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Innovative Tools for Managing High-Risk R&D Teams |
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COMPANY ONE was established in 1994. It researches, develops, markets and sells a broad-based business software platform to address supply chain issues. The firm employs more than 200 people worldwide and reported $11.5 million in total revenues for the six months period ending June 30, 1999. This firm has licensed its software products to leading customers in the telecommunications, business services, manufacturing, and financial services industries.
The rapid pace of company growth and technology development, along with our ability to attract entrepreneurial individuals assists in our intellectual capital efforts. Continually offering the opportunity to participate in a technically challenging and stimulating environment is key to our success in building and maintaining commitment from our team.
Having a strong technical vision and offering the chance to be a part of an innovative development team working on "cool" technology is our most valuable asset in the attraction and retention of qualified and talented technical people. Also being a more innovative environment allows us a greater flexibility in the descriptions of jobs and role responsibilities that we can offer individuals.
The ability to make an impact on the market through technical innovation enables us to attract entrepreneurial individuals with fresh ideas and skills in productization.
Recruitment and retention are major challenges due to the rapid growth of the firm. Management must face the everyday challenges of scaling the company, the delegation of authority and empowerment of individual contributors, and maintaining a flexibility of description in individuals' roles and contributions.
Using recruitment services is a luxury that is difficult to afford for a small, fast-growing firm. Other sources of talent don't have what is needed.
As the company expands to face the issues involved in commercializing developed technologies, it must find a way to recruit a variety of individuals to focus on the myriad of associated tasks involved, and who are committed to excellence in customer interaction, service, and support.
Our goal is to hire permanent employees and focus on retaining them in order to maintain the technology leadership and product quality necessary for success. The R&D team is the main corporate asset of a high-technology, software company, and plays a major factor in the growth and accomplishment of the company as well the ability to differentiate the firm's products and solutions from competitors.
COMPANY TWO was established in 1998 to develop and license special analytical methods to the chemical industry. It has four employees and conducts about $ 1,000,000 per year in business.
The firm has realized successes in empowerment or performance management. This, in turn, has yielded benefits in intellectual capital. For those who choose to live in the Silicon Valley, especially the younger generation, cost of living is easily offset by the vibrant nature of the Valley. They are highly motivated to make a start-up company be as successful as any computer company in the Valley. Generally startup companies place more responsibility on individuals. With that come challenges on how to fulfill those responsibilities. That results in greater achievement and leads to intellectual property.
The firm's empowerment or performance management practices have yielded benefits in the attraction and retention of intellectual capital. Staff are quite enthusiastic and motivated to develop new technology. They also enjoy the high-level of responsibility placed on them as part of a start-up. It is relatively easy to advertise through job placement ads or electronic means.
Industry is receptive to our new technology. They have been very forthcoming in helping us identify target products that would be of high value to them.
In terms of building and maintaining commitment, we have found difficulties in attracting senior-level staff. Generally senior-level staff have more personal commitments and are thus less willing to live in a high cost-of-living area. Junior staff are generally younger and are easily attracted to the Silicon Valley.
Staffing and equipping our labs has taken more time than initially envisioned and that has led to a slower start toward demonstrations of our technology.
Generally the industry is most interested in seeing a demonstration. Staffing bottlenecks have held us back here.
We typically outsource technical work when one of two criteria are met: 1) the nature of the work involves a short-term need; 2) broadbased technical expertise is needed and is commonly found in consultants. We prefer to hire staff whenever possible, though we have been careful not to expand our technical expertise into areas where the market is not ripe.
COMPANY THREE was established in 1995. It produces artificial intelligence software that serves as infrastructure for the broadest range of software user applications. This firm employees 64 people and has annual revenue of $5 million.
Here the firm has experienced success in (a) recruitment, retention, and/or selection, (b) generation/retention of intellectual capital, (c) rewards, incentives, and/or compensation. We thought we would have difficulty finding the caliber of people we needed, but that proved to be a misapprehension on our part. We have a very low turnover rate compared to others in the software industry. Our people mainly leave to take tenure-track positions in academia. We don't pay top dollar but we do pay fair salaries. We offer salaries that are not large enough for a person to work for us just because of the salary, nor are they so low that a person will turn down a job offer because of the salary. We have a good benefits plan. We pay all premiums for medical PPO, dental PPO, and vision for the employee and the employee's family, as well as life and AD&D insurance, long and short-term disability insurance and long term care insurance for the employee. We have a bonus program that includes all employees and is based solely on merit and the profitability of the company in any given year. This firm also has a stock option plan that gives each employee equity in the company.
Same as above.
The firm has been most successful in the areas of (a) empowerment or performance management and (b) rewards, incentives, and/or compensation. We hired a Sales/Marketing Director one year ago. We give this individual a great deal of empowerment and independence, and he has been taking the lead in helping us figure out who else to hire in this area, and how to incentivize them and keep them. The "(X)" in parentheses above refers to the fact that we have such a small sample size (i.e., one person, and he is still with us) that it is probably not statistically valid to generalize from. As regards compensation, we are in a particularly good position because we can offer a percentage commission for sales, we can offer stock (actually stock options, since we are not yet a public company), etc. as incentives.
Empowerment/performance management. We have recently changed our management structure. The new system promises to be a more effective way to manage diverse groups of talented people. One problem is that, until this change was made, the original group of founders was seen as - and pretty much functioned as - a small oligarchy. The newer employees felt it was impossible for them to rise higher than the level of project manager; our company is now divided up into half a dozen departments, and only one of the departments is run by a founder.
Finding sources or assistance w/ recruitment. We receive resumes of qualified people everyday with virtually no recruiting other than a "positions available" section on our web site, plus word-of-mouth from professors to their students, from former employees (who generally had to leave because their spouse moved out of the area) to their friends and new co-workers, from current employees to their friends and relatives, etc. The only problem we seem to have is in hiring minority/handicapped people. Of course we don't discriminate; in fact, nearly all of our interviews take place over the phone and if someone is qualified they are hired; over half of our employees were hired this way, sight-unseen. It just happens that almost all the applicants are white, and most of them are male, hence so are most of the people we've hired so far. Since we now have over 50 employees, we are in the process of preparing a formal Affirmative Action Plan which will of necessity change our interviewing habits, from passive non-discrimination to active seeking out of minority and handicapped people. We will soon begin placing notices about open positions in places that will be more accessible to those listed in our Affirmative Action Plan.
Here the firm is challenged in the area of (a) recruitment, retention, and/or selection and (b) generation/retention of intellectual capital. Since productizing, marketing and sales, etc. is a relatively new aspect of business for us, it has been difficult for us to figure out who to recruit, what mission and constraints to give them, etc. Our usual channels for finding candidates are not relevant, nor are the questions we usually pose to technical candidates to evaluate their potential as purely technical employees.
We never 'outsource'. We have an occasional consultant but usually for things like preparing our Affirmative Action Plan, not for doing actual work on our systems.