Selling Technology to Your CEO

Abstract

Considering the many success stories we hear about American technology, it is hard to believe that U.S. industrial research is a declining function. Yet, thanks to the short-sightedness of investment analysts and chief executives trying to make too quick a turnaround, R&D is declining in terms of its perceived importance to many CEOs. It is not just the CEO but his staff as well, from the chief financial officer across to all the functional managers. We should recognize that the CFO would as soon license the technology as have R&D develop it. And the marketing manager doesn't care what R&D does so long as he gets all the money he wants for advertising. And the sales manager, if he could only source the product and put the company's label on it, would rather not be bothered with R&D or manufacturing: Just give me the product to sell and that will be fine with me. Every other function has reasons for its resources being increased, at the expense of R&D. In addition, the various corporate functions employ simple measurements like market share or productivity. If I were a manufacturing manager, I would beat the productivity number every year! It's so confusing, you can take the CEO to the cleaners without a problem. As for cycle time, all you do is source the product a little further along and you reduce cycle time. I am supposed to be an expert on R&D measurement but I can report that it is very difficult to measure, and the CEO never believes the measurements. So the R&D function is at a terrible disadvantage with its long-term programs, its high risk, and its difficulty of measuring. In addition, R&D is still considered aloof: the Taj Mahal on the hill, the country club, the people that come in late in the morning. We have always been considered resistant to change, and our people are more expensive. Also, we are endowed with that Not Invented quality that means we have to invent everything at least twice. Worst of all, we are poor team players. Is it any wonder that the CEO looks to the other functions for his short-term successes? In the old days, annual reports always had a section on technology, our chance to shine. Today, many annual reports not only don't have a section on technology, they have one on community involvement! We are losing the battle even to the human relations function. Is there hope? Definitely, assuming you are at least a member of the senior staff. Here are some guidelines for starting to turn this situation around. And I believe they apply to a CTO or engineering manager reporting to the CEO, an R&D or engineering manager reporting to a division product manager, or whatever your position is in the company. 1. Don't have unreasonable expectations. Pushing for R&D as a certain percent of sales simply won't be acceptable. 2. Get to know your market as well as the marketing people do. In GE's computed tomography (CT) business, for a decade and a half every new product developed in Milwaukee was on the basis of better specs, finer imaging, faster scanning, and better resolution. One day, hospitals decided that images had become good enough, and all of a sudden price or cost per patient became the driving function. What a difference that made in R&D programming, and how valuable it was for the engineering manager to know that as early as possible! In our gas turbine business, we were being pushed by the marketing people for better efficiency and it was improving, when all of a sudden some countries and some states announced restrictions on NO sub x emissions. Fortunately, engineering had seen that coming and was already working on getting NO sub x down. You had better be just as smart as the marketing manager about market trends that can change your programs. 3. Know the competition just as well as the sales force or the marketing people do. Understand their products and what their new introductions feature. …