RD Project Management

One of the most difficult tasks in any organization is the management of R&D activities. These R&D activities are usually headed by scientists, engineers, managers, employees, or even executives. All of these people, at one time or another, may act as R&D project managers. They start out with an idea and are asked to lay out a detailed schedule, cost summary, set of specifications, and resource requirements so that the idea can become a reality. Unfortunately, this is easier said than done.

Project management is an attempt to obtain more efficient utilization of resources within an organization by getting work to flow horizontally as well as vertically. Furthermore, all projects must be completed within the constraints of time, cost, and performance. If the project is for an outside customer, then there exists a fourth constraint—good customer relations. Without proper training and understanding, R&D project managers might easily manage their projects within time, cost, and performance, but alienate the outside customer to such a degree that follow-on (or production-type) contracts are nonexistent.

R&D personnel were probably the first true project managers in the world. Unfortunately, very little training was available until the vanguard of modern project management occurred in the late fifties in aerospace, defense, and construction companies. Even today, twenty-five years later, very little project management training is provided for R&D personnel.

R&D personnel are technically trained perfectionists who believe that cost and time are unimportant when it comes to improving the state of the art. R&D personnel would rather crawl on their hands and knees and beg for more money and time than admit defeat on an R&D project. The more degrees an individual has, the more reluctant he is to accept defeat.

R&D personnel have been stereotyped and subjected to more criticism than any other employees, even engineers. R&D personnel are considered to be ego-

centric, spoon-fed, coddled individuals, sitting in small corners of laboratories, who are provided with hand calculators so that they can get excited once in a while. The stereotypical R&D project managers avoid people contact whenever possible. They cannot communicate well, write reports, or make presentations. They are illiterate except when it comes to complex graphs and equations. And yet they are consistently placed in charge of projects. In most project-driven organizations, there is usually strong representation of former project managers in top echelons of management, but how many senior corporate executives or CEOs have come out of the R&D ranks? Could it be that this inappropriate stereotyping has prevented R&D personnel from rising to the top?

The R&D Environment

Very few people in an organization truly understand the R&D environment and the problems facing the R&D project manager. We continually ask the R&D project manager to achieve an objective that even science fiction writers haven't thought of, and that requires technology that hasn't been discovered yet. We further ask him to lay out a detailed schedule, with established milestones and predetermined costs set forth by some executive, and then inform him that he may have trouble obtaining the resources that he needs.

After he establishes his schedule, executives change the milestones because the schedule affects their Christmas bonuses. And when the project finally gets on track, marketing pushes the end milestone to the left because they wish to have earlier introduction of the project into the marketplace in order to either beat or keep up with the competition.

The project manager therefore finds that he must do his work in seclusion, avoiding meddling from executives, marketing, and manufacturing. The avoidance of the manufacturing group ultimately leads to the R&D project manager's downfall because he finds out too late that manufacturing cannot mass-produce the item according to the R&D specifications. Who gets blamed? The R&D project manager, of course! He should have been communicating with everyone.

The R&D environment might very well be the most difficult and turbulent environment in which to manage a project. The remainder of this section describes this problem in R&D project management in hopes that readers will better appreciate those individuals who accept R&D project management as a career.

Detail Scheduling: Fact or Fantasy?

Scheduling activities for R&D projects is extremely difficult because of the problems mentioned above. Many R&D people believe that if you know how long it will take to complete an objective, you do not need R&D. Most R&D schedules are not detailed but are composed of major milestones where executives can decide whether additional money or resources should be committed. Some executives and R&D managers believe in this philosophy:

I'll give you ''so much time" to get an answer.

In R&D project management, failure is often construed as an acceptable answer.

There are two schools of thought on R&D scheduling, depending of course on the type of project, time duration, and resources required. The first school involves tight R&D scheduling. This may occur if the project is a one-person activity. R&D personnel are generally highly optimistic and believe that they can do anything. Therefore, they tend to lay out rather tight, optimistic schedules. This type of optimism is actually a good trait. Where would we be without it? How many projects would be prematurely canceled without optimistic R&D personnel?

Tight schedules occur mostly on limited-resource projects. Project managers tend to avoid tight schedules if they feel that there exists a poor "window" in the functional organization for a timely commitment of resources. Also, R&D personnel know that in time of crisis or fire fighting on manufacturing lines, which are yielding immediate profits, they may lose their key functional project employees, perhaps for an extended period.

The second school of thought believes that R&D project management is not mechanical like other forms of project management, so all schedules must be loose. Scientists do not like or want tight structuring because they feel that they cannot be creative without having sufficient freedom to do their job. Many good results have been obtained from spinoffs and other activities where R&D project managers have deviated from predetermined schedules. Of course, too much freedom can spell disaster because the individual might try to be overly creative and "reinvent the wheel."

This second school says that R&D project managers should not focus on limited objectives. Rather, the project manager should be able to realize that other possible objectives can be achieved with further exploration of some of the activities.

Two special types of projects are generally performed without any schedules: the "grass roots" project and the "bootleg" project. Each type is simply an idea that, with one or two good data points, could become a full-blown, well-funded activity. The major difference between the two is that the grass roots project is normally funded with some sort of "seed" money, whereas the bootleg project is accomplished piecemeal and on the sly. With the bootleg project, employees charge their time to other activities while performing the bootleg R&D.

Working with Executives

Executives earn high salaries because they can perform long-range planning and formulate policy. In general, meddling by project management executives is a way of life because of conflict resolution and the continuing need to reassess project priorities. In R&D, the problem of executive meddling becomes more pronounced because, in addition to the above reasons for his involvement, the executive might still consider himself to be a technical specialist or might develop a sense of executive pride of ownership because the project was his idea. If an executive continually provides technical advice, it is entirely possible that an atmosphere of stifled creativity will develop. If the executive is considered to be an expert in the field, then everyone, including the R&D project manager, may let the executive do it all—and both the project and the executive's duties may suffer.

There is nothing wrong with an executive's demonstrating pride of ownership for a project as long as he does not assert that "this project will be mine, all the way," and meddle continuously. The R&D project manager should still be permitted to run the show with timely, structured feedback of information to the executive. If executives meddle continuously, then the R&D project manager may adopt a policy of "avoidance management," in which executives are continuously avoided unless problems arise.

In general project management, executives should actively interface a project only during the conception and planning stages. The same holds true in R&D project management but with much more emphasis on the conceptual stage than the planning stage. The executive should work closely with the R&D project manager in defining:

• Requirements

• Objectives

• Success factors

• Realistic end date

The executive should then step out of the way and let the R&D project manager establish his own timetable. One cannot expect executive meddling to be entirely eliminated from R&D activities because each R&D activity could easily have a direct bearing on the strategic planning that the executive must perform as part of his daily routine.

R&D activities have a direct bearing on the organization's strategic planning. Executives should therefore provide some sort of feedback to R&D managers. The following comments were made by an R&D project manager:

I know that there is planning going on now for activities which I will be doing three months from now. How should I plan for this? I don't have any formal or informal data on planning as yet. What should I tell my boss?

Executives should not try to understaff the R&D function. Forcing R&D personnel and project managers to work on too many projects at once can drastically reduce creativity. This does not imply that personnel should be used on only one project at a time. Most companies do not have this luxury. However, this situation of multiproject project management should be carefully monitored.

Finally, executives must be very careful about how much control they exercise over R&D project managers. Too much control can drastically reduce bootleg research, and, in the long run, the company may suffer.

Working with Marketing

In most organizations, either R&D drives marketing, or marketing drives R&D. The latter is more common. Well-managed organizations maintain a proper balance between marketing and R&D. Marketing-driven organizations can create havoc, especially if marketing continually requests information faster than R&D can deliver, and if bootleg R&D is eliminated. In this case, all R&D activities must be approved by marketing. In some organizations, R&D funding comes out of the marketing budget.

In order to stimulate creativity, R&D should have control over at least a portion of its own budget. This is a necessity because not all R&D activities are designed to benefit marketing. Some activities are intended simply to improve technology or create a new way of doing business.

Marketing support, if needed, should be available to all R&D projects, whether they originate in marketing or R&D. An R&D project manager at a major food manufacturer made the following remarks:

A few years ago, one of our R&D people came up with an idea and I was assigned as the project manager. When the project was completed, we had developed a new product, ready for market introduction and testing. Unfortunately, R&D does not maintain funds for the market testing of a new product. The funds come out of marketing. Our marketing people either did not understand the product or placed it low on their priority list. We, in R&D, tried to talk to them. They were reluctant to test the new product because the project was our idea. Marketing lives in their own little world. To make a long story short, last year one of our competitors introduced the same product into the marketplace. Now, instead of being the leader, we are playing catch-up. I know R&D project managers are not trained in market testing, but what if marketing refuses to support R&D-conceived projects? What can we do?

Several organizations today have R&D project managers reporting directly to a new business group, business development group, or marketing. Engineering-oriented R&D project managers continually express their displeasure at being evaluated for promotion by someone in marketing who may not understand the technical difficulties in managing an R&D project. Yet, executives have valid arguments for this arrangement, asserting that the high-technology R&D project managers are so in love with their project that they don't know how and when to cancel it. Marketing executives contend that projects should be canceled when:

• Costs become excessive, causing product cost to be noncompetitive

• Return on investment will occur too late

• Competition is too stiff and not worth the risk and so on. Of course, the question arises, "Should marketing have a vote in the cancellation of each R&D project or only those that are marketing-driven?" Some organizations cancel projects with the consensus of the project team.

Location of the R&D Function

R&D project management in small organizations is generally easier than similar functions in large organizations. In small companies, there usually exists a single R&D group responsible for all R&D activities. In large companies, each division may have its own R&D function. The giant corporations try to encourage decentralized R&D under the supervision of a central research (or corporate research) group. The following problems were identified by a central research group project manager:

• "I have seen parallel projects going on at the same time."

• "We have a great duplication of effort because each division has its own R&D and quality control functions. We have a very poor passing of information between divisions."

• "Central research was originally developed to perform research functions that could not be effectively handled by the divisions. Although we are supposed to be a service group, we still bill each division for the work we do for them. Some pay us and some don't. Last year, several divisions stopped using us because they felt that it was cheaper to do the work themselves. Now, we are funded entirely by corporate and have more work than we can handle. Everyone can think of work for us to do when it is free."

Priority Setting

Priorities create colossal managerial headaches for the R&D project manager because R&D projects are usually prioritized on a different list from all of the other projects. Functional managers must now supply resources according to two priority lists. Unfortunately, the R&D priority list is usually not given proper attention.

As an example of this, the director of R&D of a Fortune 25 corporation made the following remarks:

Each of our operating divisions have their own R&D projects and priorities. Last year corporate R&D had a very high R&D project geared toward cost improvement in the manufacturinig areas. Our priorities were based on the short-run requirements. Unfortunately, the operating divisions that had to supply resources to our project felt that the benefits would not be received until the long run and therefore placed support for our project low on their priority list.

Communication of priorities is often a problem in the R&D arena. Setting of priorities on the divisional level may not be passed down to the departmental level, and vice versa. There must be early feedback of priorities so that functional managers can make their own plans.

Written Communications

R&D project managers are not different from other project managers in that they are expected to have superior writing skills but actually do not. R&D project managers quickly become prolific writers if they feel that they will receive recognition through their writings.

Most R&D projects begin with a project request form that includes a feasibility study and cost-benefit analysis. The report can vary from five to fifty pages. The project manager must identify benefits that the company will receive if it allocates funds to this activity. In many non-R&D activities project managers are not required to perform such feasibility studies.

Because of the lack of professional writing skills, executives should try to reduce the number of interim reports, since report writing can seriously detract from an individual's more important R&D functions. In addition, most interim reports are more marketing oriented than R&D oriented.

Many of today's companies have weekly or bimonthly status review meetings where each R&D project manager provides a five-minute (or shorter) oral briefing on the status of his project, without getting involved in technical details. Of course, at project completion or termination, a comprehensive written report is still required.

Salaries and Performance Evaluation

R&D groups have one of the highest salary ranges in a company. R&D groups are generally the first to establish a dual-ladder system where employees can progress on a technical pay scale to high salary positions without having to accept a position in management. In the R&D environment, it is quite common for some functional employees to be at a higher salary level than the R&D project manager or even their own functional managers. This arrangement is necessary in order to maintain a superior technical community and to select managers based on their managerial expertise, not technical superiority.

The R&D group of a Fortune 25 corporation recently adopted a dual-ladder system and found that it created strange problems. Several scientists began fighting over the size of their office, type of desk, and who should have their own secretaries.

The evaluation process of R&D personnel can be very difficult. R&D project managers can have either direct or indirect control over an employee's evaluation for promotion. Generally speaking, project managers, even R&D project managers, can only make recommendations to the functional managers, who in turn assess the validity of the recommendations and make the final assessments. Obviously, not all R&D projects are going to produce fruitful results. In such a case, should the employee be graded down because the project failed? This is a major concern to managers.

Motivation

R&D project managers have no problem with self-motivation, especially on one-person projects. But how does a project manager motivate project team members, especially when you, the R&D project manager, may have no say in the performance or evaluation? How do you get all of your employees to focus on the correct information? How do you motivate employees when their time is fragmented over several activities? How can you prevent employees from picking up bad habits that can lead to missed opportunities?

R&D project managers would rather motivate employees through work challenge and by demonstrating their own expertise. Most R&D project managers prefer not to use formal authority. One R&D project manager summed up his problem as follows:

I have only implied authority and cannot always force the project participants to perform my way. We have used task forces both effectively and ineffectively. We are always confronted with authority and priority problems when it comes to motivating people. Functional managers resent R&D project managers who continuously demonstrate their project authority. Our best results are obtained when the task force members visualize this project as part of their own goals.

Executives must take a hard look at how they are managing their R&D projects. In general, all R&D personnel are project managers and should be trained accordingly, as any other project manager would be. If executives wish to develop an organization that will retain superior personnel and stimulate creativity and freedom, then they must recognize the need for effective organizational communications and alleviate meddling by marketing and the executive level of the organization. R&D project managers are actually the architects of the conceptual phase of the corporation's longrange plans, and it appears that their value to the organization finally is being recognized by management.

Management3

The primary responsibility for success in any organization is in its management. Possibly in research and development, more than any other function, true success depends on upper-level management and other functional managers rather than its own functional management. This dependence on other levels of management is a result of the information and resources required by the R&D function being supplied by other organizational units, which, for example, establish organizational needs for R&D, influence program priorities, control budgets, and coordinate activities outside the R&D structure. Since most upper-level and functional management is not familiar with the systems approach, especially in small companies, the perspective of line and staff management is greatly influenced by functional parochialism and consideration of R&D as a cost center rather than a profit center. In part, this view of R&D as a cost center leads to a commonly implied, if not expressed, feeling that "in good times, who needs R&D because we are successful in what we are doing, and, in bad times, who can afford it?" Another important factor affecting the way management views R&D is the short-term perspective of most of today's managers. Concern for short-term profits rather than long-term objectives such as growth and diversification has a considerable impact on the programs and priorities recommended and supported by

3 The remainder of Section 8.5 is adapted from a course paper by Dr. John J. Miller, "Problems of Informal Project Management in R&D in Small Companies."

functional management. In many cases, functional parochialism and short-term perspectives are reinforced by empire-building attitudes and possibly feelings of inferiority. These attitudes and feelings are, generally, more pronounced when a functional manager has risen from the ranks. This type of manager, although very experienced, may be afraid of new technology and dependent on closefisted control that has been successful in the past.

Within this environment, the R&D manager or director in the traditional organizational structure must be a strong individual. An informal project management system requires that the manager of the R&D organization provide a forceful representation of the function within the company. However, this requires an individual who can conduct a critical balancing game. If the manager is too forceful, he will alienate the organization. Projects that must interface with other functions will receive little assistance or support from these functions. If the R&D manager is weak, the direction of projects will be essentially controlled by the functional groups. R&D projects would then tend to be very short term. There would be many more support programs oriented toward process and quality control. The balancing game played by the manager or director of R&D becomes very time-consuming, and little time is left for technical and administrative responsibilities. In fact, much of the manager's time is spent justifying and rejustifying R&D programs to other functional groups.

Coordination

A nonstructured or informal approach to project management has a major shortcoming in that coordination between R&D and other functional groups cannot be formally established. There is no structure for this formal coordination. Cooperation and assistance from other functional groups on R&D projects is a "beg, borrow, or steal" situation. Although cooperation on programs cannot be effectively mandated even in a formal project management structure, the problem is magnified in an informal project system. Two major factors hinder effective cooperation and coordination in the informal project management system. First, there is little preplanned communication with the functional units. Therefore, the functional units have little knowledge of the project objectives or understanding of how the project, if successful, fits into the goals and objectives of the company. Second, there is no higher authority designated to encourage the coordination of R&D and functional units or to provide conflict resolution.

Training

A handicap of the informal project management approach is that its users lack training and development in project management concepts. There is little or no emphasis on systems theory, systems analysis, and systems management. Without this type of knowledge and training, it is difficult for users of the informal project management approach to obtain or maintain a successful track record, especially in the critical area of the transfer of technology from the laboratory to production. This lack of emphasis on systems and project management concepts is also, at least in many cases, reflected by a lack of concern for the thorough development of the individuals employed in the R&D department. Generally, professional development is focused only on technical areas. Training in nontechnical areas is usually not encouraged and may, in fact, be discouraged. This applies not only to formal training programs, but to informal in-house training programs. This is one reason why technically oriented individuals in the R&D environment have little familiarity with business strategies and business tools. Without some of these business basics, the individuals in the R&D unit can be severely handicapped. First, the R&D project leaders must depend on others in the organization for basic business and financial analyses. Second, communication with administration and other functional units is thwarted, since the individuals involved do not speak the same language. Not only might the technical people not understand the type of information required for business analyses, but also comments made by the engineers or scientists might easily be misinterpreted by the business analysts. Finally, persons with little business background or experience have little chance for advancement outside the R&D environment. This can be an especially difficult problem in a small company where chances for advancement are few and far between. Opportunity for advancement can enhance the spirit of the organization and motivation of employees.

Some individuals within this environment will attempt to learn on their own about the operation of other units or functions of the organization and basic business tools; but, in spite of this type of initiative, learning in such an atmosphere is slow. Unfortunately, these efforts may be interpreted by R&D management and other functional managers as overaggressiveness or meddling. Further self-learning may then be quickly discouraged.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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