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This article is reprinted from
Mass High Tech, February 16,
1998 |
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by Lawrence C.
Grumer, © 1999
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Organizations or individuals seeking to "commercialize technology"
and accomplish it in an efficient, effective, and profitable manner must answer
three questions: Is it real? Can we win? Do we want it? The definition of
technology commercialization varies from organization to organization,
according to each one's core competencies and business goals. In general terms,
it refers to the generation of a business profit from the conversion of
theoretical material or laboratory concepts into real-world commercial
practices.
The seed can originate from research and development
processes or from concepts that are either transferred from one organization to
another or licensed for use in commercial settings
The
commercialization process requires both time and money, but even more
important, it demands the vision and persistence of senior managers who remain
committed to the business goals and strategies of the organization.
he
degree of their commitment to "commercialize technology" and how they bring it
to market will depend on whether the organization or group of individuals is
focused on the technology itself or on the market.
Technology
focused
These organizations predominately participate in research and
development to form the core of their business activities. This may be broadly
based in areas of technology, or in relatively specialized niches in the market
or they may be start-ups. When it comes to revenues, these companies rely most
heavily on federal research grants, contracts, the Small Business Innovation
Research (SBIR) program and commercial contract engineering.
They are
generally not well equipped for large-scale or volume manufacturing, but when
their contract work is characterized by prototyping, proof-of-principle or
first-article-delivery, they create a much stronger position to move toward
commercialization of their technology.
Market focused
Manufacturing and serving product, process or service markets with their
technologies, market focused organizations recognize broader opportunity
horizons for their technology that can leverage their already served markets or
permit new market entry. This group can be purely commercially focused, seeking
a "market transition" of their technology. Or, they may seek greater
diversification and "technology transition (transfer)" such as in defense
conversion or with dual-use military and commercial technologies. Their market
and manufacturing focus greatly compliments their technology
commercialization.
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So how do they answer the basic questions:
- Is It Real?
Organizations must know how their
technologies fir within the targeted marketplace. Technologies differ in their
relative development or the "competitive impact" they confer to users in the
market.
Technologies can be viewed along a continuum beginning with
emerging, in which technology is at an early research stage and it market
impact uncertain; to pacing, where the industry experiments with such
technology and there is likely to be high competitive impact; to key, in which
the technology is well embodied in products and processes, providing high
differentiating competitive impact; to base, when the technology is widely
exploited.
Technology-based organizations face enormous challenges in
taking technology to commercial markets. Companies must know the impact their
technology will have on the market and timing of its maturity in the
product-life cycle. Attempting to market a product whose time has come and
gone, for instance, can spell disaster for a company seeking to position itself
strategically for commercialization.
In contrast, market-focused
companies are more immediately affected by another measure; their relative
"competitive position" for the selected technology. This measure describes the
company's strength in the market for advancing their technology along a
continuum from dominant, to strong, to favorable, to tenable, to weak. They are
better positioned when they can set the pace and direction or technological
development, be recognized for it by their industry and be able to express
independent technical actions and set new directions.
For both groups
a matrix of competitive position versus competitive impact begins to reveal the
technical risk-reward association. A technology due diligence providing
technology assessments, technology forecasts and industry trend analysis is an
essential part of the process.
- Can We Win?
Who has not asked this vexing question? For
entry into new markets, the development of new products, marketing and sales
strategies, companies are frequently forced to choose between in-house
manufacturing or outsourcing. Their choice hinges on the markets they hope to
reach, on selected market channels of distribution, on determination of product
pricing, and on the realistic assessment of their capabilities and needs,
including their chain of suppliers.
A company must be committed to the
goal. To come close to a responsible answer to the question "Can we win?"
executive leaders will first need to demonstrate their full commitment to the
commercialization process. Only then can they hope to align the fundamental and
focused market research effort, strategic market needs assessments and
competitive analysis and perform these in a planned and orderly fashion.
Technology-based organizations need to go beyond their technology domain
to embrace a vision of product, application, utility and value from the
customers' position. Not only must the quantitative data be obtained, but
companies must analyze their ability to succeed in the marketplace.
This can be highly speculative and overly optimistic. The perspective and
commitment from senior management will have the greatest impact in sustaining
the new strategic direction for the company.
Market-focused firms all
too often recognize their strengths in one market and lose sight of their need
to improve in another market. Both groups need to reassess their core
competencies, projected into the future new market scenarios, and honestly
decide if they can sustain a competitive advantage.
Outside
professional services can greatly assist this research and analysis, but only
if senior management refuses to be blinded by outmoded assumptions and
egotism.
- Do We Want It?
Companies need to assess the desirability
of commercialization of a particular technology.
Establishing a
framework-for-analysis for technology commercialization will help companies
measure commercial desirability and go beyond the corporate emotional feelings
tied to technology commercialization. In some instances, companies will have
ongoing and multiple technologies to target for commercialization.
To
do so, they must ask, Is it desirable to offer the technology to the world at
large at this time? What risks are the company willing to accept? Is there a
strategic fit between the technology-product it offers and the market it hopes
to reach? What are the rewards? Where lies the strategic advantage?
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Plotting out the decision-making process can be helpful. One mechanism
to support decision making is to define "categories of attractiveness" for the
technologies as well as the overall business opportunity presented by its
commercialization. The categories are tailored to the organization's goals and
objectives and to the specifics of the commercial markets. The relative
importance of each category is weighted for its relevant importance in this
process. Examples of categories of attractiveness might include: technical
risk, commercial risk, strategic fit, reward, strategic leverage and
organizational complexity.
The information gained from this type of
analysis is both objective and subjective, with overarching corporate
expectations inherent in the process and amenable to change. Companies adhering
to an analytical framework can introduce their value thinking on selected
technology commercialization opportunities and factor extraordinary
circumstances, be they favorable or adverse.
This process yields a
valuable understanding of external market dynamics and clarifies internal
company perspectives and temperament for commercialization that supports future
strategic business objectives and actions. |
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Lawrence C. Grumer is principal of Technology Associates
& Alliances, a management consulting firm focused on growing companies
through exploring emerging markets and commercilaizing technology.
Tel: 617-325-9852
 Fax: 617-325-9853
E-mail: [email protected]
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All material copyright ©1999 by the author and may not be
used for reproduction without permission of the author. |
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