Strategic management of technology, the logic of knowledge logistics

Abstract

In development organizations there is a strong interest for technology management. There seems to be a gap of understanding between managers and engineers. The managers often lack strategic leadership with the scope that engineers need for their development decisions, the engineers are often blamed for showing little interest in the business-value of what they are working on. In fact there are two issues involved here: culture and dynamics. Managers and engineers often lack a common language and understanding and they work with different time horizons. Their focus is different too. For the last decade managers have shown a strong interest in shareholders value. This is enhanced by stock-options, the shareholders perspective so coincides with their own interest. For the last decade the most effective way to increase stock-value was to grow through opening new markets. Lifting trade barriers (Eastern Europe, USSR, China) together with a significant reduction in transportation and communication cost, made it easy to do so. If new market knowledge or new technology was needed, the easy way was to buy that through mergers and acquisitions. These effects have reduced management interest in long term research. The focus of engineers is on systems and technology that will certainly have an impact on business yet to come, but not in the next quarter and most likely not even within the next year. The engineer's perception of risk is not that of financial risk, but of technology failing to meet the requirements. Research engineers can even turn a project failure into a research success if the project delivered substantial knowledge on the causes of technological failure. However, no business can be expected from these failures, unless the newly gained understanding offers new opportunities. It is obvious that this mutual misunderstanding between long- and short-term priorities can have disastrous side effects for both parties. Both will lack a mutual understanding of the long- and short-term needs of the business as a whole. Overcoming these cultural problems requires a common language. Although humans have the capacity of understanding without language, it is not very likely that this capacity will help engineers and managers to explain their differences in perspective, unless they are "forced" to meet and share experiences. Joint education and experience programs are often aimed at just that. These occasions serve as neutral territory to create a common culture that supports communications. What remains is the dynamics problem. To overcome the differences in dynamics, a production logistics metaphor is used that will lead to the introduction of decoupling points for development processes. The authors have named this knowledge logistics. In this paper, the concept of knowledge logistics is explained using the TAO-model(c) and is presented against a background of case histories.