Technology Delivery Challenges at W. R. Grace

Abstract

A simple matrix helps classify ideas according to the clarity of their market appeal and the firm's ability to make them work at a reasonable cost. OVERVIEW: Grace s product development process is a stage-gate process preceded by idea generation. Its overall effectiveness is thus dependent on how ideas are nurtured or screened. A framework is used to decide what to do with ideas, based on their market utility and the ability to make the idea work. This framework is then employed to describe an integrated innovation process for dealing effectively with ideas, concepts and projects at various stages of their maturation. WR. Grace has gone through several metamorphoses in its 140-year corporate history, remaking itself from a trading and shipping company to a chemicals and plastics concern, and then growing into a large conglomerate of semi-autonomous and relatively unrelated businesses through an active and prolific acquisition program. Over the past few years, Grace has transformed itself once again, this time to a more focused specialty chemicals company. The new Grace has plenty of growth opportunities, particularly through introduction of new products and expansion into new countries. Therefore, an effective technology and new product delivery process is paramount to its continued success. Grace's current product development process (PDP) is illustrated in Figure 1. PDP has evolved out of the company's recognition in the late 1980s that product development was not just an RD feasible plans would be developed into working prototypes, and so on. In this framework, application of resources to ideas would help the transition into the next stage of maturity (i.e., plans, prototypes, etc.). As ideas progress they require significantly higher levels of resources for their continued development. Therefore, the probability of overall success has to increase commensurate with the project cost in order to keep the exposure risk manageable. Consequently, decisions to deploy resources for the next phase of the project should take risk and reward considerations into account. Multifunctional project teams perform the activities in the various stages. A multifunctional management team makes the decisions at various gates. The last step in this process is a wrap up review to confirm that a viable business has indeed been created, and to get agreement on the plans to support the product for the rest of its life. This review is also a logical point to debrief the development team on lessons learned and ideas for follow-up products or programs. Successful development of new or improved products is clearly an important and measurable output of the technology function. PDP is a powerful tool for managing the product development process and has already proved beneficial. It is particularly powerful in ensuring that product development projects create value. Creating Value First and foremost, PDP ensures that the project has the potential to create perceived value for Grace's customers. In other words, ensure that the resulting product will delight the customers by delivering meaningful and real benefits at an affordable price; i.e., a price/benefits ratio that customers consider to be a value. To accomplish this, the project team and the gate keepers must have a clear understanding of customer needs, the benefits that are highly valued by target customers, as well as a clear understanding of competitive offerings. Second, PDP ensures that the project creates value for its sponsoring business unit. In other words, it will deliver sufficient profits by creating a cost position that will allow the company to meet its profitability targets while providing its customers with a good deal. …