Turning R&D Managers Into Technology Managers

Abstract

The globalization of industry and the accompanying trend toward making technology a commodity rather than a corporate proprietary asset have many implications for technology management. It no longer suffices that the chief technical officers of a corporation be R&D Managers. They must now become Technology Managers. The difference is both subtle and far reaching. The role of the R&D Manager is to develop for his corporation the technologies it needs to achieve its corporate objectives. Internal resources will be used for the most part. The role of the Technology Manager is far broader: he or she must see to it that the corporation has available and uses the technologies it needs from whatever source they may be procured. The R&D Manager's role is, therefore, a subset of the Technology Manager's role. Converting from one to the other requires that a much more outward-looking attitude be implanted in the corporate culture, and this is not easy. This paper describes how it was done in Exxon Chemical Company in the 1970s, and hypothesizes a general prescription others may wish to follow. Sorting Out the HodgePodge Exxon Chemical Company was formed in the mid-1960s. It's purpose was to make profitable the hodge-podge of chemical activities initiated by the various Exxon petroleum affiliates around the world. These had grown up in the 1950s during Exxon's postwar period of intensive international expansion. They were usually undertaken because they were thought to offer a way of converting some of the refinery streams into higher-valued products than ordinary petroleum products. Some were indeed very profitable investments, but many were too small or in unprotected markets or were operated with so-so effectiveness by managers who did not truly understand that chemical markets were not the same as petroleum markets. Customer requirements and response speeds are much more demanding in the chemical business. Exxon Chemical's first few years were occupied with sorting all this out. Every operation was scrutinized in a triage exercise. Those deemed capable of continued profitable operation were encouraged to improve even more. Those viewed as salvageable were saved by an infusion of capital and, almost always, new management. Those judged incurable or unaligned with Exxon Chemical's interests were either shut down or sold. This was a very tough exercise, and it was concluded successfully around 1971. A key element in accomplishing this had been to group all the operations into ten product lines headed by world-wide executives with counterparts in the five geographic regions--Europe, the Ear East, Latin America, Canada, and the U.S. The triage exercise was carried out by these ten business groups. The product lines covered a broad sweep from commodity chemicals like olefins or aromatics to specialty elastomers, petroleum additives and other high performance products. Technology needs for these far-flung operations were either met by local technical service forces or by the infusion of technology from the chemical research and engineering arms of Exxon Research and Engineering Company (ERE). Good work was often done by ERE, though developments which never found commercial application within Exxon were often targeted. Examples are new technologies for making dimethylterephthalate and cyclohexanone, intermediates for the synthetic fibers industry. Others were organic pesticides and improved processes for making detergent alcohols. None of these was ever commercialized. Some of the earlier chemical technology had been purchased from outsiders because there was no source within Exxon. Ammonia, high pressure polyethylene, vinyl chloride, PVC and acrylonitrile processes are examples. ERE had little to do with the evaluation or assimilation of any of this technology. In 1968, ERE took the significant step of setting up a set of Corporate Research Laboratories (CRL). Their mission was to conduct pioneering research in fields of science of importance to all of Exxon's activities--catalysis, surface science, materials science, and so on. …