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Creating a winning R&D culture-II: how a new five-step approach to increasing R&D group effectiveness was implemented more broadly in The Dow Chemical Company.

Article Excerpt
In a prior article in Research-Technology Management (Jan.-Feb., 2009, pp. 35-50), we described how the creativity of the R&D leadership culture at Dow Chemical's Polyolefins and Elastomers (PO&E) business was raised by implementing a new business development (NBD) philosophy called Speed. By using Speed, the commercial success rate of NBD activities was raised to 84-95% (vs. the norm of 11%) after completion of the early stages of NBD (1-3). In other words, the approach delivers profits per person-year eight times faster than standard stage-gate NBD processes, and consequently twice as much profit can be attained with an NBD group that is one-fourth the usual size. This is always beneficial, but especially in harsh financial times.

In 2005, Dow was realigned so that much of the rest of the company adopted this philosophy (4). Implementation was most rigorous within the Dow Performance Plastics and Chemicals Division, which includes Dow Automotive. This involved identifying and coaching six Rainmakers, each of whom completed a Business Opportunity Analysis.

In prior years, according to top management, Dow Automotive had greatly over-promised but under-delivered new business growth. Since that time, in 2006, new management established new growth goals that called for more than doubling the revenue and profits from this business by 2011. (This was prior to the severe 2008 automotive recession.)

The first thing top R&D management did was to rapidly raise the creativity of R&D management by bringing in more inherently creative leaders. This was achieved in less than one year (vs. 4 to 8 years for the business described in the first of these two papers), proving how fast this sort of cultural transformation can be achieved. However, even after these changes, Dow's new top Automotive R&D management was convinced that there was still insufficient creativity within the division's R&D leadership to generate the new products required.

To assess what actions were really needed, we started by taking the first step of the proven five-step model described in Part I of this series and shown in Figure 1 (5,6).

1. Raise Leadership Group's Creativity

The first step involved measuring the creativity of the Dow Automotive R&D leadership, again using Form G of the MBTI[R] psychological profiling instrument. As before, this was done on an entirely voluntary basis with participation exceeding 98% from both the top scientists and managers in leadership positions (designated within Dow as leadership level LI and above). The findings were a surprise to Dow Automotive top management. The 2005 Automotive R&D leadership group was slightly more creative than the PO&E R&D leadership group of 2001 on all metrics measured (Figure 2). This was even after PO&E R&D leadership had been transformed into a far more creative organizational culture than in 1991. This was a simple metric to measure, and it changed the expected course of action completely. Additional creative leadership did not need to be brought into Dow Automotive R&D.

[FIGURE 1 OMITTED]

2. Match Leadership Personalities to Job Roles

As noted earlier, the personality types of the Dow R&D leaders were determined by the MBTI instrument to be primarily Starters or Finishers. The next step involved ensuring that the Starters and Finishers among the R&D leadership were in the correct job roles (5, 6). For each leader, the directors assigned job roles as either Starting (involving initiating or developing) or Finishing (involving growing or enhancing). This was...

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