New Organizational Forms

We have a name for many of our efforts at the World Class R&D Institute: organizational form. For the last four years World Class R&D has been documenting in great detail a new organizational form for industries reliant on productivity in R&D for their competitive advantage. Indeed, we set up an infrastructure (Corporate / Financier) that engenders many stand-alone organizational forms (i.e., the Investible Units+). This is a deliberate activity. Pre-game+ defines the initial organizational form for the Investible Unit; Mid-game+ refines and matures the form. Perhaps we didn’t have the academic name, but it’s clear we have a solution much more robust than is often found in the academic literature.

Exhibit 1: Organizational Form drives much of the success in exploitation of a new science platform. Having an exciting new science platform and money is not enough. Get the organizational form wrong and the consequences are reflected in unproductive activities by almost everyone in the firm: labeled here as the Sick Building syndrome.
There are three major components to any R&D organizational form: how research is conducted, how research is funded, and how research faces off to the marketplace. And, organizational form gets reflected in the prejudices and attitudes it instills in its people. This is institutionalization of the actions, procedures, approaches, and ‘culture’ that you sense when you walk into any of our Investible Units. We take new and unformatted tasks that lie ahead and give them a recognizable form and function.

We seek to improve the productivity of evidence gathering in R&D. This is where the bulk of our time, effort and resources should be spent (and why Willie robbed banks). But we can’t change evidence gathering if we can’t change decision making. Use Alternate Competing Hypotheses+ (ACH) as a new approach to evidence gathering and you need time to explore the alternates. The first instance of deadline bias+ in our decision making threatens the entire approach. But if the firm makes its financial decisions using ‘Monte Carlo risk-adjusted portfolio analysis’ (i.e., IIR+ fancified), the manager is forced to pick an arbitrary deadline – he or she needs the t=time to feed into the fancy financial equations (see new money). In this and many other ways, the choices we make in organizational form often trickle down to the next laboratory experiment.

Here’s a sketch of the organizational form as seen in World Class R&D:

  • Form of research – We deliberately focus on ‘effectiveness’ in research, that is, which research helps, and which hinders in our pursuit of blockbuster+ products. We view the research ‘transaction’ as the sale of an intangible good (i.e., research findings for funding), and therefore subject to many forms of market manipulation and failure. We believe a scientific competitive advantage translates into commercial success.
  • Form of financing – We practice ‘new money’ – viewing money as a tool to build effectiveness in research under conditions of discontinuous discovery+ (e.g., 30-70). We eliminate (greatly discount) the variable of t=time in our financial equations.
  • Form of commercialization+ – We finance discontinuous discovery of blockbusters with continuous commercialization of sub-blockbusters. We view the blockbuster outcome as fluid, unconstrained by any predetermined form, function or purchaser.

World Class R&D builds an infrastructure to continually search for new forms of conducting research, financing and commercialization (e.g., new management tools and techniques). We view these to be equally important contributors to success in our science-centric pursuits. World Class R&D places the Funding Agent+ (or Big Corp.) in the position of doing this over and over. We institutionalize the design and selection of new organizational forms.1

We inaugurated this Institute with the parable of the Sick Building: a firm replaces all the people in an unproductive facility hoping for better results and within a year ends up with the same prejudices, attitudes, work practices and lack of productivity seen with the old people. Now we better understand how organizational form determines the attitudes and work practices of these individuals. “Old Money” does not allow “new men” to emerge. Corporate reorganizations, reshufflings, slicing-big-into-small, etc. do nothing to cure the sick building. Building new organizational forms constructs new buildings in which we can then safely place our new men and money (speaking figuratively).

Editor's Picks for January, 2011

  • 1. This continual reinvention+ of organizational forms is not left to chance or to the limited past experience of team members. Intended behaviors inform the design and development of new organizational forms. Templates of pre-defined organizational forms (and supporting tool-sets) are available for consideration and analysis by management from all our Investible Units.
Further Reading