.95, you are fundamentallytalking :sbnut a revutes allocation. Thatresource allocation may be in terms ofother people, it may be in terms of dol-lars, it may be: in procedural exceptions,or it may be in terms of almost anything

that you can quantify. This procc s ofrisk adjustment leading to risk quantifica-tion is the absolute ceitral part of manag-ing creative people. The product of riskanalysis is goal modification. Thesemodification:, can go up and they can godown. The insult of the goad modifica-tion and the risk analysis is a highlyfocused opportunity. Failure to takeadvantage of this focused opportunitycan cause heads to roll.

A

B

Figure 3. Organizational Creativity.

Chapter 3 43

46

DEGREEOF RISK

DEVELOPMENTCOST

RISK

TIME

UMW

.100

Figure 4. Risk Management.

But gill, the most importantcharacteristic of innovative organizationsis that they have a clear view of their own

ethtal sts :dards. They have sharpperceptions of the goals that they aretrying to achieve, and they are beingmanaged by somebody who understandsthe processes and production of creativework. In order to get things done,consideration of the quality of life is

perhaps the most important thing.How do you assess the quality of

life? If filling out the forms that youhave to fill out to get a $10,000 capitalpurchase is harder to do than to give anin-step increase to an employee, then youhave an organization which is really

screwed up in terms of quality of life. Ifyou can't help the people get the tools toget the jobs done which they are requiredto do, you aren't going to get anything

Lccomplished.People today are interested in the

quality of life and we are operating onan assumption that there's an unlimitedsupply of people. Somebody has toldus that the war babies are having childrennow and that there are lots of peopleavailable for organizations. Well, the factis we're only about five years away fromold people selling hamburgers at Mac-Donald's instead of young people becausethere isn't going to he a high continuedinput into the work force.

Another consideration when think-ing about the innovative process is thatin 1981 and 1982, the number of smallbusiness failures was probably the highestthe country has ever known because ofthe recession and difficult times. Manyof the innovative people, the doers, the

44 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

47

system for instantaneous correction ofany forest devastati &n.

QUESTIONS AND ANSWERSQ: I have a question concerning thepoint 0.8 or 0.95 probability you referredto earlier. Is this a product of humanjudgment or does it result from a study oftime and motion and previous events sothat the precise variation can be deter-mined?A: It can come from the assessmentprocess, however you have designed it.The assessment process can be based oninterviews, judgments, on statistical ex-perience, or almost anything. It's aproduct of your risk assessment analysisby whatever method you use. It couldbe, for instance, the MacDonald's ham-burger manager acknowledging the exist-ence of a problem, and the subsequentdecision to start selling chicken. Or it canbe a very detailed analysis of data.Smaller businesses mostly do it by theseat-of-the-pants. In a small business, youcan tell that your risk assessment processis deficient when the banker calls andwants your car, besides your house, onthe line.

entrepreneurs, fled into stable organiza-tions. With just a little bit of an upturnin the economy, those entrepreneuriallyinnovative, creative men and women aregoing to migrate the other way. Theywant to be in charge. They want to havetheir own businesses and do their ownthing. They want the ultimate fiatorganization.

Innovative, high-result organiza-tions ate going to come up with sometremendously exciting ideas. One type oforganization right now is the so-calledRDLPM (Resource and Development,Limited Partnership). This is fundament-ally the concept of the general partner,limited partner, and producing organiza-tion working together. Such organiza-tions working with big organizations,such as the government, through partici-pative agreements, advisory agreements,and grants can greatly increase theprobability for creative requirement iden-tification and creative accomplishment.

To bring this down to basic terms,somebody like me, who fundamentallydesigns electronic warfare systems, missilecontrol systems, and things of that kind,will now be able to come to you with thedesign of the satellite blight recognition

48

Chapter 3 45

POTENTIAL CONTRIBUTIONS OF EDUCATIONTO TECHNOLOGY TRANSFER

Arthur Wilcox

The potential contribution ofeducation to emerging innovations mustcenter around a university's primary mis-sion in the American scene. That missionis to bring order to produce the best pos-sible future leaders of our world.

We are, in fact, in the technologytransfer business, prime agents in passingon to the future the best values of thepast and present. One of our major con-tributions to innovation is to refine newknowledge and make it more efficient.To paraphrase Matthew Arnold, it iscarrying from one end of society to theother, the best knowledge, the best ideasof our time; to divest knowledge of allthat is harsh, abstract, professional andexclusive; to humanize it and make itefficient outside the clique of the learned,yet remain the best knowledge of thetime. Hopefully, universities are in theforefront in developing new innovationsin communications to an ever broaderspectrum of our society. We do haveproblems, however.

Universities, like other institutionsin America, are in constant turmoiltrying to meet the challenge of thegreatest knowledge explosion in history,and concurrently, the greatest technologyexplosion in history. We find ourselvesgrasping for the right straws in a sea ofnew knowledge that demands to berecognized as a necessary part of univer-sity education, both liberal and profes-sional. The challenge is confounded by

dramatic changes in the whole area oftechnology transfer; communications be-tween the university and its clients.

We have the same problems as dobusiness and government in makingchanges. There is the tendency to goslowly anti be too conservative becauserisk is more difficult to handle thankeeping the status quo. Few people lookforward to change unless change iscomfortable, and this is seldom the case.There is the problem of buying expensivehardware to keep on the "leading edge"of new technology, only to find it obso-lete at a time when funding for highereducation is at one of its lowest points inour history. We are subject to the pres-sures of cyclic politics in spite of themyth that education should be detachedfrom fads and mimdane, pressures.

How, then, do universities contri-bute to our interests? I suggest twoareas for consideration: First is thetraditional university campus-centeredprogram. Second is the rapidly growingarea of off-campus extension programs,"outreach education."

Traditional EducationPerhaps we will never solve the

academic conflict between those whomaintain that a university's role is toprovide a broad liberal education andthose who insist that professional com-petence in some narrow field is an essen-tial requirement of university education.

49

Chapter 4 47

We try to do both. And in both areas,the "essentials become more numerousand increasingly complex. To many of usin the professional schools, our challenge

is to strive continually to defuse thefundamental principles that affect ourprofessions and refine the great mars ofknowledge we have at our fingertips intothe most effective teaching package."Back to basics is a popular expressionthat goes far past the three Rs. Perhapsbetter, we strive to go forward withfundamentals.

:n this environment, there are manyproblems where you as field professionalshave an interest. One of the most worri-some is a tendency to neglect history as abasis for training future managers. In aneffort to be up-to-date and on the " -ra-ting edge" of our times, we forge: therole of historical perspective in successfulmanagement and mature leadership.

For those who aspire to becomebroadly based resource managers, we aresadly lacking in time to contemplate, tobring together the many snips of knowl-edge gleaned from brief exposure tomany disciplines. We are only nowbeginning to put the computer intoproper perspective as a tool of manage-ment and science rather than an all-pervasive subject for study. We arecontinually concerned with balancing theneeds of huge organizations like yoursagainst the multitude of smaller organiza-tions whose resources, and thereforeneeds, may be much different fromyours.

We are concerned, are we trainingtechnicians at the expense of educatedcitizens? Can we do both?

To what degree do we study indepth such political waves as privateinvolvement in public service, or currentbut ever-changing management practices"

Is there some merit in emphasizingthe American rather than English lan-guage? If writing is important, howabout drafting and graphic skills"

There is no question that ourstudents today are smarter than theirpredecessors. Are they more intelligent"They have infinitely more varied back-grounds. Some have superb training inscience and computer skills: others havelittle. Can we analyze these c 'ranges fromthe past and change our own workaccordingly?

In our professional theater, threechanges seem most important althoughthe success of change varies greatly. Themost obvious is competence in moderntechnology for field application. Thisranges from computer skills at severallevels, from office records to multipleresource decision management and com-puter mapping, for example. Especiallyimportant to the natural resources field,where public involvement has become amajor fact of life, is more emphasis onpublic relations, communication skills.political science, psychology, and socio-logy.

Finally, there is a realization thatthe modem resource manager can ill

afford to be egocentric in the midst of amultitude of sophisticated professions.The importance of understanding therole, if not the content of many specialityareas, makes personal information storageand retrieval systems an integral part ofmanagement training, and a major unify-

48 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

50

ing brave in training.

Universities have another role inputting new ideas and innovations intothe field. That, of course, is research.Cooperative research is very much part ofyour game plan and its value has beenRemonstrated for years. At the risk oftalking to those who seem to have (orhad) the unlimited resources of biggovernment, universities in Americaideally combine the broadest range ofinterdisciplinary skills with the innovativepotential of academic freedom andthe huge investments in high technologyequipment necessary to make majoradvances in innovative technology.

University Continuing EducationPrograms

The second broad area of universityactivity, and one that has more directvalue to the professional fields we serve,is off-campus continuing education.

One of the most significant changesin American education, brought about byour massive growth in knowledge andtechnology, is the idea of lifetime learn-ing as an essential part of Americawde.State universities have had extensionprograms since their beginnings over acentury ago. A wide variety of continu-ing education courses, short courses, andintensive post-graduate training courseshave been common in many places formany years. One of their greatest valueshas been to maintain close communica-tion between the university and society ingeneral. All of these programs areexpanding at a tremendous rate inresponse to demand and the opportunityto use new and innovative communica-

tions technology to relch more peoplemore effectively.

For many institutions, this growthin decentralized education to try toserve every nook and cranny of societyhas been the largest area of growth inthe last decade. All kinds of new tech-niques for getting the message out arebeing tried. Some are now an integraland stable part of modern educationalcommunication. Occasionally, we seemto have made a cult out of the methodfor its own sake. A well worn and provenexample is the use of standard slides foraudio-visual for the amateur and profes-sional alike. They have all the character-istics required to get a message through:uncomplicated procedures, standardequipment, appeal to several senses, lowcost, and relatively foolproof operation.

Yet recently, I saw two examples ofenthusiasm for the medium carried toofar. Both were twehe-screen slide presen-tations. In one case a simple error inprojector adjustment effectively ruinedthe show. In another, a minor break-down closed a public information centervisited by hundreds of people for severaldays until an expert could be brought tothe scene. In one case, our office devel-oped a complex audiocassette trainingunit. We found that the people we wereserving would much prefer scanning thewritten word to listening to a long tape.Then, only a short time later, the video-tape made this procedure almostobsolete.

One of our biggest challenges is tocapture the right technology for our use.In this we tend to be follow-As ratherthan leaders, and depend on industry-

51

Chapter 4 49

funded mend to come up with newways to get our message out to a bewil-

dering array of potential customers. In

our own situation, we have had a substan-tial menu of technology transfer methodsfrom which to choose. Most of them areuseful in solving specific problems. Manyof them are rapidly making it pcssible forconsortiums of educational institutions tocombine their resources.

I. Audiocassettes. Already a bitold fashioned, though inex-pensive, they use only thespoken word, and lack theglamour of new methods.Many users prefer the time-efficiency of the writtenword. Few will argue thatnewer methods fortify theold saying that one picture isindeed worth one thousandwords.

2. Videodiscs and video cas-

settes. Availability of play-back equipment is rapidlyceasing to be a problem.These are relatively inexpens-ive and easy to get to theuser.

3. Computer-aided instruction.This use of computer-gen-erated instruction is wide-spread. Over 100 engineeringcolleges use the PLATOcourses for undergraduates.

4. Telephone and audio-telecon-ferencing. The University ofWisconsin is known for itsprogram. We use tektips, asimple telephone call whichbrings information about any

available subject. Hospitalsuse this method to goodadvants2r,

S. Cable television. A combinaLion of live broadcast andpurchased printed material,needs a large audience andbroad subject matter to heefficient.

6. Slow-scan television com-bined with two-way tele-phone. The University ofIdaho uses television signalswith 30 second pictures viatelephone.

7. Instructional fixed systemtelevision. This microwavetransmission between fixedpoints is used by StanfordUniversity to bring engineer-ing instruction to 160 high-technology firms in the SanFrancisco area.

8. Satellite delivery. This isparticularly significant withregard to multiple universityteleconferencing.

9. Computer communications.Computer conferencing orelectronic mail is efficientwhere terminals, screens, andphone connections areavailable.

There are vast differences in bothcosts and effectiveness depending on thekind of training desired, nature of theaudience, access to equivnent, whetherone-time or on-going, and whethervarious forms of permanent recordkeeping, feedback, and monitoring arerequired. Most important in a tight

50 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

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university economy is the way rapidchanges affect long-range, low budgetplanning and capital investment. Youragency illustrates some of the constraintsthat limit application of these methods.Your personnel work is widely scattered,your locations are often isolated, and youhave a wide variety of educationalrequirements for a limited clientele.

Not all new programs are domi-nated by glamour technology. Threeexamples may serve to illustrate someinteresting developments in our ownuniversity.

State Cooperative ErtensionState extension programs have a

long and effective history of helpingagriculture and home economics at thegrass roots level. Some states haveexpanded their extension work into manyrelated areas. Extension programs inland grant universities could have a verysignificant value to your organization. Ineffect, the resources of the state univer-sity are at the call of extension agents inevery county of the state. It seems thatlarger nencies take little advantage ofthis service.

Te-letypt are a "primitive" butvery effective service of our extensionofrice. A phone call elicits short two-minute answers to specific questions. Weare working with local parks on mainte-nance and operations data and with thetourist industry on hospitality tips fortourist service peopleyour "Host" pro-gram on a local level. A committee of theNational Park and Recreation Associationis investigating the practicability ofmaking park maintenance information,

indexed into your Famulus language,available in the ever-improving extensioncomputer network.

The New Zealand ExperienceNew Zealand has a highly regarded

national park system. The service wasdistinguished by excellent leadership andhigh morale, but an obvious lack ofadvanced technical field competence thatmade uniform high performance difficult.In the early '70s, a decision was made toupgrade field personnel training incooperation with Lincoln College. adown-to-earth agricultural school. Thisdecision caused considerable concern onthe part of field personnel who had variedtechnical and academic liackgroundr.

1. Uncertainty on the part offold personnel about theiractivity to handle academicrequirements, compoundedby the fear of being bypassedby "bright young collegekids."

2. Distrust of academicallytrained people.Apprehension about whatunknown duties would beforthcoming.

4. A general fear of change thataffects traditional lifestyles.

It was my good fortune to beinvited to analyze the situation and assistin developing a training program. I wasable to visit with practically all seniorfield personnel in their parks and workwith them to determine how trainingmight be accomplished. Because themajor concern of many experiencedand practical field men was that they

53

Chapter 4 SI

might not be able to meet academicrequirements, it was essential that fieldmen not be put at a disadvantage in theacademic setting. A major personalobjective of many was to be able to worksmoothly with other professionals.engii architects, and scientists.

Study resulted in a program consist-ing of a ten-year series of six-week blockcourses taught at Lincoln College. Thisseries was made available with full government support to all qualified field person-nel. The curriculum emphasized areas ofweakness, professional awareness andpurpose, public contact, profession-!associations, personnel management, andfield engineering. It was to be directedby a man with long park experience andenjoying the respect of field personnel.

Initially there was some resistanceto leaving home and the job, but ulti-

mately the classical "line of influence" asopposed to the line of authority" madethe program work.

Ten years later it was my goodfortune to return and see the results.The evidence of success were especiallyapparent after this long absence. Itshowed up in many ways:

High morale and esprit de corps.Efficient use of manpower and

materials.Greatly improved quality of

environmental management.Close cooperation with attorneys,

local governments, engineers, and

scientists.Quality interpretation as a standard

function of management.Good communications skills.To my knowledge, this is the only

instance of an all-out joint goserninentseducational institution effort to upgradethe training of field personnel. The NewZealanders are now preparing a long-rangeplan to make directed lifetime learning acontinuing part of parks operation.

A Recreation 3fanagementCormspondence C'ourse

A filial example of innovative useof university resources is the recreationmanagement correspondence course beingdeveloped by Dan Williams on assignmentto our college from the Fore ,ervkeRegional office in Denver.

The need for field personnelbecame apparent from your programreviews. Many Forest Service employeesat both District and Forest level are notaware of the recreation mission or thecurrent state of the art in management.planning, or research. Further, many donot know ho* to ford information andhave no incentive to search for it.Resource material on recreation is some-times hard to find within the ForestService. In some cases it never gets to theDistrict level, in others it is lost in thefiles or distribution is haphazard.

In places there are indications thatexperts "do their own things" withoutconcern for national perspective. Inother cases, there are regional prenstr_s todeviate from national policy positions.

The target population for thecourse includes professionals and techni-cians at GS levels 4 to 9. A correspon-dence-course format was developed toovercome severe travel limitations 211(i toprovide flexible coverage of a ratheramorphous and rapidly changing subject.

52 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

54

Course content includes policies, legalimplications of management, organiza-tional barriers between District Forestand Region, uniform understanding ofFORNET and study groups in landscapemanagement, cultural resources, facilities,off-road vehicles, trails, and operationand maintenance standards. In develop-ing course content, the importance ofhaving a leader with long practical fieldexperience wa° . clearly in evidence.

The best people in each specialtyarea were chosen as authors and fieldreviewers, and where controversy occur-red, every effort was made to protectauthorship.

The project has generated realfrustrations, largely centered on "toomany cooks spoiling the broth" andoccasional personality and ego problems.Its success had been largely due to havinga Forest Service regional level director incharge. He is able to work directly at thenational office level and can breakthrough the many hold ups and bureau-cratic road blocks.

In several cases, there were strongregional guidelines but no nationalstandards. Winter recreation, fee estima-tions, and cultural resources are exam -pies. The course should go far in develop-ing uniform practices in these areas.

Weak areas include law enforce-

-nem where two philosophies, moderatehardnose and soft protection of thevisitor experience. compete. Trail main-

tenance information is twenty to thirtyyears old and fails to recognize someimportant changes in equipment andmachinery. Better understanding of theRIM system at the field level is alsorequired.

The hardest area to organize hasbeen the administration of special useswhere uniformity on the district level ismost important. This program unit maybe the most valuable in the long run.

There have been problems ofbucking tradition in developing a newtraining technique, and serious issues mayhave been bypassed because of currentpolitics.

The final problem has been to putfield-originated materials into a universityeducational format to be recognized foracademic credit.

This project has already receivedrecognition by other agencies. It wouldhave been very difficult to develop as acontract without direction by a recog-nized field authority. For the university,it has sensitized faculty to field opera-tions in a way traditional research workcould never do.

For your agency, I believe, it repre-sents innovation at its best and may wellopen up the way to increased traininrefficiency in many other areas. For ouruniversity, it provides another opportu-nity to adjust traditional practices tomeet changing economic and professionalneeds.

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Chapter 4 53

EMERGING INNOVATIONS. CONSIDERATIONS FOR IMPLEMENTATIONS. Krugman and J. W. Creighton

In science, there periodicallyappears a major breakthrougha majorinnovation. Such innovations often havea substantial impact on a given scientificfield. They force a rethinking of goals,priorities, and direction. An example isthe microchip which has given us videogames as well as mini- and micro-computers. In this case, virtually all ofscience was affected. Recently, geneticengineering has provided the biologicalsciences 'with a unique set of tools forusein overcoming a conventional biologicalconstraint, i.e., the sexual process. Thenew science which is evolving is common-ly called the new biotechnology, orgenetic engineering.

As in the case of other majorinnovations, biotechnology has evolvedfrom an already existing technologicalfield. Foresters have long been practicingbiotechnology, as have all participants inthe life sciences. However, geneticengineering is new in the biotechnologicalfield because it outflanks natural proc-esses. Genetic engineering, at least intheory, finally provides a set of workingtools for identifying, isolating, andtransferring single or complex geneticunits from one organism to a closely-related or even a non-related organism.Cell factories can be formulated for thepurpose of producing useful chemicals,vaccines, disease cures, and even moreproductive plants. Wood content and itsquality can now be influenced as never

before.The new science of biotechnology

is actually many different sciencesfocused on a set of common problems. Itincludes biochemistry, plant physiology,botany, genetics, and even forestry. Itsroots were planted over a hundred yearsago, but it has flowered only in the pastnine years. It now offers 6,e greatestsingle-known biological process forgrowth productivity enhancement everknown by providing a mechanism forintroducing single, positive genetic traitswithout necessarily disrupting desirableexisting features. Its high risk is counter-balanced by very high payoff potential.There are, however, some disadvantagesin that the process is species specific,requires multilaboratory treatment, andprogresses in time cycles that are unpre-dictable. In addition, it raises majorpublic relations problems.

The process breaks down into threebasic phases. First is the identificationand isolation of desirable genetic traits,then the transfer of such traits, andfinally the cloning of desirable plantshaving the new traits. In forestry, it isanticipated that biotec!utical research willfocus on the following: disease resist-ance, gene locators, physiological stress,nitrogen fixation, photosynthesis, anddenitrification. The basic techniquesthat need to be improved or developedinclude cell fusion, direct DNA transfer,and single cell selection (somaclonal).

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Chapter 5 55

The Forest Service is currentlyconducting exploratory research in eachof these areas. Emphasis has been placedon the initial development of appropriatetechniques for use with trees. In addi-tion, the existing botanical, genetic,scientific base for a forestry biotechnol-ogy effort is being expanded. Theresearch is currently concentrated in twocenters, and these are supported by anaggressive extramaral program. Thescientific staff is mufti-disciplinary and isbeing continually ,strengthened by addi-tional skills. The effort is very differentfrom traditional Forest Service programsand there is no guarantee of success. If itsucceeds, the ability to respond tobiological as well as technical changes willbe greatly increased. Potentially, geneticengineering could add at least $18 billionto agricultural productivity by tht year2000. A more modest productivityincrease can be expected in forestry, butthe potential fer gain is greater since thegenetic improvement is not as advancedas it is in agriculture.

A common meaning of technologytransfer is the adaptation of existingknowledge or technology to serve a newpurpose, or its adoption and use by a newgroup of people. An extension of thismeaning by a manager might be,"Let'sfind out who all our resources are andthen put them to more effective use."This, and .elated meanings, are thefoundation for most of the FederalGovernment technology transfer effort.Technology transfer programs tend to bebuilt around the idea of sharing theknowledge or resources for the benefitof the total population.

It is all too easy to lose sight oftechnology transfer needs as an idea orconcept works its way from a dream to ausable product. Each or us tends to thinkof technology transfer in a narrow way,especially when we consider our ownspecialized fields. We think of it as thedirect movement of our newly generatedinformation or methodologies to some-one who will put it to use. Even thoughwe may spend a great deal of time acquir-ing knowledge and learning how to applyit, we do not think of this as technologytransfer. Of course it is. We tend toforget that usable products have beenderived from basic concepts and ideaswhich have progressed through manytransfer steps.

Evolutionary transfer steps aretaking place right nov.. To the dreamers,the specialized scientists, the adopters,adapters, and finally the users, the stepsmust take place as a technology emerges.As a technology becomes useful, particu-larly after it has been embodied in 3useful product, failures along the waytend to be forgotten. We look for suc-cesses and we transfer successes. How-ever, during the early stages of theemergence of a technology failures are asimportant as successes. To the scientistwho tries an experiment which producesnegative results, the result is just as mucha part of the knowledge of the field as arepositive results. What does this mean tothe research and development organiza-tion manager, and to the managers of thevarious organizations which constitutethe marketplace for the research anddevelopment organization? While it isimperative for the R&D manager that he

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produce something which may be used bysomebody else, it is equally important togive attention to the process of generatingknowledge which has resulted in thoseuseful products.

We are indebted to Lowell Steelefor pointing to seven misconceptionsmanagers harbor about technology Hisformulations are pertinent to all managerswho are concerned with innovation, andare particularly relevant at policy makinglevels in organizations. Using the exam-ple of the development of biotechnologyin the Forest Service, we shall illustratethese misconceptions in terms of kinds ofbarriers confronting an emergingtechnology.

Misconception I: The criterion for deter-mining the implementation of atechnology should be "best possible,"not "good enough."

As Steele states, "Much of whatR&D does is develop solutions which areless than technically elegant, but thatreflect the value for which customers arewilling to pay." The development ofmethods as well as products from forestrygenetic engineering has a time lag which isperhaps longer than for other products.The length of this lag depends on whethergenetic-caused modifications are to beinduced in the characteristics and qualityof fiber, or whether the intent is toproduce higher quality, lower cost,saw-log products. Since the time neededto develop the characteristics desired willbe lengthy for either purpose, continuedsupport from taxpayers for research car-ried on by a public organization is diffi-cult to maintain. Successful applications.

even though not perfectly developed,may be needed to ensure continuingsupport to permit later refinementsfor a private sector timber company. It isthus mandatory that any genetic modifi-cation program be oriented toward "goodenough" to bring a recognizable benefit.Otherwise, long range genetic researchmay die for lack of support.

Producing faster-growing trees andhigher quality wood are certainly objec-tives of the genetic engineering effort.But there are also short range goals thatcould provide immediate and usefulbenefit. The development of newmethods for the identification andselection of disease resistant trees couldhave immediate application, and thebenefits would be measureable in arelatively short period of time. Theincreased production of selected andknown silvichemicals by the new biotech-nology is also a current goal.

It must be emphasized here that ingeneral, there is a great differencebetween the time required for developingmodifications in many plants with whichthe Forest Service deals, as comparedwith agricultural products. Of course, thepossibility exists for quick results fromforage plant modifications, and there isalso the possibility that genetic engineer-ing could fairly soon bring about a shiftin the production of cellulose fiber frompulp wood to some other kind of plant.

If either of these possibilities wereto be realized, the economic conse-quencescosts saving., and benefitswouldbe more decisive in influencing managers'attitudes toward genetic engineering R&Din the Forest Service than any number of

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spet.ifk, discoveries from the sciences.

Misconception "Good enough" isdetermined k careful rational choice,not Itt dial consumers accept orexpect.

Researchers are apt to disregard thefact that it is the consumer who ulti-mately cracks the whip. In the privatesector, the research manager who is notaware of existing or potential consume;demand is not likely to survive. In thepublic sector, it is often difficult toidentify the consumer. Typically, theconsumer is not the sponsor who providesthe funds. The sponsor is only theintermediary between the ultimate publicuser cohort, which includes private sectorbusiness establishments. Because thelinkage between the researcher and theultimate user is not close, the urge isstrong to do what we want to do ratherthan what the ultimate consumer is likelyto support.

Like forestry genetic engineering,NASA was confronted with the impera-tive of maintaining public support ofspace programs. The agency had toexpend considerable resources developingand publicizing spinoff. The ForestService might be well advised to followNASA's example and alert the public tothe benefits, actual and potential, of itsgenetic engineering programs.

The foundations for such a cam-paign have already been laid. For manyyears the forest genetic research programshave identified priority problems jointlywith the various groups. This jointpriority -setting procedure is now wellestablished.

Misconception 3. Most innovations aresuccessful.

As noted by Steele, "This distortedperception arises to some Lxtent from thenatural tendency of both companies andindividual managers to publicize successeswhile allowing failures to die quiet!). :naddition, the data needed to analyze afailure even for an internal study areusually skimpy and difficult to assemble.

In reality, the failure rate of inno-vations is high. This fact reflects theintricacy and interdependence of ad-vances in technology. Any attempt tointroduce a technical capability mustdemonstrate that the capability reallydoes offer substantial advantages. Mastof the time, however, a new technologyeither is not enough of an improvementover the old to warrant the effort and therisk it entails, or it has problems anddeficiencies that were not apparentinitially."

The excitement and .enthusiasmwhich often accompany a new technol-ogy are almost certain to prevent some ofthe deficiencies from being recognizedearly. It takes managers of some experi-ence to be aware that unforeseen conse-quences will arise. They need to becautious, and stick to the axiom familiarto every manufacturing executive. "Ifyou're not suredon't."

The need for caution is a stimulusfor effective evaluation in productintroduction planning. Under threatfrom innovative techniques, existingtechnologies are not infrequently modi-fied to bring them up to scratch, and theupgrading actions may be so extreme andthoroughgoing as to constitute a new

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technology. This may not apply exten-sively to genetic engineering research, butalmost every R&D manager has seen itoccur in the applied research field.

There is, furthermore, the questionof who determines if an innovation issuccessful? Researchers may feel thatanything that contributes to the knowl-edge and the subject area is ipso factosuccessful. The administrator chargedwith turning out products that reallyoffer substantial advantages cannot affordto take such a cavalier position.

Misconception 4: What you do not knowabout a new technological advance isprobably good: Murphy's Law rarelyapplies.

Every manager is aware ofMurphy's Law or its variants:

If something can go wrong, itwill.

If there's no way it can gowrong, it will anyhow.There's never time to do itright, but there's always timeto do it over.Nature always sides with thehidden flaw.

All of us know of others. it is notpossible to know everything about a newtechnology when it is introduced. On theother hand, it is possible that well-directed research efforts can reduce thenumber of Murphy-type snafus.

Because of Murphy. when a deci-sion is made to go ahead with the newtechnology, there will be doubts. But incase of doubt, make the case for adoptinga new technology sound convincing. Youmay get away with it.

We, too, have our doubts and deepconcerns about the likely success of anew biotechnology as applied to forestry.But then, we had similar concerns whenconventional genetic practices were ap-plied to forest trees. If we take each stepone at a time, and not forget our previousexperiences, we should be able to elimi-nate many negative impacts of Murphy'sLaw on the program.

Misconception 5: In most instances,radically new technology will turn outto be more desirable than advancesand extensions of conventionaltechnology.

The evidence is overwhelming thatmost technological advances are of adevelopmental nature and originate in theprivate sector. The research departmentsof many corporations are confined toefforts of design modification to, orpart-by-part changes in the product. As amatter of policy, basic research and workon drastic innovations is left to others.Many industrial leaders frankly admitthat "it's much less expensive to buy,borrow, or steal than it is to maintainbasic research facilities." The Japanesegovernment has traditionally concen-trated on promoting the transfer ofsuccessful existing technologies ratherthan investing in new ones. This, it hasbeen suggested, may have been a factor intheir losing World War II, but there is stillsome questions as to who is winning thepeacetime competition.

The place of genetic engineeringmodifications in forestry has yet to beproven. Possibilities for application areso exciting as to make investment worth-

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while. Some successes em already on thehorizon, but so are some attendantquestions. For instance, will geneticchanges to increase disease resistance beable to surpass the efforts of an alreadywell-developed industry devoted to thecontrol or prevention of plant diseases?

Questions such as this are prompt-ing us to move in the direction of incor-porating the new technology withexisting proven genetics programs.Managed in this way, the new technologywill be sten as a logical but neededextension of current forest geneticdevelopment.

Misconception 6. The success of a newtechnology rarely depends on theadequacy of available infrastructure.

Again we quote from Steele: "Agood practice is to assume completetechnical success and then ask the ques-tion, 'Now what has to happen to get thistechnology widely adopted?' "

For each field which may beimpacted by genetic engineering, therewill be infrastructure questions to beaddressed before widespread adoptionbecomes possible. For instance,

What additional educationand training will be requiredbefore the technology canbecome useful?What existing technologiesand support fields are in aposition to lend support?What existing institutions orgroups can be expected tooppose?What is to be done to preparethe public for innovations

resulting from geneticengineering?What sorts of legislative bar-riers are likely to be put up?How can potential opposingvested interests be influencedagainst initiating or support-ing such barriers?What are the long-term bio-logical consequences of thenew technology, and in

particular, what impact is itlikely to have on naturalsystems?

Many of these issues cannot beaddressed until we can screen and testproducts of the new biotechnology. Butthey must be kept under review, even aswe develop this program. At this time,we are putting effort into exploring con-cerns about the potential impact on anarray of social, legal, and even moralquestions. We are also looking into theeducation and training needs of the cur-rent, as well as the next generation ofscientists.

Misconception 7: Making a technologyeffective doesn't involve developingroutines and standards, achievinggreater precision, and working underconstraints.

When considering innovation, wetend to look at the gold and disregard theacid, to think that something is so goodthat the flaws in it will work themselvesout. Millions of dollars have been lost byconsumers because of the unwillingnessof the computer industry to standardizeand modularize both hardware andsoftware. Convinced that computers are

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here to stay, many firms in the industryhave acted on the precept, "Let thecustomer adapt to what I am producing."Some have paid the price.

Genetic engineering has yet todevelop experimental and testing proce-dures for predicting replications andstandardizing results, for establishingstandards and thinking through enforcingpractices to the point where they can beapplied, and for structuring the manage-ment of the new technology.

Where Do 14c Gc Prom Here?We havt been Jiscussing the seven

misconceptions in terns of the evolutionof genetic engineering. But the principlespresented apply to all technology emer-gence. Both in managing emergence andin managing resulting technologicalresources, an understanding of the entirechange process can result in vast econo-mic gain.

Those in research fields tend to beimpatient with users for failing to takeearly advantage of new technologies,frequently not understanding that theexperience of the user supports beliefs inthe high rate of innovation failure and theadage, "If you don't knowdon't." Onthe other hand, the user communitytends to be impatient with researchers forfailing to devote sufficient resources andeffort toward the "real" needs of those inproducing segments of organizations.

Neither deserves blame, for theincentives generated by professional andorganization peers not only tolerate butencourage such views.

It is the function of managers in thetotal organization to bridge the gaps

between techn. ,ngy generators and userswith incentives which cause researchers toseek active participation by users in theirresearch and development work, whichcause users to demand from researchersbeneficial results, and which cause bothto feel rewarded from acceptance ofchange contributions wherever generated,

People in organizations respond toperceived reward. If primary rewards areestablished as incentives for researchersand users to zooperate, to introduce,adapt and adopt economically beneficialinnovations from whatever source,managers will see the process of innova-tion accurately and not as colored byvarious misconceptions. We return toSteele. "Although the odds are very highthat any given innovation attempt willfail, companies must innovate in order tosurvive, The benefits of the occasionalsuccesses are enormousnot only in directrewards to the innovator and gains tosociety, but also in the ripple effectsgenerated by the process itself. It goadsconventional technology into improve-ment, stimulates ad mtability to change,leads a comport1 oward greater self -awareness of its st....ngths and weiknesses,and responds to one of the most powerfulhuman drivesthe urge to try somethingnew."

Lowell Steele, "Manager's Miscon-ceptions About Technology," HarvardBusiness Review, November-December1983, pp. 133-140.

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MATCHING TECHNOLOGY TO CUSTOMERS' NEEDSBob Frankenberg

I regret that I was unable to attendthe earlier parts of this symposium. Iarrived yesterday evening just in time tohave dinner with two of your speakers,Milon Essoglou and Dick Fay, and yourchairman, Wally Creighton, From theevening's discussion, I gained someknowledge of preceding parts of thissymposium and hope that what I amabout to introduce to you wilt fit nicelyinto the symposium's cbjectives.

I understand that Ross Whaleyreferred to Peters and Waterman's book,In Search of Excellence, and their conten-tion that the environment in somecompanies makes it risky not to takerisks. Perhaps that is the perception ofsome, but I believe that at H-.7,vitttPackard risk is not Ciought about verymuch. Rather, there is a widespreadunderstanding that the health of thecompany and the well-being of theemployees depends, to a great extent, onbeing leaders in the industry. To main-tail that leadership, Hewlett Packardmust be aggressively innovative.

This aggressive pursuit of innovativesolutions to problems is not preciselyspelled out in the objective statements ofthe corporation, but the environment forit is certainly encouraged as you can seefrom the following framework statementfor the Hewlett Packard corporateobjectives:

"The achievements of an organiza-

tion are the result of the combinedefforts of each individual in the organiza-tion working toward common objectives.These objectives should be realistic,should be clearly understood by everyonein the organization, and should reflect theorganization's basic character and person-ality,

If the organization is to fulfill itsobjectives, it should strive to meet certainother fundamental requirements.

First, there should be clearlycapable innovative people throughout theorganization. Moreover, these peopleshould have the opportunity throughcontinuing programs of training andeducation to upgrade their skills andcapabilities. This is especially importantin a technical business where the rate ofprogress is rapid. Techniques that aregood today will be outdated in the futureand the people should always be lookingfor new and better ways to do their work.

Second, the organization shouldhave objectives and leadership whichgenerate enthusiasm at all levels. Peoplein important management positionsshould not only be enthusiastic them-selves, they should be selected for theirability to engender enthusiasm amongtheir associates. There can be no place,especially among the people charged withmanagement responsiblity, for half-hearted interest or half-hearted effort.

Third, the organization shouldconduct its affairs with uncompromising

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honesty and integrity. People at everylevel should be expected to adhere tostandards of business ethics, and tounderstand that anything less is totallyunacceptable. As a practical matter,ethical conduct cannot be assured bywritten policies or codes. It must be anintegral part of the organization, a

deeply ingrained tradition that is passedfrom one generation of employees toanother.

Fourth, even though an organiza-tion is made up of people who fullymeet the first three requirements, alllevels should work in unison towardcommon objectives, recognizing that it is

only through effective, cooperative* effortthat the ultimate in efficiency andachievement can be obtained.

It has not been ou: policy tt HP tohave a tight military-type organization,but rather to have overall objectiveswhich are clearly stated and agreed upon,and to give people the freedom to worktoward those goals in ways they deter-mine best for their own areas of responsi-

bility.Our HP objectives were initially

published in 1957. Since then they havebeen modified from time to time, reflect-ing the changing nature of our businessand social environment. This bookletrepresents the latest updating of ourobjectives. We hope you find theminformative and useful."

DAVID PACKARDChairman of the Board

WILLIAM HEWLETTVice - Chairman of the Board

JOHN YOUNGPresident and Chief Executive Officer

The above might appear as anobjective statement, but it is not thestatement of HP objectives. I will presentthe corporate objectives to you later ifthere is interest and time permits. First,however, I would like to discuss some ofthe things we do at HP to aggressivelypursue innovative solutions to customers'problems.

I am the general manager responsi-ble for the low-cost and midrange portionof HP's Commercial Computer Systemproduct line, the HP-3000. This productline accounts for roughly 25% of HP'stotal revenues and is the second mostpopular general-purpose business systemin world. All of the systems availablein this product line were introducedwithin the last two-and-a-half years.Within the next two years, all currentsystems will be replaced by newer, morepowerful and less expensive systems. Wehave been doing this since the inceptionof the product line and see no end insight to the need to continue this rate ofinnovation while providing compatibleupward growth for our customers. Tosay that innovation is our life blood isabsolutely true.

I understand that Dick Fay stressedthe flattering of an organization toencourage innovation, and that the fewerthe steps between the individual contri-butors and the top manager the greaterthe chances for innovative approaches.Hewlett Packard is in complete agreementwith Dick Fay on this point. We are well

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aware of the studies that show that themajority of the innovations which be-come successful in the market come fromsmall companies, You might ask, then,how it happens that HP is well known forits innovations when, with sales over 54.5billion, it can hardly be considered small.

Hewlett Packard's policies towardgrowth have strongly emphasized mainte-nance of the "small" atmosphere throughthe creation of divisions. When a divisionreaches a critical size (greater than 1,000to 1,200 people), it is encouraged to splitinto two smaller entities. It is thisprocess that has created over 50 divisionsand operations in HP. Each division oroperation concentrates on a particularmarket, product, or technology area, withthe objective to provide the very bestsolution to customers' problems withinits chartered area. Each entity is like asmall company with product develop-ment, marketing, manufacturing, person-nel, finance and quality assurance func-tions, and is free to pursue its charterwith a high degree of autonomy.

This does, occasionally, result inconflicts between divisions which areresolved either by the division managersinvolved, or by group and corporatemanagement. These rare conflicts are asmall (ice to pay to retain the smallteam atmosphere so essential to ahealthy, innovative environment. Bycharging a small group of sexy capablepeople with the full responsiblity for aproduct line's success, one creates anenvironment where an individual or smallteam can make a big difference, andpeople know they are the only ones whocan make it happen.

There ", nothing quite like necessityto spur invention. I might add that it'sreally quite exhilarating to see this inaction. There is no finer feeling for anengineer than to see his or her work resultin a successful product and sec thatproduct make a real difference in thesuccess of a business. This is much morelikely to happen and be noticed in adivision with sales of SIO0 million peryear than in a company that does $4.5billion per year.

Let us now turf our attention tothe process of creat'mg innovative solu-tions to customers' problems. If youallow me to define a customer as anyonewho spends something of value to "buy-a service or product from you, we arriveat quite a different view from the conven-tional definitions. In this sense, each ofyou is my customer at this moment,spending a very valuable resource-yourtime-for my service information. For meto provide you with a good service, I needto know what problems you would liketo solve and how my information mightbe applied to those problems. That is, Ineed to have close contact with mycustomers' needs, ideally understandingthem as well or better than my customerdoes. Everyone in this room has custom-ers in this sense, and everyone in thisroom is a customer for many services onthe job and, of course, as an individualconsumer. Often the resource expendedis quite intangible.

Examples of intangible, dear re-sources include reputation, trust, career,health, and ability to respond to otherdemands. Putting these intangible butclearly vital "resources" at risk for

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another's service or product is a trade-offwe all make every day. HP believes thatonly by truly understanding our custom-ers' problems can we create products andservices that solve these problems, andearn us the priviledge of having those cus-tomers spend their tangible and intangibleresources fur our solutions. This denti-tion of a customer applies internally aswell as externally. The person on an HPproduction line is the customer of theperson before, and tht n.xt person on theline is his or her customer. With each per-son striving to please the customer in bet-ter and more effective ways, we create anatmosphere where each person is strivingto innovate, and where each person is animportant part of the overall process andnot just a worker collecting a paycheck.

When HP developed products onlyfor use by engineers, learning about thecustomers' needs was relatively simple.You talked to the engineer at the "nextbench." He or she had measurement andinstrument control problems that couldnot be solved without a new instrument,controller feature, or entirely new sys-tem. This "next bench syndrome" com-bined with occasional trips to visit out-side customers (e.g., when a new productwas introduced, or casual meetings attrade shows) gave design engineersexcellent insight into the needs of cus-tomers. As we have expanded intoproducts that serve business, governmentand consumers, our "next bench syn-drome" had to be enlarged to includenew ways for our designers to learn aboutcustomer needs, likes, and dislikes. Letme give you some examples of thesemethods:

I. Attending user group meet-ings and presenting a paper, or sitting inon an informal session with users, learning about their concerns.

2. Visiting customers and inter-Voting users, managers and systemadministrators. One of our divisions does100 such visits before completing theinitial or investigation stage of a deselopment project.

3. Customer surveys. OurComputer Service Division, for example,surreys all customers who have servicecontracts each year and shares the resultswith the product divisions.

4. Personal visits, I spendapproximately 15% of my time withcustomers,

5. Inviting customers to ourfactories to visit with our Research andDevelopment (R&D) and Marketingteams and discuss their requirements.

Using these and many othermethods, we search continuously forcustomer problems that need to besolved, improvements that need to bemade, and problems for which there areno iolutions today but could be tumorrow. The results of these searches arecataloged and used to guide our researchand development efforts so that they are"doing the right things." We believe thatit is every bit as important to have R&Ddo the right things as it is to have R&Ddo things right. Doing the right thingsright means solving the problems yourcustomers rived to have solved. Doing

things right means providing a highquality solution.

I'd like to share with you a protessthat we apply to a wide range of prob-

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!ems, including selecting products todevelop. We call this process "TQC"which stands for total quality control.Quality in this sense means "fitness foruse," and includes all aspects of theproduct or process, not just reliability.

As you can see from this diagram,TQC starts with the definition of an issue.The second step is to figure out how tomeasure the important aspects of theissue using what we call PPM, or ProcessPerformance Measures. The processthat generates this issue is defined insufficient detail to permit understanding,but not in so much detail that one can'tsee the overall flow on one piece ofpaper. A team of people who are in-volved in the process or have learned agreat deal about it (e,g from customervisits, etc.) get together in an informalsession and brainstorm what this processmight be if it were perfect; what's intitoit-ing tir.s process from performing better:and what might accelerate it to betterperformance as measured by the PPM? Icall this "imagineering," an idea and aterm I borrowed from Bill Conway,former CEO of the Nashua Corporation.

Accelerators and inhibitors areclassified into major categories andarranged on a "fishbone" diagram show-ing major categories as trunks, andsubclasses as branches. Data gathered tosupport or deny the hypothesis of thebrainstorming session is stratified andlooked at in many different ways toensure that all aspects of the issue areexamined. Often this results in a sub-issue being defined, and the process isrepeated. This goes on until one getsdown to the verified basis of the problem

(there may be several) that can be actedupon.

When TQC is applied to productdevelopment, it often yields surprisingresults. Frequerilly, the problem is notwhat you initially thought it was. Hadyou acted on the original issue, youwould have created a product or serviceno one really needed. But TQC has alsobeen successfully applied to researchprojects, development projects, manage-ment processes, service products (yieldingthe best service for computer systems inthe industry according to Data Pro andseveral other surveys), production prise-es.ses, and in a host of other areas. I hopeI have tweaked your interest sufficientlyfor you to want to apply it in youragency.

QUESTIONS AND ANSWERSQ: How do you measure the perform-ance of your scientists and engineers?A: This is very difficult to do correctlyand objectively. We have a formal evalua-tion of performance annually for allemployees, including engineers and scien-tists. The key overall criterion appW iscontribution to the success of the projectbeing worked on. Specific areas evalu-ated include demonstrated technicalresults, judgment, creativity, ability towork in a team, perseverance, willingnessto extend oneself, and keeping commit-ments. There are several other aspectsthat are evaluated which don't spring tomind right now. If you'd like, I'll havethat information forwarded to you. Wealso apply a grading system to projects.One that is tone on time and right getsan "A," one that is right but late gets a

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FUNCTIONISSUE'

BRAINSTORMnr

IssuE I--

SPECIFY "'PROCESS"

PPM

(HIGHESTLEVEL)

TIME SERI IPLOT

I AAATISK

FISHIONE CONTINUATIONOF IMPROVEMENT

> > > ISSUE

DATA COLLECTION/ANALYSIS

SUS -ISSUE

REFINE PROCESSSPECIFICATION

MS NEEDED)

DATA COLLECTION& ANALYSIS

SUB-ISSUE

PPM

(2NDLEVEL)

TIME SERIESPLOT

PPM

13R

LEVEL)

Figure 1. TQC Methodology.

63 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

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"11," and one that is wrong and early orlaic an "F."Q. What types of educational assist-ance are available to scientists?A. HP pays all fees, books, tuition,etc., for all classes that relate to a per-son's job Many people join HP rightout of college with a bachelor's degree.These people are strongly encouraged topursue a master's degree either throughHonors co-op programs, attending localuniversities, or by taking videotaped orvideo- teleconferenced courses offered inall HP plants. These are also paid for byHP. HP also lets people know that werealize that the half-life of an engineeringeducation is about four to five years, andthat employees are expected to takeadvantage of the educational opportuni-ties provided to keep current. We alsoprovide a research fellowship program towhich engineers can apply. If selected,they attend school full time (usually topursue an advanced degree or to cross -train into a new caresr area), receiving7S(7.- of full pay, and all scheot costs.One of our more innovative programsallows technicians and production wort.ers to pursue a four-year degree inEngineering or Computer Science. Ifselected for the program, the individualcan work as little as half time and receivefull pay if carving 12 or more semesterhours and maintaining a B average orbetter Selection for the program is basedon current job performance, schoolgrades in classes taken on their own time,and appropriateness of the chosen currie-ula This program is ordy ()Lewd in onedivision of HP at this time.Q: What other ways are used to

develop people?A: We encourage engineers to work inseveral different areas during the earlypart of their career. It is not unusual tobe hired as an R&D engineer, work inR&D for several years, move into Manu-facturing, Marketing, Product Assurance,or Management Information Systems forseveral years, then come back into R&D.We believe that this makes an engineermuch more well rounded, gives a betterunderstanding of what makes a productreliable, supportable, manufacturable,and useful to the customer. It alsoaffords the opportunities to get to knowpeople in these areas, and to becomemore effective in getting things done incooperation with these other teams. Wehave begun a similar program of exchangewith our central research labs (HP Labs)to give people in product divisions thechance to do more research-orientedwork, and the people in our central labsto learn what it takes to make successfulend products.

Probably the most important wayin which we develop people is withone-on-one counseling and mentoring.All new engineers hired are assigned amentor who shows them the ropes, helpsthem to learn the tools and "tricks of thetrade," and acts as a ,ounding board fortechnical ideas and problems. The mostvital link in the development process isthe first line supervisor. For engineers,this is the project manager. A great dealof the project manager's time is spent inscheduling training, reviewing individualprogress in informal one-on-one sessions,and setting personal development objec-tives as well as job objectives.

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Another key, I believe, to develop,ing engineers to their fullest is to givethem complete responsibility for a prod-uct over its entire life cycle. Ideally, theengineer who does the original designkeeps responsibility for it as it is denel-oped, debugged, introduced into manu-facturing, introduced to the market,manufactured in volume, and eventually"obsoleted." This philosophy helps en-sure that the right things are done at allstages, as there is no "fence" to throw anincomplete job over for someone else tofix. This is not always possible, as peopleget promoted, transferred, or changecareer fields, but we try to do this withevery engineer.Q. What do you look for when inter-viewing college candidates?A. The main things I look for areintelligence, enthusiasm, and the abilityto get things done. Intelligence measuresare relatively easy to obtain from a com-bination of grades and questions relatedto the individual's major, I gauge enthu-siasm by the person's demeanor, prepara-tion for the interview, and the kinds ofprojects the person would like to do ifgiven the opportunity. The ability to getthings done well is gauged by the person'sperformance in things they have chosento do.Q: You've mentioned informality a

number of times. What are some of thethings you do to encourage it, and why isit so important?A. We believe that informality is a keyelement of good communication, andthat good communication is an essentialelement of success in everything we do.Informality is encouraged in many ways.

Everyone uses first names even with topmanagers. 13111 Hewlett and Dave Packardare known to every one as Bill and Dave,and so it is with all other managers. Ifyou walk around an HP facility, you'llfind office spaces separated only by lowpartitions. I challenged a visitor once tofind the general manager's office by theappearance of that office. He wasn't ableto do it. The "office" he chose turnedout to be a conference room arranged tolook like an executive's office for a salestraining film we were shooting at thetime. The offices are set up this way toencourage people to communicate easilywithout the barrier of a secretary guard-ing a closed door. Another form ofinformal HP communication that hasbecome quite well known is MBWA(Management by Wandering Around).Managers walk around in a facility andstop by an area to chat with people to seehow things are going. It's amazing howmuch you can learn just by talking withthe people who are doing the work!Q: Do you allow people to work athome?A: Yes, we do, although not as ageneral rule. At times it is more produc-tive to work at home especially when thetask demands complete concentrationand is harmed by interruption. I thinkthe basic attitude at HP en this questionfor engineers and other professionals isthat as long as you are meeting the objec-tives we have agreed on we aren't going tokeep track of how many hours you work,what time you come to work, and whattime y on Jeall . We offer flex time tonearly all our employees. This makes iteasier for people to deal with commuting,

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personal preferences, and other concerns.The basic message in these policies, andmany others at HP is: "We trust you."We believe that people want to do a goodjob, work hard, and be successful. I havefound that this trust is rarely misplaced,and that giving people the freedom towork their own hours usually results inpeople working more hours than if youheld them to a rigid time schedule.Everyone is, of course, expected to bepresent at meetings, participate in projectreviews, and meet deadlines.

I think that we have taken a signifi-cant step towards increasing the ability ofpeople to work at home. For a high per-centage of the engineers in HP':, computergroup, we have provided personal com-puters and modems that permit workingon projects at home, learning how to usethese new tools, and linking into ourinternal data processing systems, datacommunications, and electronic mailnetwork. Homework of this kind hasresulted in a significant increase inproductivity on two projects I've beenheavily involved in, and, I'm sure, onmany others thoughout our computerdivisions.Q: How do you go about making surethat people do the right things right?A: Let me see if I can illustrate theapproach by giving you a sample of thethings we do.

It starts with selecting good people,which gets us back to an earlier questionabout recruiting. Getting the right reoplewith the appropriate skills, experience,and interest is absolutely vital to success.The next step is setting objectives. This isan iterative process that incorporates the

business objectives, project objectives,product objectives derived from customerrequirements discussed earlier, and theindividual's abilities and personal objec-tives.

Once the objectives are agreedupon, the nee step is making sure thetools and methods arc in place to do thejob properly. For engineers in the com-puter area, this might include gooddevelopment systems, appropriate instru-mentation, simulators, test facilities, andso on. Properly equipped engineers arefar more likely to do things right. Forexample, by methods I mean Beratingmethods for electronics components toassure reliability, documentation stand-ards to ensure that the design informationis correctly captured and understandableto others, coding standards to ensure thatsoftware is properly designed for futureenhancement and maintenance, etc. Byemploying the best tools and methods,our aim is always to do it right. As thisdoes not always work, we test the prod-uct exhaustively. For hardware, thismeans grueling environmental testsbeyond the vedfications we certify tocustomers.

Many divisions in HP have adopteda concept which we refer to as "strifetesting." In this type of test, the productis, for example, suLjected to higher andhigher temperatures until a failure occurs.This failure is then analyzed, correctionsare made to the design or part, and theprocess is repeated on corrected versionsof the product until the margin in thatparticular parameter is well beyondspecification.

For software the process is more

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difficult. Here we employ peer-groupdesign reviews, certification tests, andsystem reliability tests. We are constantlyexperimenting with ways to improve bothhardware and software testing effective-ness. Whenever we find a problem, weask ourselves what caused it, and how itcould be avoided in the next product.This information is used to improve thedesign methodologies with the goal ofdoing it right.

Following are the Hewlett Packardcorporate objectives:

I, Profit. To achieve sufficientprofit to finance our company growthand to provide the resources we need toachieve our other corporate objectives.

In our economic system, theprofit w, generate from our operations isthe ultimate source of the funds we needto prosper and grow. It is the one abso-lutely essential measure of our corporateperformance over the long term. Only ifwe continue to meet our profit objectivecan we achieve our other corporateobjectives.

Our long-standing policy hasbeen to reinvest most of our profits andto depend on this reinvestment, plusfunds from employee stock purchases andother cash flow items, to finance ourgrowth.

Profits vary from year to

year, of course, reflecting changing

economic conditions and varyingdemands for our products. Our needs forcapital also vary, and we depend on short-term loans to meet those needs whenprofits or other cash sources are inade-quate. However, loans are costly andmust be repaid. Thus, our objective is to

rely on reinvested profits as our mainsource of capital.

Meeting our profit objectiverequires that we design and develop eadtand every product so that it is considereda good value by our customers, yet ispriced to include an adequate profit.Maintaining this competiti, eness in themarketplace also requires that we per-form our manufacturing, marketing, andadministrative functions as economicallyas possible.

Profit is not something thatcan be put off until tomorrow , it must beachieved today. It means that my.iadjobs be done correctly and efficiently.The day-to-day performance of eachindividual adds toor subtracts fromourprofit. Profit is the responsibility of all.

2. Customers. To 2rovide pied -

ucts and services of the hi:tea -tualityand the greatest possible Value to oarcustomers, thereby gaining and holdingtheir respect and loyalty.

The continued wowth andsuccess of our company will be assuredonly if we offer our customers m. tive

products that fill real needs snd providelasting value, and that are supported In awide variety of useful seniee;, bothbefore and after sale.

Satisfying customer needsrequires the active participation c f every-one in the company. It demands a totalcommitment to quality, a commitmentthat begins in the laboratory and extendsinto every phase of our operations.Products must be designed to providesuperior performance and long, trouble-free service. Once in production, theseproducts must be manufactured at a

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reasonable cost and with superior work-manship.

Careful attention to qualitynot only enables us to meet or exceedcustomer expectations, but it also has adirect and substantial effect on ouroperating costs and profitability. Doing ajob right the first time, and doing itconsistently sharply reduces costs andcontributes significantly to higher pro-ductivity and profits.

Once a quality product isdelivered to the customer, it must besupported with prompt, efficient servicesof the same high quality.

Good communications areessential to an effective field sales effort.Because of our broad and growing line ofproducts, very often several sales teamswill be working with a single customer,These teams must work closely to assurethat the products recommended bestfulfill the customer's overall, long -ternsneeds. Moreover, HP customers must feelthat they are dealing with one company,a company with common policies andservices, and one that has a clear under-standing of their needs and a genuineinterest in providing proper, effectivesolutions to their problems.

3. Fields of Interest. To buildon our strengths in the company's tradi-tional fields of interest, and to enter newfields only when it is consistent withthe basic purpose of our business andwhen we can assure ourselves of malting aneeded and profitable contribution to thefield.

Our company's growth hasbeen generated by a strong commitmentto research and development, and has

been accomplished in two ways: first, byproviding a steady flow of new productsto markets in which we are already wellestablished, and second, by expandingour technology into fields that are newbut related to our traditional ones. Theevolution of the HP product line is areflection of this two-dimensionalgrowth.

Our first products were elec-tronic measuring instruments used pri-marily by engineers and scientists. Intime, we extended our range of productsto include solid-state components andinstrumentation for the fields of medicineand chemical analysis. Recognizing ourcustomers' needs to gather and assimilatelarge quantities of measurement data, wedeveloped a family of computers tocomplement HP measuring devices. Bylinking measurement and computationaltechnologies, we gained added strength inour traditional, technically-oriented mar-kets and began to serve the broader needsof business and industry.

Today, the interactive capa-bilities of Hewlett Packard instrumentsand systems enable our customersdeci-sion retkers in business as well as intechnical fieldsto gain ready access toessential information, to put it intomeaningful form, and to use it effectivelyin improving the productivity of them-selves and their organizations. Helpingthese customers achieve better results isthe unifying purpose of our business.The areas we serve build on each other toadd strength to our company and provideadditional values to our customers. Thisguides our interests, our orgaidzation, andour marketing philosophy.

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The broad scope of HPtechnology often provides opportunitiesfor our company to expand into newfields. Before entering a new field,however, we must satisfy ourselves that itis coiaistent with our business purposeand that it affords us the opportunity tomake a significant contribution. This

requires that we have not only the

technology to create truly innovative andneeded products, but that we also havethe capability to manufacture and marketthem effectively and at a reasonableprofit.

4. Growth. To let our growthbe limited only by our profits and ourability to develop and produce innovativeproducts that satisfy real customer needs.

How large should a companybecome? Some people feel that when ithas reached a certain size there is nopoint in letting it grow further. Others

feel that a large-sized business is anobjective in itself. We do not believe thatlarge size is important for its own sake,however, for at least two basic reasons,continuous growth in sales and profits isessential for us to achieve our otherobjectives.

In the first place, we serve adynamic and rapidly growing segment ofour technological society. To remainstatic would be to lose ground. We

cannot maintain a position of strengthand leadership in our fields withoutsustained and profitable growth.

In the second place, growth isimportant in order to attract and holdhigh-caliber people. These individualswill align their future only with a com-pany that offers them considerable

opportunity for personal progress. Oppor-tunities are greater and more challengingin a growing company.

S. Our People. To help HPpeople share in the company's successwhich they make possible, to pros ide jobsecurity based on their performance, toinsure them a safe and pleasant workenvironment; to recognize their individualachievements; and to help them gain asense of satisfaction and accomplishmentsfrom their work.

We are proud of the peoplewe have in our organization, their per-formance, and their attitude toward theirjobs and toward the company. Thecompany has been built around theindividual, the personal dignity of each,and the recognition of personal achieve-ments.

Relationships within the com-pany depend upon a spirit of cooper-ation among individuals and groups, andan attitude of trust and understanding onthe part of managers toward their people.These relationships will be good only ifemployees have faith in the motives andintegrity of their peers, supervisors, andthe company itself.

On occasion, situations willarise where people have personal prob-lems which temporarily affect theirperformance or attitude, and it is impor-tant that people in such circumstances betreated with sympathy and understandingwhile the problems are being resolved.

Job security is an importantHP objective. Over the years, the com-pany has achieved a steady growth inemployment by consistently developinggood new products, and by avoiding the

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type of contract business that requireshiring many people, then terminatingthem when the contract expires. Thecompany wants HP people to have stable,long-term careersdependent, of course,upon satisfactory job performance.

Another objective of HP'spersonnel policies is to enable people toshare in the company's success. This isreflected in a pay policy and in employeebenefit programs that place us among theleaders in our industry.

There is also a strong commit-ment at HP to the concept of equalopportunity and affirmative action, notonly in hiring but also in providingopportunities for advancement. Advance-ment is based solely upon individualinitiative, ability, and demonstratedaccomplishment. Since we promote fromwithin whenever possible, managers at alllevels must concern themselves with theproper development of their people, andshould give them ample opportunitythrough continuing programs of trainingand education to broaden their capabili-ties and prepare themselves for moreresponsible jobs.

The physical well-being ofour people has been smother importantconcern of HP's since the company'sfounding. With the growing complexityand diversity of our research and manu-facturing processes, we must be especiallyvigilant in maintaining a safe and health-ful work environment.

We want people to enjoytheir work at HP and to be proud of theiraccomplishments. This means we mustmake sure that each person ref :elves therecognition he or she needs and deserves.

In the final analysis, people at all levelsdetermine the character and strength ofOur company.

6. Management. To foster initi-ative and creativity by allowing theindividual great freedom of action inattaining well-defined objectives.

In discussing HP operatingpolicies, we often refer to the concept of"management by objective." By this wemean that insofar as possible, eachindividual at each level in the organiza-tion should make his or her own plansto achieve company objectives and goals.After receiving supervisory approval, eachindividual should he given a wide degreeof freedom to work within tinl limitationsimposed by these plans, and by ourgeneral corporate policies. Finally, eachperson's performance should be judgedon the basis of how well these individu-ally established goals have been achieved.

The successful practice of"management by objective" is a two-waystreet. Management must be sure thateach individual understands the immedi-ate objectives, as well as corporate goalsand policies. Thus, a primary HP manage-ment responsibility is communication andmutual understanding. Conversely,employees must take sufficient interest intheir work to want to plan it, to proposenew solutions to old problems, to sticktheir necks out when the!, have some-thing to contribute. "Management byobjective," as opposed to management bydirective, offers opportunity for indkid-ual freedom and contribution, it alsoimposes pn obligation for everyone toexercise initiative and enthusiasm.

In this atmosphere, it is

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important to rewgivize that cooperationbetween individuals and between operat-ing units is essential to our growth andsuccess. Although our operations aredecentralized, we are a single companywhose overall strength is derived frommutually helpful relationships and fre-quent interaction among our dispersedbut interdependent units.

It is important, as well, foreveryone to recognize that there are somepolicies which must be established andmaintained on a company-wide basis. Wewelcome recommendations on thesecompany-wide policies from all levels, butwe expect adherence to them at all times.

7. Citizenship. To honor ourobligations to society by being an eco-nomic, intellectual, and social asset toeach nation and each community inwhich we operate.

All of us should strive toimprove the environment in which welive. As a corporation operating in manydifferent communities tluougliout theworld, we must make sure that each ofthese communities is better for ourpresence. This means identifying ourinterests with those of the community; itmeans applying the highest standards ofhonesty and integrity to all our relation-ships with individuals and groups, it

means enhancing and protecting thephysical environment, building attractiveplants and offices of which the commu-nity can be proud; it means contributingtalent, time and financial support toworthwhile community projects.

Each community has its par-ticular set of social problems. Our

company must help to solve these prob-lems. As a major step in this direction,we must strive to provide worthwhileemployment opportunities for people ofwidely different backgrounds. .kavongother things, this requires positive actionto seek out and employ members ofdisadvantaged groups, and to encourageand guide their progress toward fullparticipation at all position levels.

As citizens of their commu-nity, there is much that HP people canand should do to improve it -eitherworking as Ind/ iduals or through suchgroups as churches, schools, civic, orcharitable organizations. In a broadersense, HP's "community" also includes anumber of business and professionalorganizations, such as engineering andscientific societies whose interests areclosely identified with those of thecompany and its individual employees.These, too, are deserving of our supportand participation. In all cases, supervisorsshould encourage HP people to fulfilltheir personal goals and aspirations iu thecommunity as well as attain their individ-ual objectives within HP.

At a national level, it is

essential that the company be a goodcorporate citizen of each country inwhich it operates. Moreover, as individ-uals our employees should be encouragedto help in finding solutions to nationalproblems by contributing their knowl-edge and talents.

The improvement of oursociety is not a job to be left to a few; itis a responsibility to be shared by al.

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TECHNOLOGY TRANSFER FOR ENHANCED RESL ARCH DEVELOPMENTTEST AND EVALUATION EFFECTIVENESS

Ninon E. Essoglou

This talk will be divided into twoparts. First, I wish to discuss a shortfallin our present philosophy and system forrewarding individuals. We do not rewardthem for transferring technology.Rather, we reward them for the opposite.The second part is our Nuval FacilitiesEngineering Command case history ofdesigning and implementing a system tomanage research, development, test, andevaluation aimed at improving the oddsfor effective transfer of our laboratories'results.

Our organizations exist in a state ofcompetition with one another becauseour society is competitive. We assumethat a purpose for RDT&E is to producetechnologies which may be used. Yet wehave models and notions about technol-ogy transfer and the accomplishment ofcreative endeavor that are not in tunewith the real reward systems for individu-als in our organizations. If we truly wantto improve our RDT&E effectiveness andenhance the level of our transfer of tech-nology into use, we need to revise ourreward systems for those accountablefor the transfer of the technology in ourorganizations.

Research and Development Management.Production Stimulation ThroughTechnology Transfer

PUTTING RESEARCH ANDDEV LOPMENT TO WORK

Technology flow

TransferDiffusionUtilizationImplementation

Our organizations, indeed, the

entire industrial society, cannot functionwithout the flow of technology. It mustflow just as money must flow. Manyterms have been used by academiciansand practitioners to differentiate variousforms of technology flow. These areextensively defined in the literature.Irrespective of terminology, we are

interested in flows because the forcesbehind them provide the stimulus forputting technology to work. Investmenteconomics dictates that we increase therate of effective transfer through applica-tion or implementation.BRAINS, NOT PAPER

Technology is not reportsTechnology is knowledgeReports do not workPeople workWork output is the onlymeasure of technologytransferNot the paper or wordsdistributed

Even while acknowledging theabundant contrary evident in theliterature, we continue to act on themisconception that technology consistsof reports. This is shown by organiza-tional activities. For example, we areobsessed with ensuring wide distribution

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of reports, but at the same time curtailtravel essential to meeting people in-volved in the production and applicationof new technology. While we are quickto acknowledge that technology is

knowledge within an individual, ouractions don't show this nearly oftenenough.

We seem to forget that technologytransfer occurs when people do work.Transfer does not occur when reports aredistributed or received. Unless there isevidence from the work output of people,there is no good measure of how muchtechnology has been transferred. While itmay be essential to make distributioncounts of paper and reports, these countsare only a measure of the effectiveness ofour shipping system. The movement ofindividual knowledge cannot be ascer-tained unless reflected in use, or betteryet, unless the receiver or user tells us ofimprovement benefits. Today's informa-tion channels are so many and complexthat we must have the user's cooperationto learn which channel was the effectiveone. This is important to us in thetechnology production business becauseit is we who must account to corporate orcongressional management for the appli-cation effectiveness ot our RDT&Eexpenditures.

The Effect of Competition onTechnology Transfer

COMPETITION AND TECHNOLOGYTRANSFER

Competitive edge requiresone not to give away knowl-edge/ideasTechnology Transfer

requires disclosure and communicationCan technology transfer co-exist with competition in oursociety?

As members of an industrial societybased on survival through competition,we are severely handicapped in the use ofcommunication necessary to promotetechnology transfer and report on itseffectiveness. In many environments,ideas and knowledge must not and cannotbe shared freely if a competitive edge isto be maintained. Technology flows canoccur only within the market exchangecontext. The owner of technology neednot sell until the price is right. Similarly,individuals within an organization willnot give away their knowledge, whichthey regard as their intellectual property,without assurance that they will obtainsome benefit, such as pay, security,power, prestige, and so forth. Theycannot, furthermore, admit that theiroutput owes too much to the work ofothers because they are rewarded primar-ily for their own creativity and innova-tion.

Technology Transfer Differences BetweenIndustry and Government

TECHNOLOGY TRANSFER MODELSDIFFERENTIATION

IndustryModel of technology transferin a competitive (for sale andfor profit) worldGovernmentModel of technology transferfor public good

individual and organization value

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systems in industry are quite differentfrom those in government. Of course.there are affinities but we will disregardthose for the moment.

In industry the transfer of technol-ogy is obviously tied to the profit orienta-tion of the organization. Money is themedium fur inducing or obstructing tech-nology movement. For the right price,technology is bought and sold routinely,

In the public sector on the otherhand, technology transfer occurs, at leastin theory, when the "public good" war-rants it. This is greatly different from thesituation in industry. Public servants aeexpected to engage in activity promotingtechnology transfer because it is pre-sumed to be in the public's interest. It istheir legal duty to do so because theirtechnology has been generated withpublic funds.

Obviously the reward and motiva-tion structures are not alike. Governmenthas a duty to disclose; industry has a dutyto sell and make a profit. The differencedoes not simply derive from the competi-tive nature of industry, for the competi-tive forces have also penetrated govern-ment bureaucracies. Fierce competitionwithin and among public agencies andvarious power games of considerablecomplexity lead to various forms ofsecrecy, withholding or delaying oftechnology. The organizational climatediscoprages and in many cases forbidsacknowledgement of knowledge havingbeen imported from another group withwhich the organization nay be havingjurisdictional disputes. Unlike industry,government does not have an acceptedprice concept for transferring completely

or partially developed technology as in asales contract. Frequently, the onlyreward for the government employee ororganization producing n new technologyis the documentation recorded in tech-nical reports and professional journals.

Risks of Nair - Transfer

TECHNOLOGY TRANSFER OCCURSWHEN THE RISKS OF NON-

TRANSFER ARE GREATER THANTHE RISKS OF TRANSFER

Laboratory to operationsLaboratory to laboratoryOperations to operations

Transfer occurs when the conse-quences of not using a technology areapparent to source and/or the user. Con-sider the following three source combina-tions in user transfer patterns associatedwith risk:

I. Laboratory to laboratory:Transfer may be inhibited byindividual or organizationalcompetition. The competi-tion may be for power,security, or some other need.

2. Transfer from a laboratory:source to user. This form isusually less burdened byprofessional jealousy becauseof relatively clean demarca-tion lines between the rolesof the personnel involved.There is less likelihood thatcompetition survival consider-ations will inhibit flow. Usersseeking security tend not toinhibit adoption of unfamiliartechnology unless they per-ceive a threat to their com-

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petitive posture. The desireand need to import technol-ogy which is new to theimporting organization areprobably driven by competi-tive pressures. Willingness totake the risks inherent in

adopting a new technology islikely to increase when thecompetitive threat has growngreat enough. However, thetendency will be to look for atechnology producer who canbe trusted.

3. User-to-user transfer: Trans-fer occurs when a potentialuser chooses to accept a

technology from an actualuser from within or outside.The most celebrated innova-tions seem to occur when atechnology has crossed indus-trial lines. Depending on theinstitutional setting, technol-ogies can be stolen, pur-chased, or acquired throughcompetitive transfer agree-

ment.Reward considerations cause a

strong bias against acknowledging theunportation of technology in favor ofoverstating locally conceived innovativecontributions. Perhaps the only excep-tion to this occurs when technologyacquisitions are conducted in an explicitpolicy climate that opts for the acquisi-tion of technology from outside ratherthan creating :t from within. When

practiced by groups, this is called "prod-uct development strategy", when prac-ticed by individuals, "specialization."

Conditions Needed for CooperationESSENTIAL CONDITIONS FOR

COOPERATION IN GOVERNMENTa Only between persons

or organizations ofcomplementary/equalstatureWhen risk for non-co-operation is greaterthan the risks of coordi-nation for transfer

IN INDUSTRYContractual/monetaryconditions must bemutually acceptableOther conditions are

secondaryIn government organizations, trans-

fer which is openly acknowledged is mostlikely to occur between those of equal orcomplementary position. When thesource is somewhat more powerful, theweaker, less prestigious user is likely tofind a way to reject the innovation orseek to take credit for it. Most systemsof rewarding innovation which control amultitude of individuals and groupactions tend to suppress efficient impor-tation. Not only are these reward sys-tems extremely complex, but they areoften not sufficiently explicit to be recog-nized.

As previously postulated, the trans-fer process in industry sums to be astraightforward function of 4.-mtractualand monetary conditions. if the importa-tion of a technology is seen as moreprofitable than local innovation, it mostlikely will occur. Provided the producta winner, the individual and the team willbe rewarded for keeping costs down. Re-

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wards are derived from any technology,whether locally generated or imported, aslong as it results in products whichuniquely please customers. More thanflat-out importation is usually involved,the imported technology is mocitlee andsprinkled with innovations in ar att,:mptto beat the competitor's product.

Characteristics of Technology FlowPatterns in Government and Industly

TECHNOLOGY TRANSFERGOVERNMENT/INDUSTRY

IndustryMarket Competition

AchieveLead

a SecrecyPublic Welfare

IncompatibleGovernment

Market CompetitionIncompatible

Public WelfareOpennessCooperationTeth Transfer

The forces toward achievement,market leadership, and secrecy prevailingin the industrial world of competition arein sharp contrast to those for opennms,cooperation, and transfer, characteriz.ngthe expected role of government organi-zations as they work for the public good.Because this is serrIcthiug of an overgenc :-alization, it is doubly important to besensitive to the danger of applyinggovernment.derived recommendations .oprivate sector situations and vice versa.When all is said and done, incentives rortransfer in the private sector are govenxd

by the need to keep innovations secretuntil they can be converted into profit.On the other hard, public sector technol-ogy is likely to be freely disseminated atthe public's total or partial expense.

The Transfer Role of Operating ManagersOPERATING MANAGERS ANDTECHNOLOGY TRANSFER

Management by. results andobjectivesState what but not how!Technology transfer functionmust always be subordinatedto profit center's objective(cost, schedule, and perform-ance)

Operating managers must applytechnology transfer considerations asintegral elements of their daily activities.Technology transfer is frequently talkedabout, especially in settings and amongindividuals seeking to promote it as if itexisted all by itself and outside the realoperating world. We recognize thatmanagers drive for results. All managers,whether in the private or public sector,try to reach objectives. This is what theyare there for. Any attempt to superim-pose technology transfer management asa separate entity on top of the manager'salready-existing burden is thereforebound to fail.

Faced with a dynamic and riskysituation, operating managers are im-pelled to stabilize their activities as muchas they can. If technology input is asource of instability, they may choose to-hut it off or at least control it. Thus,any technology from whatever sourcemost provide a benefit within recognized

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messions and established schedules.Operating people have too much to dealwith to add yet another activity dubbed"technology transfer." On the otherhand, when exporting technology is partof an operating manager's explicit nth-mon, the connected activities are com-monly incorporated in functional entitiescalled systems. Production, distribution,marketing, and selling systems are manytimes components of the technologytransfer effort even though this is notreflected in their labels.

Imnrations and Realities in ManaehigTechnology Transfer

ASPIRATIONS AND REALITIES OfMANAGING TECHNOLOGYTRANSFER

Ideally we want to:ControlDirectAssure couplingFeedback

Realistically we settle for:Distribution of paperOpportune talkDiffusion

The management of technologyflow is one of the many "other" jobs ofthe technical manager. The managerialcontrol function, often considered theessence of management, seems to havedominated thinking regarding technologytransfer. Perhaps the belief in the needfor close control is also attribittsble tothe usually deterministic engineeringbackground of technical managers. As

engineers, we would ideally like tocontrol, direct, couple, and obtainfeedback from our efforts to move

teduoilogy. It is norinal and natural totry to control something, for which you

are accountable. [towel cr. managersmust often settle for controlling thedistribution of paper reports. seizingopportunities to promote the productwhenever possible, and hoping for diffusion to reach deep and wide within theworld of potential users. There is a gulfbetween directed and controlled transferand unmanaged diffusion lint it neednot necessarily k frightening.

The great burden of transfer andaccounting for it ha, been placed on theproducers of technology, at least in thepublic wetor. Since these producersspend the bulk of research and develop-ment dollars, potential users frequentlyperceive the expenditures as questionableinvestments, placing the burden of proofof need for research on the producers.Measuring the effectiveness of transferhas been tried by many. It is at once aformidable and a hopeless task.

Precisely because of the difficultyand insistence of top managers to meas-ure transfer effectiveness as a price forgetting R&D dollars, we must try yetanother approach. asking the technologyuser to freely report which of all thetechnology "messages" sent have been"received" in the sense of effecting actualadoption. I believe that reports byindividual users are the only real andaffordable way to measure effectivetechnology transfer. In sum, only the"using" individual can tell us just howmuch of all the information transmittedhas re tilted in the use of a particularproduct or problem-solving event.

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The Effect of Value Systems on ThInsferMeasurement

MEASUREMENT OF TECHNOLOGYTRANSFER IMPEDED BY OURVALUES

Wolk out,.at measures one'sworthUtility model: useful prob.!ems, solved efficientlyAesthetic model: Creativity,originalityHybrid model:, creative prob-km solvingTo acknowledge technologytransfer is to rick reward fororiginalityWe do not reward "copying"

Measurement of technology trans-fer is dependent on value systems. In oursociety, a worker's worth is generallyassociated with his/her output. This out-put must be useful. For an engineer, themeasurement is of efficiency in problemsolving, Creativity and originality are alsoexpected, not only because they contrib-ute to efficiency and effectiveness, butalso for aesthetic reasons. They, too, areelements of our culture.

As previously emphasized, it isrisky for someone working hr our com-petitive society which rewards originalityand creative problem solving to acknowl-edge technology import or indebtednessto others. Copying, importing, andadapting, even if done efficiently and in atimely manner, are honored less thaninnovating or creating. As long as ourrewards are so heavily hound up withinnovation, only an individual with astrong professional ethic, secure in pyand recognition, and with a good sense of

fair play can be counted on for honestfeedback on transferred technology. Tk,:sis my crucial to us, the technoI ogy-producing community, for as prod Jeersand exporters of technology, wo treconstantly asked to show how much ofand how effectively our technology wastransferred Into productive utilization. It

that top management has bur-dened the wrong side to produce objec-tive measurement for technology transfer-red, at least in government. Virtually alltechnology transfer studies have beenduetted anti undertaken by R&D peoplewhen, in fact, thr, tilould have beenundertaken by engik.ering, design, pro-duction, eonstructioo, marketing, andsales peonle. We are forced to pay fromour R &!) accounts for the measurementand reporting of the ultimate net worthof our product to the enterprise, whenthat enterprise is run by operators andusers rather than technology producers.Does top management realize this? Ifthey do, should they not adjust organiza-tional value systems to reward transferactivities?

How Can Transfer Effectiveness BeEnhanced?

THE ULTIMATE AND OFTEN THEONLY MEASURE OF TECHNOLOGYTRANSFER IS TO OPENLYACKNOWLEDGE THE INFLUENCEOF ANOTIlEP PERSON' i WORK.

But this is a plater of:One's professional ethicOne's sense of security, pay,and recognitionOne's sense of (airplay(Or back to Malow?!)

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Chapter 7 83

I suggest that there are four propo-sitions which may open the door toopportunities for managers concernedwith the enhancement of research effec-tiveness through technology transfer.

1. Openly recognize technologytransfer activity in govern-ment to be as legitimate asmarketing is in industry.Provide professional and

organizational status withbudget and responsibilitydefinitions.

2. Either financially support orabandon demands on the

technology producer for evi-dence of technology transfer.Too much burden now existson the generator or exporterof research and developmentresults, and not encl.:1;h onthe importer or user.

3. Reward problem solving di-rected to modifying andadapting a technology fortransfer at least as much asthat connected with creatingor inventing a technologicalinnovation.

4. Reward those who voluntar-ily acknowledge the extent oftheir dependence on ideasand technology created byothers in adapting a technol-f$'61 for use.

Management of RDT&D for EffectiveTransfer in a Public ilgency. A Case

Over a period going a long wayback, the Assistant Commander for

S4 Chapter 7

84

RDT&E of the Naval Facilities Engineer-ing Command has persistently promotedresearch on technology transfe. concepts,theories, methods, and practices to helpdevelop fundamentally sound RDT&Emanagement goals. We now believe thatwe have succeeded in creating a formalmanagement structure based on technol-ogy transfer principles. While oor systemis still a bureacracy. all of our procedureshave been realigned and rationalized so asto promote invc Ivement of the customer.In particular, delivery of information tothe customer is 3n a form such that uponcompletion, we in RDT&E can count oneffective transfer and implementation.

Technology infer llistog of tne NavalFacilities Engineering Command

Our command's traceable i:oncernfor research effectiveness through betterutilization is summarized in Figure 1.

The periods of intense activity coincidedwith active military leadership by indi-viduals with a great deal of perceptionand commitment to technology transfer.During these periods, we were fortunateto have effective leadership from theAssistant Commander for RDT&E at ourWaAington headquarters and fromCommanding Officers of the Naval CivilEngineering Laboratory in California.The apptwent slackening of activity in themid-to-late '70s is primarily attributableto a shift of focus toward building newRDT&E programs to meet demands forgrowth.

One of our initiatives in 1970 wasto commissioi, the Naval PostgraduateSchool at Moi.terey, California, toperform research on the technology

1962 RDT&E Assistance

1964 RDT&E Utilization

1965 Mandatory Task Proposals

1966 Technology Transfer

A. Applications Division

B. RDT&E Liaison at Field Level

1967 NCEL Report Utilization

1970 Naval Post Graduate School (NPS)

1970 NPS Technology Transfer Study

1971 Technical Data Sheet

1971 NCEL Field Engineering Support office

1971 RDT&E Assistance Doubles - $100K to S200k1974 NCEL/NAVFAC Workshop

1981 Advanced RDT&E Transition Planning

1982 NAVFAC RDT&E Management Instruction

1983 Increased NM. Field Liaison Program

1985 Briefings to Industry

41=11101111,111118111111111111111111

Figure 1. Chronology of NAVFAC's Technology Transfer Efforts.

transfer process specifically applicable toour Navy Facilities world. We are all en-joying the fruits of that undertaking heretoday. By far the most significantcontribution to our research managementis the Linker Model, which neatly struc-tured conditions whose fulfillment deter-mines the extent of effective informationtransfer from a source to a user. Itapplies to lateral transfers, laboratory tolaboratory, and user to user, as well as tovertical transfers from laboratory to user

and vice versa. _.,is model is shown inFigure 2. We consider the Linker Modelas the cornerstone of our technologytransfer model embodied in ourNAVFAC RDT&E management process.This ,model will be shown later.

We have integrated the principlesand experiences reported in technology'transfer literature into the mainstream ofRDT&E management. Our effort totransfer technology from the laboratoryto the operating world does not start

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Chapter 7 85

Selection of Project

Information Documentation

information Distribution

Technical Credibility

Linker (Source and/or User)

(User Oriented)

Formal Organization

Capacity of Individual

Reward/Penalty

a Willingness to Receive and Transmit

NOTE The user may also be a source of information which the researcher mayneed for his work.

SOURCE: Creighton, J.W., J.A. Jolly, and S.A. Denning. Enhancement ofResearch and Development Output Utilization Efficiences; Linker Con eptMethologies Ix the Technology Transfer Process. U.S. Naval PostgraduateSchool, Monterey, CA. June, 1972.

Figure 2. The Linker Model.

upon complethn of a research task. Wehave instituter!, a process that eves theultimate user ownership of the projectfrom the very start of research. We putour customer-users ,ir, the driver's seat byasking them to "approve' and "specify"at critical points of atsearch activity, ashown in Figure 3. Our management

philosophy for REI&E execution is

based upon lihik user- producer dialogue.Most important is the customer's apprtrial of the initiation decision report, Figure4, and the Test and Evaluation masterplan, Figure. 5. As the titles suggest, these

important documents give potential usersof out research active control over thedirection, the duration, the goals to bepursued, and the reports to be produced.They can keep informed of progress andparticipate in decisions at intervals in thedevelopment process.

We have also redesigned ourRDT&E documentation practice. Ouroutput has traditionally been a laboratorytechnical report, primarily intended todocument the RDT&E technical activity.These reports were written for technicalpeers and the R&D community, and to

86 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

86

ASST CDR(USER CODE)

EXPRESSION OF INTEREST

03. LABS

APPROVE IDR I----(AGREE ON NEEDS & GOALS)

T

PRODUCE IDR

PROPOSE DELIVERABLES

SPECIFY DELIVERABLES I-----

PRODUCE TEMP

APPROVE TEMPI--

i'----------1OPERATIONAL

(ACCEPT/REJECT) 1----TEST/EVAL

.....5

1PERFORM & REPORT

INTERIM FEASIBILITYDEVELOPMENT TESTS

* FINAL FEASIBILITY

PRODUCEUSER DATA PACKAGE

IMPLEMENT "ma ONO NG a 0 .1 %WEI -1I

IMPLEMENTATION FOLLOW.UP

TONITIIPMMINIMINIMINISIMINIMAIIMIIMIIIIIIIIIIIITTMIG

Figure 3. NAYFAC User/Producer Dialogue For RDT&E.

Chapter 7 87

8 7

NOTE: Primarily for Problem-Driven 03 Research

Initiatives with Active User Involvement.

1. PROBLEM DEFINITION

EVIDENCE

QUANTIFICATION

(EXTENT, FREQUENCY, DURATION)

2. STATE-OF-THE-ART ASSESSMENT

CURRENT PRACTICE

COMMERCIALLY AVAILABLE TECHNOLOGY

3. TECHNOLOGICAL PROJECTIONS

IDENTIFY TECHNOLOGY AREAS

TRACK RDT&E BY OTHERS

LEVEL OF INTEREST

DIRECTION

RATE OF CHANGE

4. ALTERNATIVES

(RISK, PAY-OFF, COST, TIME TO COMPLETE)

5. TECHNOLOGY GOALS

DEFINE TARGET

6. CAPABILITY GOALS

INTEGRATED R&D TASKS

TECHNOLOGY IMPROVEMENT

SYSTEMS DEVELOPMENT

COMPONENT DEVELOPMENT

F;gure 4. Initiation Decision Report (IDR).

88 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

88

1. MISSION (PLANNED USE)

2. SYSTEM (ITEM)

3. DEVELOPMENT GOALS

PERFORMANCE (OPERATIONAL & TECHNICAL)

LOGISTICS (COSTS, PEOPLE, SUPPORT, ETC.)

4. TEST SCHEDULES

DEVELOPMENTAL (LAB)

OPERATIONAL (USER)

5. TEST ISSUES

6. TEST DATA

7. RESOURCE SCHEDULE

DOLLARS (RDT &E, El, OM&N)

PEOPLE, EQUIPMENTS (EFD, PWC, CBC)

Figure 5. Test and Evaluation Master Plan (TEMP).

account for the money expended. Overthe years we have tried to orient thereports toward the needs of those whowould be responsible for application, andto have the reports written in languageclear for the user. Unfortunately, thisresulted in downgrading the apparentquality of the report in the eyes of otherresearchers, and did not really increasetechnology transfer effectivenfts.Another reading, analysis, interprets:1m,

and writing cycle was necessary to trans-form R&D reports into effective operat-ing publications suitable as planning,design, construction, and maintenanceengineering documents. These are nowdesignated as the command's approvedpublications, and serve as the basis forupdating specifications for actual con-struction or repair projects. The prepara-tion of these criteria publications, knownas guides, manuals, specifications, and so

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Chapter 7 89

forth, has been increasingly contractedout to architect and engineer firms forperiodic update. This, however, reducedthe likelihood that the laboratories'technical report message would ever getinto the command's operation publica-tions, let alone reach the designers andspecifier:, who formulate the actual

projects where benefits from R&D maybe reaped.

To eliminate this "loss-link," wedecided that in addition to "peer-des-tined" laboratory reports we wouldproduce specific user-oriented publica-tions. Figure 6 provides an outline forour user data package. It includes specifi-

1. GENERAL OVERVIEW

2. PLANNING

P-80

OTHER

3. DESIGN

UM

OTHER

4. SPECIFICATIONS

NFGS, MILSPEC, ETC.

OTHER

5. CONSTRUCTION/PRODUCTION

INSP & QUAL ASSURANCE

OTHER

6. MAINTENANCE OPERATIONS

;.10

OTHER

Figure 6. Outline for User Data Package.

90 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

90

cally phrased recommendations for revis-ing old specifications or writing new ones,criteria, standards, and so forth. Noticethat the outline is functionally arranged.The risk and cost to users and their archi-tect-engineer contractors of having totranslate RDT&E reports has beenremoved.

The user data package deliversrecommendations for revising specifica-tions, criteria, and manuals for everyphase of the project's life cycle, such asplanning, design, construction, and main-tenance. This was done deliberately andinsures that our development projects arenot narrowly focused but instead addressthe concerns of the various functionalgroups in all our organizations. Previ-ously, implementation would be delayedif one aspect of a project was not suffi-ciently addressed. Pressure for thegeneration of the user data package camefrom the following sources:

1. For many years the Depart-ment of Defense has empha-sized that the logistics sup-port aspects of a project beaddressed with as much thor-oughness as the develop-ment of the project itself.Many a good developmentproject failed or took toolong to implement becausewe had neglected to developit within support constraints.Similarly, within our com-mand many an accomplish-ment was never implementedbecause its maintenance andoperation had not been con-sidered along with the devel-

1,

opment of design criteria.3. Jurisdictional disputes be-

tween planners, designers,and constructors, and themaintenance and operatingfactions of our organizationwere often disrupting, foreach might sponsor researchin its own functional areawith resulting incongruence.The data package enables usto define the end product forall RDT&E investments so asto include all work requiredto meet performance im-provemeats and life cyclelogistic support. When all ofthis information is in one re-port, it makes it easier for ourfunctionally fragmented andgeographically scattered usercommunity to implement.

The Management and Mode forTechnology Transfer

Our management system conformsto the Creighton-Jolly technology trans-fer model which is simply a list of factorsidentified as necessary for the movementof technology. The four formal factorscontained in the list are:

1. Project selection;2. Documentation of informa-

tion;3. Distribution of information;4. The formal organization.

The five informal factors are:5. Credibility of persons in-

volved;6. Capability or capacity to

perform;

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Chapter 7 91

7. Willingness to perform;8. The linking function;9. Reward.We have attempted to take advan-

tage of each function in the model in thefollowing ways:

(1) Project Selection. Involve-ment of potential users inproject selection considera-tions throughout the lifecycle of the project is assuredby the requirement for theirapproval of the initiationdecision report.Information Documentation.This function consists of thedescriptive format.Information Distribution.Adequacy of informationdocumentation and distribu-tion is assured through thedeliverables agreement whichitemizes the stream of deliv-erables and the users' contri-butions in specifications forthe user data package. EachR&D program manager isrequired to keep current onprogress of programs andprojects, and is responsiblefor directing the distributionof reports through the usercommunity.

(4) Formal Organization. Theresponsibilities and barriersimposed by the Navy's formalorganizations have been fac-tored into the design of theuser data package. Thispackage recognizes the Navy-user as a matrix of organiza-

(2)

(3)

Lions and people.(S) Credibility. Technical credi-

bility of the source is ulti-mately assured by the users'independent operational testand evaluation for :,:e.ceptanceor rejection of the R&Dproduct. Credibility buildupstarts with the initiationdecision report, and contin-ues as the researcher andpotential user keep eachother informed during devel-opment.

(6) Willingness. The users' will-ingness to receive an endproduct is cultivated anddeveloped by involving themfrom the time of decision toinitiate to their decision toaccept. Approval of the testevaluation master plan putsusers under obligation toaccept, at least for trial,unless their needs havechanged. Cooperation be-tween the researcher and theproduct user develops willing-ness on the part of both totransmit information neededby the other for effectivedesign of a master plan, andfor establishment of testcriteria. The need for willing-ness, both to receive and totransmit, is extremely impor-tant if test evaluation masterplans are to be effective.Technical Capacity. Capacityis closely related to willing-ness, for without technical

(7)

92 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

92

capacity to transmit andunderstand evolving techno-logical changes, an individualis likely to refrain fromcontact with others involvedin the technology. Theinitiation decision report, thedocumentation agreement,the test and evaluation masterplan, the test and evaluationplan, and the user datapackage must all be under-stood. The requirement toget involved in all of these is astrong incentive toward con-stant update of capacity.

(8) Linker. Without some formof linkage, a new technologycannot find a use-sponsor.All of the methods andprocedures developed to en-courage the movement andprocedures developed to en-courage the movement ofR&D products into use areformulated with linkage inmind. The various systemswhich have been devised withthe common intent to bringproducers and users of tech-nology together so that natu-ral linkages can be establishedand extended. Without link-age, there can be no successin the program.

(9) Reward. Systems for reward-ing or penalizing users foraccepting and implementingnewly emerged technologiesor failing to do so are beyondthe responsibilities of our

R&D mangers. It is myspecific proposal in this talkto move forward, altering thereward/penalty structure soas to create the largest possi-ble scope for technologytransfer. Such a departurefrom prevailing practice isalso badly needed to obtain atreasure of the effectivenessof the transfer process. Wemust encourage, rather thandrive undergroundin thename of original thinking orlocal adaptationthe cheerfuladmission that a good ideataken from a source, whetherfrom an R&D lab or else-where, was put to good use.The stigma attached to adapt-ing or copying successfultechnologies must be re-moved.

The Management Transfer MatrixAs we designed the NAVFAC

RDT&E management process, we at-tempted to relate the various steps to theCreighton-Jolly transfer model. Thematrix shown in Figure 7 indicates thosesteps in which the transfer elements aremost important.

The need for linking is pervasivethroughout the management process, forthe identification of early adopters andnegotiations for transfer are crucial ateach step in the movement of innovationsfrom concept to use.

Of course, the need to rewardindividuals is ever present and is exercisedin each segment of the R&D organization

93

Chapter 7 93

NAVFACROT&EEVALUATION STEPS

TECHNOLOGY TRANSFER FACTORS

Iii...I .11

,..I 1

loitratmo fOR X XX X

Disown Relied

DorsoosoNtion DEL X X X X X

DithirrobisAdroomont

TIM sod TEMP X X XX

Etolootson14,119f Pion

Oporotimisi Test OTEomi Emiosoon

X XX XX

Uses Deirr UOP X XX XX 0 X

P*CitaN

POOL Delivery APP X X

AdoorossI of

Insplariormstionby R&D

X irrowousit Todiriology Tom os factor emotion pilots

XX Aram of *dorms. impostor.** Spoori *Mot is mods at show pion SoMOWS hoisioncre of sidisiontios MOM ,lit Imps& ionise mopes.

0 Dm rassossl/ponofry aysioso Nolossfooy sows is *mores the jorisdimion

of :As ROT&E doroms. Somosolvi and b000fisal mots hods on of So

.leg UOP Oralitala loosed for taw, Rosewd fat Ho ROTEproms moats hem the sabsowitee of Ms OOP by errs sod plumyopproisaf of iropissmooloSion.

Figure 7. Te:hmcal Transfer Factors (Creighton Doily Model) Principally

Involved at Each Stage of the NAVFAC RDT&E Management Process,

94 Technology Transfer: A Think Tank Approachto Managing Innovation in the Public Sector

94

as warranted. However, reward for theRDT&E system as a whole results fromacceptance of the UDP, trial, and success-ful implementation.

A better system is needed to rewardthose in engineering operations whoimport technology efficiently and openly.Today's reward practices, geared heavilyand mainly towards local innovation,would seem to discourage adopting goodproven technology in favor of "localingenuity." And when technology isadopted there is a disinclination to creditthe source.

Conclusion

In conclusion, I ask that you studythe propositions presented in the firstpart of this paper. We need to impro.toperational productivity and avoid thehigh rost of locally innovated marginalpursuits. We must transfer technologyquickly and reward those rho do soquickly and efficiently. Our obsessionwith rewarding original thinking isblocking us from ready rneasurenArt oftechnology transfer. As an R&D man-ager, my productivity will bereft: if Idon't have to squander my resourcestrying to chase around and report on how

well my technology was transferred andimplemented. It is ironic that the seniorexecutives who ask R&D management tomeasure and report on the effectivenessof transfer efforts are more often thannot from the operating sector or the userenvironment. Could it be that they knowrust hand how little corporate R&D hashelped them, so that now, from theirposition of authority, they can make theR&D community squirm? Could it bethat they are protective of their own kindin the mainstream of operations? Couldit be that they simply have not Thoughtthrough alternative processes for themanagement of R&D as I have tried to doand illustrate in this talk? I suggest thattop management ask the users to accountfor implementation and payoff from newtechnologies by rewarding them for andacknowledging the source of innovationsin their reports.

Creighton, J.W., J.A. Jolly, andS.A. Denning. Enhancement of Researchand Development Output Utilisation Effi-ciencies, Linker Concept Methodologiesin the Technology Transfer Process. U.S.Naval Postgraduate School, Monterey,CA. June, 1972.

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Chapter 7 95