Guest post by Has Patel, Founder & President, Infologic, Inc. and AMP SoCal Pillar Committee Member
R&D and Technology Commercialization processes are mainly based on peer review and subjective decisions. There is a need to employ analytics to take the guesswork out of such important management decisions. Such views are also supported by The National Academies of Sciences report on best practices in assessment of R&D organizations. This report states that “Peer review, coupled with quantitative and qualitative metrics, is a critical part of an effective assessment of the R&D organization.”
How to embed analytics in the Commercialization processes? What are the most effective Commercialization attributes for such analytics? What are the effective metrics?
R&D and Technology Commercialization – Art to Science!
Mr. Steve Blank a Silicon Valley serial entrepreneur, and an associate professor of entrepreneurship at Stanford University observed that, “The collective wisdom of venture investors (including angel investors, and venture capitalists) over the past decades has been mostly subjective. Investment decisions made on the basis of ‘awesome presentation’, ‘the demo blew us away’, or ‘great team’ is used to measure startups. These are 20th century relics of the lack of data available from each team and the lack of comparative data across a cohort and portfolio. Those days are over.”
To address this issue, and convert the Commercialization decisions from “Art to Science”, there is a need to incorporate R&D and technology maturity analytics to measure the readiness of a venture for Commercialization.
The leading global strategic management consulting firm, McKinsey & Company also encourages such maturity analytics for managing Commercialization practices. Their recent report, titled: Brightening the black box of R&D | McKinsey & Company quotes, “ To capture the outputs (of R&D) —a stickier task—we settled on using, first, the gross contribution of a project and, second, a complementary measure: the rate of maturity, or a project’s progress toward meeting its full technical and commercial requirements. We chose these measures for their overall explanatory power and the visibility they provide into certain aspects of the R&D process.”
The National Science Foundation (NSF) has also adopted such R&D and Technology maturity assessment analytics to commercialize NSF-funded academic research in their program, called Innovation Corps (I-Corps™). According to NSF, I-Corps™ is a set of activities and programs that prepares scientists and engineers to extend their focus beyond the laboratory and broadens the impact of select, NSF-funded, basic-research projects. One of the training components of the program is a Stanford University’s The Lean Launchpad curriculum which also incorporates a metric, called Innovation Readiness Level (IRL). The IRL can be used as part of “go” or “no-go” decision for commercialization. The IRL is based on NASA and Department of Defense (DoD)-developed Technology Readiness Levels (TRLs) assessments.
I propose that the Startup organizations and their stakeholders employ the TRLs assessments to measure the readiness for Commercialization, and manage the process using the well-recognized CMMI® maturity model.
CMMI®-based R&D and Technology Commercialization Practice
According to the Carnegie Mellon University (CMU)-managed CMMI Institute which developed this model, “The Capability Maturity Model Integration (CMMI®) is a capability improvement model that can be adapted to solve any performance issue at any level of the organization in any industry. The Model provides guidelines and recommendations for helping organizations diagnose problems and improve performance.”
The following figure is a suggested CMMI®-based approach.
The left side of this figure is the NASA/DoD TRLs metric. It is a nine step process which covers the major milestones of a typical Product Lifecycle Management (PLM) process.
In the middle of this figure, the typical PLM steps indicate the maturity of R&D and Technologies as they progress from “Basic Research” to “Commercialization.” The right side of this figure are the CMMI® steps which measure the maturity of Commercialization as it progresses from “Incomplete” to ‘Optimized.”
There are a range of resources available from both public and private organizations to conduct such TRLs and CMMI®-based analyses. One such resource is the DoD TRL Calculator which is based on a metric, called Psychometric which is widely used in the Imaging field to obtain scale value of image quality and attributes.
To learn more, you may review the Presentation slides of a lecture on R&D and Technology Due Diligence which I delivered at the University of California, Irvine (UCI) Applied Innovation Center.