Read the article titled “Leading Change in Libraries: A Case Study”. Reflect on your academic career thus far. The decision to continue your formal education was a change that you implemented in y

C reating Cultural Change in a 115-Year-O ld R&D O rg a n iza tio n O ver a five-year period, Timken R&D worked to im prove the speed and quality o f its decisions and its alignm ent with the business.

Leslie Christensen O V E R V IE W : This case study highlights the practical steps a 115-year-old company's R&D organization executed to change its culture—a change that was critical in order for the R&D group to improve both speed of decision making and alignment with its business units with regard to project selection and prioritization. The scope of the cultural changes extended beyond traditional product design and development. The case study describes the comm unication m ethods the R&D organization used to change others' perceptions of it from a corporate overhead that delivered little value to a resource necessary for the profitable growth of the enterprise.

K E Y W O R D S : Cultural change, R&D alignment, R&D strategy For almost 100 years, the Timken Company's R&D organi­ zation focused on one product category: tapered roller bearings. In 1898, Henry Timken p a te n te d a tapered roller-bearing assembly that revolutionized freight-wagon axles. A century later, over 90 percent of the company's sales continued to be generated by various embodiments of tapered roller-bearing technology. Needless to say, the Timken R&D organization was comfortable working in that space; not surprisingly, the R&D group had developed a cul­ ture based on deeply entrenched norms and assumptions— a culture th at was increasingly misaligned with the needs of the business.

In 2001, Timken decided to expand its product offerings in an effort to serve changing markets. Initially the ex­ panded product offering was achieved through acquisitions, which had minimal impact on R&D, but over time, it b e ­ came clear that innovation was required across the full breadth of the product portfolio. Traditional competitors were no longer the only competitive threat, and past ap­ proaches to innovation were no longer sufficient.

Leslie Christensen is currently th e m anager o f upstream m arketing at the Timken Company. T h ro u g h o u t her career, she has led innovations ranging from creating a new fun ction w ith in a divisio n to im p le m e n tin g new pricin g structures. Her experience spans te ch n o lo g y roa dm a pping , innovatio n p o rtfo lio m anagem ent, m arketing, m arket research, pricin g, p ro je ct m an­ ag em ent, a p plicatio n desig n, and database desig n. She hold s degrees in ap p lie d m ath e m a tics/co m p u te r science and business ad m in istratio n from Kent State University. [email protected] DOI: 10.5437/08956308X5803316Over a five-year period, guided by a desire to deliver rel­ evant technologies to the company's business units, R&D leadership set a course to improve the visibility of its efforts and facilitate meaningful portfolio m anagem ent discussions with business unit leaders. Building support for radical in ­ novation projects and increasing alignment with business units required two efforts: a process to identify and priori­ tize new ideas and a process to execute those ideas from concepts through commercial applications. The existing gate process was expanded to become the Concept to Com­ mercialization process. The concept part of the model related to upstream, long-term technology projects; commercializa­ tion was the focus of near-term new -product development.

The concept portfolio was fed by revamping the existing technology roadmapping process.

During the transition of the concept portfolio, behavioral changes in project governance and deliverables were coupled with attitudinal changes around the value and focus of front- end R&D efforts. Accepted norms regarding roadmapping were challenged, which resulted in changes in R&D m a n ­ agers' responsibilities. As a result of these efforts, the vision to deliver relevant technologies through improved visibility and meaningful discussions about the concept portfolio was achieved.

T h e N e e d f o r C h a n g e The roots of Timken's R&D culture can be traced back to the 1970s, when the R&D organization was physically separated from company headquarters, allowing it to develop its own 30 | Research-Technology M an ag em en t • May— June 2015 ! " # $ " $ % " & ' & ( & $ " " & $ ) # * * * * $ " & ' $ * +, & $ % * ' & $ " & " & & & $ $ & & - " & ! & & " $ $ $' & & $ # " $ " $ $ . " ' " & & ) / $ " " & 0 & " $ & ' $ $ $ & ' $ ) " $ & & $ $ $ 0 &0$ " $ " 1 $ " 2 ' ! " 34 25 6 $ & $ 0 " $ * * & # $ & 0 0 $ $ $ & & & / ' & " $ " 0 " $ % & - 0 0 $ ' & $ *7 08 * $ 0 $ $ % & ' 0 $ % " " & $ $ / 2 & & & $ " " $ ' " & ! " $ " " $ % & $ & & & " # $ & $ " 0 0 $ 9 $ 9 ! $ & $ $ $ $ & & $ $ $ % ' " $ & & ! ' $ % " $ & $ $ $ " & & $ / $ - 0 ! $ % -$ & $ ' # 22 $ ' $ - ! $ % $ 9 ' $ 9 ! $ & 0 ! ' $ % $ : ' & " 0 $ $ % : *; & $ & " ' $ & $ " $ ' $ " <* & & ' " $ & $ " $ & $ $ T R E N D -A TREND- B TREND-C vw w v TECHNOLOGYTHEME - A WTECHNOLOG 5YTHEME - B vAv ^ Mi>y TECHNOLOGYTHEME-C 2010 2011 2012 FIG U R E 1. S a m p le te c h n o lo g y ro a d m a p fro m 2 0 0 92 0 1 3 2 0 1 4 Creatin g Cultural Change in a 115-Year-Old R&D Organization May— June 2015 | 31 ! " # $ % ! " & !

F r a m e w o r k f o r C h a n g e The journey toward cultural change at Timken can be under­ stood through the lens of Kotter's (1996) eight steps of orga­ nizational change:

1. Establish a sense of urgency. This requires making clear that the current state is so unacceptable that change is worth the risk.

2. Create a guiding coalition. Recruit a core team of advocates to support and guide the change journey.

3. Develop a vision and strategy. The guiding coalition devel­ ops a vision and strategy around a goal common to all in the organization.

4. Communicate the change vision. The vision and goal must be shared throughout the organization in order to build support for change and for the change strategy.

5. Empower broad-based action. Leaders empower a broader base of people to execute the strategy, removing obsta­ cles, such as existing policies, that impede change.

6. Generate short-term wins. Tangible short-term results build support for the vision and bring more parts of the orga­ nization on board.

7. Consolidate gains and produce more change. With a few short-term wins, support strengthens, enabling addi­ tional change.

8. Anchor new approaches in the culture. In this final, critical step, the changes become part of the organization's new normal. Activities that had been new to the organization become integrated into its regular processes and no lo n ­ ger require the oversight of the guiding coalition.

Over a period of 15 years, Rotter studied dozens of organi­ zations' attempts at major change. He found that culture and culture change had a m ajor impact on the success of a change effort. Contrary to the accepted wisdom that organi­ zational change should begin with culture change, Kotter found that successful efforts ended with a new culture shaped by the change.

While the Timken leadership did not intentionally refer­ ence Kotter at the start of the transformation, one team m em ber had undergone formal training in the approach, which influenced the execution.

Establish a Sense of Urgency "Establishing a sense of urgency is crucial to gaining needed cooperation." (Kotter 1996, p. 36)The R&D leadership at Timken established the need for change through a comprehensive analysis of the concept portfolio, performed by associates who had no prior attach­ m ent to the projects or process. Unfamiliarity with R&D and its jargon posed some initial challenges, but the exercise con­ firmed what some suspected—the concept portfolio lacked sufficient rigor and clear decision-making processes. More substantial were the findings related to the portfolio's perfor­ mance: more than 50 percent of the open projects were in their later stages. A simple plot of the value of the concept portfolio's projects against their anticipated year of comple­ tion revealed that R&D's value to the business was projected to decline significantly in the near future (Figure 2).

The realization th at the fuzzy front end of the Concept- to-Commercialization process was short on fundamental re­ search ideas to su p p o rt c o rp o ra te objectives for organic growth awoke R&D leadership to th e d a n g e r th a t th e com pany would suffer from w hat Tushman and O'Reilly (2002) call the "tyranny of success"—the inability to balance innovation with organizational effectiveness. This fear e n ­ gendered a sense of urgency to drive significant changes.

Substantial new technology initiatives that led to longer- term yields were needed, and more important, the businesses needed to have a clear understanding of the value of these higher-risk, higher-reward efforts. In an effort to gain sup­ port for change, R&D leadership shared their realization and concerns with executive leadership, who gave the R&D lead­ ership team a directive to reverse the situation.

Create a Guiding Coalition "A strong guiding coalition is always needed—one with the right composition, level of trust, and shared objective." (Kotter 1996, p. 52) With the need for change firmly established, a dedicated R&D process team was created to enhance the innovation process, manage the concept portfolio, and work with subject m atte r experts to update the technology roadmaps and the roadm ap creation process. The R&D process team quickly recognized th a t new portfolio perform ance track­ ing metrics were also needed to indicate and communicate success.

At the time the R&D process team was formed, R&D's scope included product development; as a result, the team 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 FIG U R E 2 . P ro je c te d v a lu a tio n o f R&D c o n c e p t p r o je c t p o r tf o lio , 2012-2015 3 2 | Research-Technology M anagem entCreatin g Cultural Change in a 1 15-Year-Old R&D Organization ! " # ! " # !# # ! ! " $ ! %& " ! " # ' " # # # ( ( # ) " # * " # " + , - . # # # # # # ! ! Develop a Vision and Strategy "Vision refers to a picture of the future with some im­ plicit or explicit commentary on why people should strive to create that change." (Kotter 1996, p. 68) Developing the vision and strategy to drive change required stepping back to analyze where and how R&D could best support the needs of the enterprise. An outside consultant was enlisted to guide R&D leadership in developing and ar­ ticulating its change strategy. Because the enterprise had grown through acquisitions, the vision encompassed both the legacy core products and the broader scope of new products.

The strategy defined a num ber of innovation domains, such as "support core business" and "develop new technolo­ gies." By echoing the goals of the business units, these inno­ vation domains demonstrated an authentic common interest with the business units and established a tone of partnership.

Cross-referencing active concept projects to the innovation domains demonstrated that the business units' perception of an R&D focus on "misaligned science projects" was u n sup­ ported, further reinforcing the cooperative tone.

The growth strategy was developed in two forms: a de­ tailed seven-page brief for executives and a condensed Pow­ erPoint presentation for R&D associates. The brief noted, "The aim of any strategy is to build a commitment to a pat­ tern of behavior that will allow an organization to compete effectively and win in the marketplace." The core value ofD e v e l o p i n g t h e v i s i o n a n d s t r a t e g y t o d r i v e c h a n g e r e q u i r e d s t e p p i n g b a c k t o a n a l y z e w h e r e a n d h o w R & D c o u l d b e s t s u p p o r t t h e n e e d s o f t h e e n t e r p r i s e .

innovation remained, but the breadth of innovation efforts was expanded to encompass power transmission products, replacing the earlier, narrower focus on bearings. Two efforts were highlighted—the Concept to Commercialization pro­ cess for idea execution and the technology roadmapping pro­ cess for idea generation. Furthermore, the strategy endorsed open innovation, which was a departure from past attitudes about fundamental research. The goal to have R&D better aligned with business unit strategies was considered critical to the objective of delivering relevant technologies to busi­ ness units.

Communicate the Change Vision "That shared sense of a desirable future can help moti­ vate and coordinate the kinds of actions that create transformations." (Kotter 1996, p. 68) Communicating the R&D strategy and vision required effort from many individuals, using various delivery methods and cadences. The CTO made a public commitment to embrace this new Concept to Commercialization culture and set ex­ pectations at a quarterly meeting at which the new strategy was introduced to all of the company's R&D associates. The introduction concluded with the CTO responding to ques­ tions from associates.

Throughout the next two years, the new R&D strategy was presented to wider audiences, including the company's executive leadership, which had given the R&D team the scope to make the needed changes but not been involved in the conceptualization and execution of the change process.

In some instances, R&D leaders drew on their past non- R&D experience and used informal networking to com­ m unicate th e strategy. Metrics related to business un it alignment and the concept portfolio's performance were introduced and shared to emphasize R&D's comm itm ent to the vision.

At the tactical level, socializing the R&D vision required more personal approaches. R&D project leaders and lower- level managers were required to attend training in the new expectations regarding project charters and gate deliverables.

During the sessions, which were led by an R&D process team member in conjunction with a business unit manager, par­ ticipants revised their project charters to minimize technical jargon and focus on business deliverables. For example, one project's initial charter read, "Identify the impact element abc has on material xyz's micro structure." The revised charter read, "Reduce late deliveries of raw material xyz for product Creatin g Cultural Change in a 1 15-Year-Old R&D O rganization May— June 2015 | 3 3 by determining if eliminating element abc will reduce the need for reprocessing while maintaining current product performance." These initial meetings were early examples of R&D project leaders partnering with business unit managers to support a shared vision.

The vision was also shared and consolidated through a significant rethinking of the technology roadmapping pro­ cess and expectations for the roadmaps themselves. The R&D process team m em ber charged with the roadmapping process collected and summarized the decentralized prod­ uct and m arket plans provided by over a dozen business unit managers. Afterward, face-to-face meetings were held with these managers to document their visions, including those that had no t yet been fully analyzed. R&D personnel shared nascent technology ideas with the managers to e n ­ courage discussion of their perceived, but as yet undevel­ oped, business needs. Cialdini's (2001) concept of social proof was used to persuade business managers to focus on long-range plans by sharing intermediate or partially devel­ oped plans from one business unit manager with other managers to spur ideas. The results were maps of potential future products that extended beyond the short-term hori­ zon. The first two iterations of this process were led by the R&D process team; the final iteration was managed by the business unit managers. In this last step, R&D and business units joined to discuss long-term product and technology needs rather than near-horizon solutions, marking a signifi­ cant departure from past practices.

Em power Broad-Based Action "The purpose of stage 5 is to empower a broad base of people to take action by removing as many barriers to the implementation of the change vision as possible at this point in the process." (Kotter 1996, p. 102) After the vision was communicated, some R&D associates voiced concerns about the feasibility of its execution. Issues were raised regarding current project management practices, the complexity of existing roadmaps, budget priorities, and the challenge of explaining fundamental research to those with no subject m atter expertise. Culturally, many in R&D believed that projects in the long-term concept portfolio were so different from short-term commercialization projects that best practices from the commercialization portfolio could not transfer to the concept portfolio.

T h e v i s i o n w a s a l s o s h a r e d a n d c o n s o l i d a t e d t h r o u g h a s i g n i f i c a n t r e t h i n k i n g o f t h e t e c h n o l o g y r o a d m a p p i n g p r o c e s s a n d e x p e c t a t i o n s f o r t h e r o a d m a p s t h e m s e l v e s .The R&D process team responded by flexing processes im ported from the commercialization process to accom ­ m odate the different needs of concept projects. For in ­ stance, during the project lead training, it became apparent th a t the existing work breakdow n structure (WBS) te m ­ plate did no t fit most R&D concept projects. In response, a limited num ber of WBS tem plate variants were developed to allow project leaders to relate better to the stage-and- gate process. The tailored WBS approach was designed to be more relevant to actual concept project progressions. In addition, the one-page WBS facilitated a common u n d e r­ standing of a project's scope, status, and progress toward deliverables. Finally, allowing concept project leads to have some influence over the com m unication of progress helped instill a sense of ownership in and com m itm ent to th e new process.

Perhaps the most significant change to the existing R&D stage-and-gate process was the decision to introduce non- R&D gatekeepers to the concept portfolio's governance pro­ cedures. Many R&D project leads were concerned that non-R&D managers would kill projects they did not under­ stand. This concern was magnified by the belief that having an R&D project killed would have a negative impact on indi­ vidual performance appraisals. To overcome these obstacles, two actions were taken. First, a decision was made to restrict gatekeepers at the filter stage—the initial go/no-go decision gate—to R&D management (Figure 3). Second, in prepara­ tion for the transition, a series of reviews was established so that each project in the portfolio could be discussed with the new non-R&D gatekeepers. Over time, gate meetings began to focus on each project's strategic fit and anticipated value rather than technical details.

Around the same time that non-R&D gatekeepers were introduced, the executive team removed a significant hurdle for breakthrough ideas by creating a corporately funded bu d ­ get to finance high-risk ideas. The separate budget afforded R&D leadership the discretion to investigate potentially dis­ ruptive technologies while maintaining a balance with shorter-term business unit priorities.

New tasks related to technology roadmaps were executed as a separate work stream from the stage-and-gate process.

The deliverables and the new method by which they were produced challenged m any existing norms. First, R&D chal­ lenged business units to prioritize their needs rather than speculate on potential technical solutions. Ultimately multi­ ple product maps from business unit managers were recon­ ciled and reduced to a single, mutually accepted chart capturing all "critical to customer" needs (Figure 4).

The second significant d e p a rtu re from past practices was th a t R&D platform leaders were assigned and r e ­ quired to formally pitch th e ir recom m ended platform strategies. At the time, Timken had seven technoiogy platform s, aro u n d w hich projects w ere grouped and organized. As a result of th e changes to the roadm apping process, th e role of the platform m anager shifted from m anipulating a dozen or m ore s h o rt-te rm roadm aps to recom m ending a strategy to achieve the prioritized 3 4 | Research-Technology M anagem entCreatin g Cultural Change in a 115-Year-Old R&D Organization pjpF co I 0 I ‘ CTO g - | ‘ Technology © 1 Q) 00 0Proof of Concept •CTO ♦Technology •Marketing •Manufacturing •Engineering •QualityConcept Confirmation •CTO •Technology •Marketing •Manufacturing •Engineering •Quality FIGURE 3. C o n c e p t e v a lu a tio n ph ase o f C o n c e p t t o C o m m e rc ia liz a tio n pro cess needs of th e business units. All platform leaders used the same polar c h a rt tem plate to p rese n t th e ir strategies (Figure 5); h o w e v e r, each was given fre e d o m to s u b ­ categorize his platform for b e tte r organization. This free­ dom allow ed each platform o w ner to explicitly capture his subject m a tte r expertise w hile simplifying project classification. Platform proposal presen tatio n s w ere c o n ­ ducted in off-site m eetings to sh arpen focus and m in i­ mize distractions.willingness to publicly change its tactical course after input from business unit managers demonstrated its commitment to a fruitful partnership. This gesture was repaid in kind w h e n an existing m odeling project was presented to the expanded set of gatekeepers (including non-R&D g a te ­ keepers). The non-R&D gate­ keepers not only agreed with R&D's valuation of the proj­ ect, but they also insisted that the project receive a higher priority to accelerate its value to the enterprise.

While it may seem coun­ terintuitive, killing projects was considered a "short-term win" in the journey towards delivering relevant technolo­ gies to the business units. The early gate decisions made u n ­ der expanded governance helped to change past beliefs that R&D was isolated from other functions, building business unit confidence in the change.

Consolidate Gains and Produce More Change "Whenever you let up before the job is done, critical momentum can be lost and regression may follow." (Kotter 1996, p. 133)•CTO •Technology •Marketing •Manufacturing •Engineering •Quality Generate Short-Term Wins "Most of the rest of us expect to see convincing evidence that all the effort is paying off." (Kotter 1996, p. 119) Early on in the change process, a few active concept projects were publicly killed in gate meetings. One, an R&D-initiated project, had excellent projected value but failed the technical proof-of-concept stage. Two others, also R&D-initiated, had acceptable proof-of-concept results b u t w ere n o t viewed as an appropriate strategic fit by the business units. R&D's Attrib ute 4 A ttribute 6 A ttribute 7 Attribute 2 □ Product A B Product B 0 Product C ■ Product D FIGURE 4. P rio ritiz e d " c r itic a l t o c u s to m e r " a ttrib u te s , a g g r e g a te d across b u sin ess un itsAfter the majority of the R&D process changes had been im ­ plemented, they were shared across the enterprise to help invigorate the new processes. The platform polar charts be­ gan to be referenced regularly during quarterly R&D plat­ form reviews—breaking the old paradigm of roadmaps only being referenced once a year. The polar charts, coupled with indications of how a project supported a business unit's stra­ tegic direction, became mandatory in platform reviews and gate meetings.

Once the changes to R&D strategy, the institution of the Concept-to-Commercialization process, and the streamlining of the technology roadmapping system were stable, a binder was created to document the process and its deliverables. At first, a limited num ber of binders were shared by R&D lead­ ership with executive leadership; ultimately, the positive feedback from executive leadership led to other function leaders outside R&D requesting documentation of the pro­ cess and its results.

Anchor N ew Approaches in the Culture "Culture change is not something you manipulate eas­ ily." (Kotter 1996, p. 156) An important step in the improved R&D process came when the new system was communicated externally. In a press Creatin g Cultural Change in a 1 15-Year-Old R&D O rganization May— June 2015 | 3 5 !" ! # ! !! $ % &' ! ( ) * + ! , + $ ! % ! ! + ! - , , !! . # / !" 01 ! # !! $ . # 2 + 3( % ! ! - 1 T h e B e n e fits o f C h a n g e Ultimately, culture is a mix of beliefs and the behaviors driven by those beliefs. Overall, th e w ork described in this paper has produced a notable change in both b e h a v ­ iors and beliefs driving th e in n o v atio n process at Timken (Table 1).

T h r o u g h o u t t h e p r o c e s s , m o d i f i e d b e h a v i o r s l e d t o c h a n g e d a t t i t u d e s a n d b e l i e f s .To capture the culture change more clearly, the R&D lead­ ership team surveyed associates and business units in 2013.

The Corporate Executive Board's (2013) Anatomy of a World Class R&D Organization instrument was used for this pur­ pose. The survey asked 90 R&D associates and 60 business unit associates to respond to a series of statements about the R&D organization's culture and performance. The statement "We (R&D) stress-test our business' growth assumptions at multiple stages of strategy development to validate long­ term goals" was used to measure perceptions of both the importance and achievement of strategic alignment. On a five-point scale, the differences betw een R&D and business unit responses were 0.2 and -0.1 for importance and per­ formance respectively. These results demonstrate that R&D and the business units were in agreement regarding strate­ gic alignment to validate long-term goals. The old percep­ tion that R&D was not aligned with the businesses had clearly changed.

Throughout the process, modified behaviors led to changed attitudes and beliefs. Creating transparency in the concept portfolio was an initial step towards b etter col­ laboration with the business units. Replacing complex, short-term -focused roadmaps with a single prioritized list of needs gave R&D managers the opportunity to explain the relevance of longer-range ideas. R&D planning is now more 3 6 | Research-Technology M anagem entCreatin g Cultural Change in a 115-Year-Old R&D Organization B e h a vio rs O n l y R & D d i r e c t o r s w e r e i n c l u d e d in p r o j e c t r e v i e w s .

B u s i n e s s u n i t s a r e i n c l u d e d in g a t e d e c i s i o n s .

M u l t i p l e R & D a n d b u s i n e s s u n i t r o a d m a p s w e r e o f t e n i g n o r e d a f t e r p l a n n i n g s e a s o n .T e c h n o l o g y p l a t f o r m s t r a t e g i e s a r e r e f e r e n c e d o n a r e g u l a r b a s is .

R & D a g e n d a d e t e r m i n e d b y m u l t i p l e , l e n g t h y li s t s o f b u s i n e s s u n i t r e q u e s t s .A g e n d a is g u i d e d b y p r i o r i t i z e d l i s t o f " c r i t i c a l t o c u s t o m e r " b u s i n e s s n e e d s .

R & D w a s r e l u c t a n t t o p i t c h l o n g e r - t e r m o r h i g h - r i s k / r e w a r d i d e a s .

P l a t f o r m s t r a t e g y b u y - i n a l l o w s R & D t o b u i l d v i s i o n w i t h b o t h i n t e r m e d i a t e a n d l o n g - t e r m d e l i v e r a b l e s .

Be lie fs R & D p r o j e c t s c a n n o t h a v e c o m m e r c i a l l y r e l e v a n t d e l i v e r a b l e s a t o u t s e t .R & D p r o j e c t c h a r t e r s u s e b u s i n e s s t e r m s a n d h a v e s t a t e d f i n a l d e l i v e r a b l e s .

R & D s h o u l d p r o p o s e a n d j u s t i f y p r o j e c t s .

B u s i n e s s u n i t s a s s is t w i t h b u s i n e s s j u s t i f i c a t i o n f o r p r o j e c t s .

R & D t a k e s a l o n g t i m e .

A g i l e p r o j e c t s w i t h f o r e c a s t e d d e c i s i o n m i l e s t o n e s a n d f r e q u e n t s t a t u s u p d a t e s s p e e d d e v e l o p m e n t .

Y o u c a n n o t m e a s u r e R & D .

M o n t h l y R & D s c o r e c a r d is p r o v i d e d t o e x e c u t i v e l e a d e r s h i p .

A s s o c i a t i o n w i t h k i l l e d p r o j e c t s w i l l a f f e c t p e r f o r m a n c e r e v i e w s .

E m p h a s i s is o n l e a r n i n g f a s t o v e r e n s u r i n g s u c c e s s .

R & D is n o t a l i g n e d w i t h b u s i n e s s u n i t s .

B u s in e s s u n i t n e e d s f e e d i n t o t e c h n o l o g y p l a t f o r m s t r a t e g i e s .

streamlined, integrating business-unit needs with R&D ca­ pabilities. Gaining consensus on an enterprisewide R&D business plan is now achieved with far fewer iterations be­ cause the starting point is derived from the business units' collective high-level priorities.

In 2011, R&D was expected to reconcile five separate business plans, which included 14 sub-plans, totaling more th an 30 separate lists of business manager-suggested techni­ cal solutions. If an R&D m anager aligned his priorities to a single plan, he was perceived by the other businesses as mis­ aligned. As a result, R&D business planning typically required num erous iterations to gain enterprisewide consensus. By contrast, the most recent planning cycle began with a list of existing long-range technology strategies, built from the rec­ onciled, prioritized list of technology needs. The list of tactics associated with each platform polar chart was shared with the business units. Subsequently, each business unit leader reviewed the list; the reviews produced minimal changes.

R&D's increase in external communications has chal­ lenged past perceptions that all concept portfolio ideas need to originate from R&D, as well as the notion that these con­ cepts would be too technical to state in business terms. Al­ lowing variants of project management deliverables helped change these perceptions by m aking concept projects 2010 2011 2012 2013 F IG U R E 6 . C o n c e p t p o r t f o l i o d e c i s i o n s , 2 0 1 0 - 2 0 1 3measurable. Concept portfolio metrics, in turn, fed discus­ sions about the resources and priorities that affect speed of delivery. Improved governance resulted in a new norm, dic­ tating that decisions should be formally recorded and acted upon. Lone dissensions are acknowledged, but are no lon­ ger sufficient to continue work on ideas that are not com­ mercially viable or to kill ideas that have strong value propositions. As a result, the num ber of project decisions has increased markedly (Figure 6), as has the num ber of projects completed (Figure 7).

Business units are now involved early in the concept pro­ cess. Once a project is past the filter stage, it cannot pass the feasibility stage without a business unit identifying a sponsor from its own ranks. When projects are killed—rather than simply being put on hold, as was common practice in the past—there are no negative repercussions for the idea's origi­ nator or owner. Managers of killed projects are quickly moved to new assignments, so that killed projects do not af­ fect career progression. Business sponsors are expected to as­ sist with refining the project charter and value proposition.

The implementation of new collaboration mechanisms betw een R&D and business units on a working level has also improved the speed of project completion. Scope creep is avoided because the charter and WBS clarify the final 2010 2011 2012 2013 □ Killed ■ Finished F IG U R E 7 . C o n c e p t p o r t f o l i o p r o j e c t c o m p l e t i o n s , 2 0 1 0 - 2 0 1 3 C r e a t i n g C u l t u r a l C h a n g e in a 1 1 5 - Y e a r - O ld R & D O r g a n i z a t i o n M a y — J u n e 2 0 1 5 | 3 7 !"# $ %& ' ( !"# ) * L e s s o n s L e a r n e d At Timken, change was not w ithout its bumps. The lessons the Timken R&D organization learned along its journey can be sorted into four buckets.

1. Stay the course. Cultural change is iterative, not linear.

Some major work may end up being temporary. For ex­ ample, the R&D process committee spent a full year im­ plementing a software system to manage the concept project portfolio that was ultimately abandoned. While it was a mistake to rely too m uch on software—an error that, as Cooper (2008) notes, is not uncom m on—the ex­ ercise did have value, as unresolved issues were forced to the surface. These issues included developing a common language with business units, clarifying performance metrics, establishing baselines for performance expecta­ tions, and defining roles and responsibilities within the process more clearly.

2. Dedicate resources. One of th e reasons Timken was able to stay th e course was because a small team was dedi­ cated to im plem enting change. Core m em bers of this team had little or no te n u re w ith the R&D organiza­ tion, w hich helped th em to be objective. Since daily business needs w ould often take priority, R&D led the changes to b o th th e gate process and roadm apping.

The centralized R&D organization shared its work d u r­ ing all stages w ith the decentralized business unit m anagers. Some m em bers of the dedicated R&D p ro ­ cess team had m arketing backgrounds, w hich helped facilitate interactions and translation betw een R&D and the business units.

3. Transparency is critical. As Isaken and colleagues (2001) point out, both the external environm ent and internal operations have an impact on the climate within an or­ ganization. At Timken, external interactions, such as those w ith the non-R&D gatekeepers, were critical to the culture change. The development of a consolidated prioritized needs chart required external interactions.

Actions such as sharing project charters and providing regular updates on process changes fostered a change in attitudes about the R&D organization. Inviting non-R&D representatives into the gate process required extra work, but this effort was ultimately rewarded with meaningful discussions that allowed R&D's priorities to be m ore closely aligned with business needs.4. Little things matter. The success of strategic initiatives such as creating positive culture change often depends on the execution of the details. For example, R&D project leads historically had renam ed projects as new findings clari­ fied their scope and direction. This practice resulted in the perception that projects were either never finished or were rescoped so they could be relaunched w ithout busi­ ness unit buy-in. A change as simple as locking in a proj­ ect name helped reverse these negative perceptions.

C o n c l u s i o n s Over the course of five years, a regular cadence of new be­ haviors changed cultural norms at Timken. These new be­ haviors continued even after a major corporate restructuring that put new players in key roles. The changes are now in ­ grained in the culture. Although the experience of Timken is inevitably unique to its particular context, the constructs and approaches that drove its process are generally applicable to other organizations and cultural visions.

While Timken R&D stayed the course, it is important to stress that the transformation did not begin with a detailed project plan and was not considered a project. Rather, R&D leadership had an overarching vision and a series of short­ term next steps. As short-term changes proved successful, the R&D process team suggested next steps toward the vision.

The Timken R&D organization's case is proof that an es­ tablished company can change its R&D culture. Further­ more, R&D can lead process transformation that extends beyond product design and development. The biggest pay­ off is that the R&D organization has changed other units' perception of it; once seen by many as a corporate overhead delivering little value, R&D is now understood as a critical resource for the profitable growth of the enterprise.

R e f e r e n c e s CEB Research & Development Leadership Council (CEB).

2013. Anatomy of a World-Class R&D Organization. CEB Research & Technology Executive Council. http://www.

executiveboard.com/exbd/corporate-benchmarking/research- and-development/index.page Cialdini, R. B. 2001. Harnessing the science of persuasion.

Harvard Business Review 79(9): 72-79.

Cooper, R. G. 2008. The Stage-Gate idea-to-Iaunch process— Update, what's new and nextgen systems. Journal of Produc­ tion Innovation Management 25(3): 213-2 32.

Isaken, S. G., Lauer, I<. J., Ekvall, G., and Britz, A. 2001.

Perceptions of the best and worst climates for creativity:

Preliminary validation evidence for the Situational Outlook Questionnaire.

Creativity Research Journal 13(2): 171-184.

Hotter, J. P. 1996. Leading Change. Boston, MA: Harvard Busi­ ness School Press.

Timken Company. 2014. Timken announces major investment to accelerate product development and line expansion.

Press release, June 11. http://news.timken.com/index.php?s= 12504&item=136859 Tushman, M., and O'Reilly III, C. A. 2002. Winning Through In­ novation: A Practical Guide to Leading Organizational Change and Renewal. Boston, MA: Harvard Business School Press.

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