The problem in today’s industry is not so much a focus on profitability, but rather a focus on short term profitability. A similar approach to corporate innovation in the process industries is not a problem, but a disaster.
Setting the stage
Visions, missions and strategies are the starting points for the planning processes. The message in the book by Minzberg “The rise and fall of strategic planning”, is thus not that strategy and strategic planning are obsolete, but that they should be carried out within the management teams and that the strategy should be an open and flexible document. Creating long-term technology, and product strategies and plans is one of the most important areas for the R&D management team, but one that is unfortunately often grossly neglected. We are not talking here about superficial and badly compiled documents which after being written will gather dust on the bookshelves of company executives.
On the contrary, every corporation needs a continuous strategy work process where strategic issues are carefully worked over and intermittently reassessed. Because of the inherent nature of process industry, the need for such long-term strategic guidance is unquestionable. There are, however, numerous examples of companies in the process industries (and other manufacturing industries) that have been totally wiped out by competing companies and new technology for lack of a long-term technology strategy and planning.
Product planning is a structured plan for company short-term incremental product improvements (product care), as well as a long-term plan for product renewal. The Product Plan must align well with the company’s overall business strategy. It must also integrate and bridge product improvements and the transition to new product generations. The complexity of making good Product Plans depend on the necessary company integration of valid product/market scenarios and assessment of future production capabilities, including the future quality of raw materials. There is consequently a need for development of good corporate Technology Plans and Product Plans that can serve as starting points and roadmaps for the successful development of an Innovation Strategy (Lager, 2010). Looking at Innovation from a Corporate Executive perspective, and especially in decentralized large multinational corporations, the innovation strategy is something that will have a strong impact on the future performance of the company as a whole.