BOOK REVIEW
Fred Y. Phillips: Market-Oriented Technology Management. Springer-Verlag, New York, 2001, 417 pages, ISBN 3-540-41258-1
Many books and articles have been published on technology management. So, why write another book? Phillipsí motivation for writing the book is two fold. One, to meet the perceived needs of particular groups: entrepreneurs, innovators and those aspiring to become practicing technology mangers. Included in the category of technical managers are those who acquire technology and technology products, market and sell products and manage and/or make decisions concerning innovations. Second, to provide a broader view of technology management, a view that considers not only the technological aspects but also the social, ethical and institutional aspects
The book consists of five parts, further divided into eleven chapters. Each chapter also contains a section on Questions and Problems, making the book suitable as a possible text for a course on technology management.
Part I, Technology Life Cycles, begins with a review of the basics of technology management. It is followed by an interesting discussion about classifying products into four categories, technology fusion and technology mapping. Major focus here is on technology life cycles, a concept that views technologies, products, categories of products and industries as undergoing an evolutionary path consisting of various stages. The life cycle view has been well researched and relatively well established. For example, Modis has provided many useful insights into the theory and applications of the life cycle concept [1]. For a technology manager, understanding life cycles is quite important. Better forecasts and decisions are often possible when life cycles are properly planned and analyzed. For example, cycle time (time needed to bring a product from conceptual stage to the market) can be compressed by managing the evolution of a productís life cycle. The use of approaches such as concurrent engineering to develop faster, cheaper and better products utilize techniques for life cycle management. Other benefits of life cycle management have also been observed. These include improved competitive analysis and forecasts of product demand and inventory levels. Indeed, a good technology management involves good life cycle management.
Part II, Acquisition of Technology, focuses on two topics: core technology and technology transfer. Much has been written about core technologies since the initial publication of the book by Prahalad and Hamel [2]. However, a technology manager still has to grapple with some thorny issues: what is a core technology; how to identify and nurture it; and, how to continuously evaluate and reevaluate it. Although Phillips does not address all of these concerns, he does suggest that a core technology can be characterized in terms of four attributes: it should be state of the art, fully tested and debugged, well protected through patents, etc., and relevant to the marketplace.
Technology transfer has to be a key concern of any technology manager. Examples abound about the failure of organizations to recognize and seize the opportunity to transfer internal and/or external technologies. Technology transfer is a complex process consisting of many activities and relying on different mechanisms to fulfill its functions. Phillips discusses several mechanisms for enabling the transfer processes. The list includes well-recognized mechanisms such as licensing, acquisition, joint ventures, etc. Four models are suggested to select from such mechanisms: the people-mover model (relying on people who own knowledge), communication model (relying on documents and organizational memories), ìon-the-shelfî model (relying on technology that can be available on demand) and the vendor model (relying on purchasing). Two real world situations are also discussed: the Japanese approach to technology incubation and the universities and industries working together.
Part III, Managing Technological Risks, focuses on two areas: managing risks associated with technology and the influence of government policy on technology acquisition and utilization. This part of the book is most useful since few books on technology management delve into the topics of risk management and the relationship between government policies and organizational performance.
Risk management is a critical ingredient of successful product development and project management. Yet, few organizations have well-documented processes to manage risks and uncertainty. Perhaps, this is due to an organizationís indifference to deal explicitly with the future. Indeed, Phillips correctly observes: ìWe attend too closely to risk and not enough to uncertainty. In my experience, even explicit management of risks is lacking, as few organizations have established processes for risk management.î Five ways to minimize risks are suggested: provide better information for decision making; make optimal decisions whenever possible; reduce the cost of erroneous decisions; reduce risks directly; and, pool risks. To illustrate, comparison is made between the U.S. and Japanese approaches to the development of new products.
Government policies at the national and international levels are increasingly affecting what an organization does and can do. The motivations for increased influence are many, ranging from political ambitions to the so-called need to protect the consumer. As a result, a technology managerís job has become more complex. The influence of government policies is profound in many areas. For example, federal policies regarding R&D, policy that affect the transfer of government-owned and government-funded technologies, role of government labs such as Los Alamos and Argonne, policies regarding patents, merger and acquisitions and international trade. There are many other issues as well: work force (the availability of skilled managers and developers), privacy, ethics, taxes, dealing with international organizations, how some nation states manage their industrial and technology policies. Although a technology manager cannot fully grasp all of these issues, the sphere of his capabilities has to include knowing their ramifications.
Technology managers face other challenges. First, they need to identify markets for their new products. Second, to know how to adopt products that are new to their firm. They also need to develop appropriate strategies for marketing. Part IV, New-To-The-World Products, focuses on such challenges. Identifying potential markets and their segments requires good information concerning requisite technology, customer and competitor profiles. How can the needed information be developed? Phillips suggests and describes three related approaches: technology forecasting, technology assessment and technology appraisal.
No organization can be totally self sufficient for all of its technology needs. Rather, it must deliberately manage its dependency for technologies from other firms. This means timely adoption of new products from other firms is necessary for leveraging and expanding its competitive advantage. Phillips explores some of the issues related to technology adoption. However, the discussion is rather short, mainly relying on Rogersí work on the diffusion of innovations [3]. Other important topics such as change management and organizational learning are intentionally left for the readers to pursue on their own. Instead, Phillips chooses to devote more material to the topic of life cycle costing. This is unfortunate, since, in my opinion, many technology managers these days have insufficient training, or possess adequate tools, for dealing with change at the organizational and individual levels. Consequently, many organizations turn to outside consultants. And, if the consultantsí approach is successful but not fully institutionalized, the status quo persists.
Part IV concludes with the discussion of strategies and tactics for marketing new-to-the world products. However, the discussion is relatively brief. A catalog and workbook of strategies and tactics are offered with examples and pitfalls to watch. An interesting list, but the reader will need to hunt for more details elsewhere.
Part V, Into the Future, shifts the focus to two areas: how to transition from the niche market to mass market and the future of technology commercialization. Phillips suggests various strategies for shifting to mass market. These include: low, low price, standardization, gaming, advertising and the Trojan Horse. Examples are given to illustrate the application of each strategy. Perhaps, a more interesting strategy is the Trojan Horse; this is the strategy followed by Nintendo. Again, the discussion here is relatively brief.
The last chapter devoted to the future of technology commercialization is quite interesting. Many useful suggestions and insights are provided, particularly about systematizing commercialization. For example, the innovation process, depicted as the innovation arrow (page 364) is a powerful way to communicate dependencies between the life cycle stages and the groups and resources needed to support commercialization. Several good examples are provided to illustrate what the best companies do to commercialize technology, how institutions promote technology entrepreneurship and how five high-tech companies dealt with the risks of technology entrepreneurship. Indeed, experiences of these five companies portray very well the necessary ingredients for successful technology commercialization.
Overall, I found Phillipsí book useful in three ways. First, it provides, in a single volume, a host of topics that will interest the practicing technology managers. Second, it provides a broader, a more systemic view of technology management. Finally, the book can be useful as a text or supplemental reading. One negative of the book is its presentation and formatting. It could have employed a better format. For example, the boxed examples and stories often get into the way of following the body text. But, this is a minor annoyance; there is much more to be gained by being a patient reader.
References
Modis, Theodore, Conquering Uncertainty: Understanding Corporate Cycles and Positioning Your Company to Survive the Changing Environment, Business Week Books, McGraw-Hill, New York, 1998.
Prahalad C.K. and Gary Hamel, Competing for the Future, Harvard Business Scholl Press, Boston, 1994.
Rogers, Everett M., Diffusion of Innovations, Free Press, 1995.
Kish Sharma, Solana Beach, CA