Saturday, July 07, 2007

Case 4 HomeStar R&D


This case is about a company facing external and internal challenges at the same time. This home appliance manufacturer has had its long-lasting reputation because of its ability to come up the best technology innovation. However, the market is changing all the time and now the consumers are not only looking for the breaking edge technologies, but also the design and emotional attributes. Observing this market trend, HomeStar's main competitor launches certain number of new products in a very short period of time, gets great attention from the press, and successfully grabs some market share from HomeStar. So what about the internal problem HomeStar has? Its R&D director, Charlie, is a veteran in this industry, has contributed a lot to the most innovative products HomeStar ever had, and also has attracted lots of tech talents for Homestra as well. However, he just devotes himself into the technology that he consider to be the one, but refuses to deal with the new product needs that market research department asks him to do. The most ridiculous thing is that the CEO, Hal, is not really the one who makes the final call. Not surprisingly, it is Charlie who is the one always makes the final call in HomeStar. So what should Hal do? He is thinking of hiring someone could balance the company's long-tern needs, advanced technology, and short-tern needs, the products that could satisfy consumers needs in the short-run. So far there is a candidate in Hal's list – Peter, who just sold out his R&D service company. However, how to deal with Charlie is really a serious problem when executing the re-organization plan or HomeStar might lose this veteran and the talents sticking to Charlie reputation.

My suggestion is to divide the new products into several groups. One axis is the product category - consumer product, homebuilders' product, and new generation product. Another axis is time period – six month, one year and more than one year. The reason why I suggest emphasizing on the product category is there are different needs for these three groups. In terms of the time period, according to Parkinson's Law, since the working hour expands to fulfill the available time, there has to be a very clear time frame to control the new product development to make sure HomeStar can most utilize the NPD resources. I would tell Charlie that the problems the company having now. Although Charlie might respond to Hal that only morons will buy those craps, this conversation might give Hal a chance to touch on the possibility that company will establish a new division to take charge of those "craps" product development. So Hal can appoint Charlie to take care of the long-tern NPD, and hire Peter to direct the mid and short-tern NPD. Of course, Peter could also outsource some short-tern projects to shorten the time and to lower the cost since he has sufficient knowledge and network of R&D service industry. However, Hal needs to review the evaluation system to make sure that the rewards are highly related to R&D staffs' contribution. Without a good evaluation system, R&D department can't really start to make the most use of the resources – Parkinson's Law again, expense expanses to the available budget. At the end of the day, it is all about management.

So what is your opinion to this case? Don’t hesitate to post your opinion on my blog.

No comments: