Corporate-Supported Research in a Reengineered Technology Organization

Abstract

A long-range research program complements the shorter-range technology activities that Chevron 's business units fund. OVERVIEW: As pressure to improve short-term financial performance has increased, longer-range research programs, particularly those at a corporate level, have fallen victim to cost-cutting initiatives. This development jeopardizes the technology base that sustains the corporation's businesses in both the short and long term. By designing a corporate longrange research program that is explicitly aligned with corporate business drivers, and the strategy of which is guided by management representatives from the major businesses, a credible and sustainable long-range research program can be developed. A key to success is an emphasis on transferring results of the longer-range program to specific business units as those results mature, and a metric to keep track of this transfer. The metric provides visible evidence of the relevance of the program to the business units of the corporation. In 1990, Chevron carried out a major reorganization and reorientation of the technology functions that support its downstream business. As has been the case with many other companies, this restructuring was part of a corporate-wide effort to reduce costs and improve the efficiency of business operations. The resulting technology organization, Chevron Research and Technology Company (CRTC), was closely aligned with the most important and immediate needs of Chevron's business units. As a part of this reorganization, CRTC evaluated the role and orientation of our corporate-supported research efforts. The result was a reinvigorated corporatesupported Long-Range Research Program that complements the more immediate focus of the technology activities that Chevron's business units fund in support of their individual businesses. The program ensures the health of the corporation's technologies which serve as a platform for the creation of competitive and distinguishing products and processes by a broad range of the company's businesses. In addition, it fosters the development of enabling technologies, often through collaborations with other technology providers, universities and national laboratories. Long-range research refers to research activities that are beyond the time frame or scope of the business plans of Chevron's individual operating companies. Typically, such research provides a foundation of technology from which several individual operating companies can develop specific competitive technologies and applications that can distinguish them from competitors, or it provides enabling technologies that can benefit a range of operating companies. There is no fixed time horizon for this research. The time horizon depends upon the nature and role of the technology and the nature of the particular business that would ultimately build on the results of long-range research to construct a technological position related to its business. Because the research is closely aligned with overall business strategy, individual operating companies often adopt results from the Long-Range Research Program in a relatively short term, even while the research program pursues ultimate goals that are longer term or of much higher risk. Key to Success Six factors have been key to the success of this longrange research program: Integration of the research work into the same organization that carries out shorter-term development and technical service work for the business units while providing for centralized management and accountability for the program as a whole. Strategic guidance by an advisory group composed of representatives from both CRTC and the management of Chevron's major operating companies. Recognition of a clear set of criteria that sets the longrange research activity apart from the shorter-term technology efforts funded directly by the business units. …