Managing New Product Development

B Y R O B E R T J . P O T T E R

M y a s s i g n m e n t is to c o m m u n i c a t e s o m e of m y t h o u g h t s o n the s u c ­

c e s s f u l d e v e l o p m e n t a n d i n t r o d u c t i o n o f n e w p r o d u c t s . I w i l l concen t ra te o n g e n e r a l p r i n c i p l e s because t hey a p p l y e q u a l l y w e l l to so f tware , h a r d w a r e , se rv i ces , o r s o m e c o m ­b i n a t i o n of these e lements . T h i s d i s c u s s i o n a p p l i e s to tech­n i ca l l y r i ch p r o d u c t s a n d e x c l u d e s c o n s u m e r p r o d u c t s , fads , a n d other p r o d u c t s that m i g h t be d i s t i n g u i s h e d o n l y b y the w a y they are m a r k e t e d .

S ince the p o i n t of v i e w I 'm o f fe r i ng y o u is r oo ted i n m y expe r i ence , let m e desc r i be that b r ie f l y . I h a v e w o r k e d fo r severa l la rge c o m p a n i e s , s ta r t ing as a t e c h n o l o g y d e v e l o p e r , t h e n m o v i n g i n t o m a n a g e m e n t . F o r m o s t of m y career , I h a v e l o o k e d m o r e l i k e a t e c h n i c a l l y s t r o n g b u s i n e s s m a n than a scient is t . S o m e p e o p l e h a v e ca l l ed m e a s a l e s m a n i n eng inee r ' s c l o t h i n g , o r v i ce v e r s a . F r o m one pe rspec t i ve o r another , I h a v e b e e n f o c u s i n g o n n e w p r o d u c t d e v e l o p m e n t i n b i g c o m p a n y e n v i r o n m e n t s fo r 30 years .

REVOLUTIONARY PRODUCTS

S o m e of y o u m i g h t be d e v e l o p i n g r e v o l u t i o n a r y p r o d u c t s based o n en t i re ly n e w techno log ies . T h o s e of y o u w h o suc ­ceed w i l l b e c o m e w e a l t h y a n d m a y create n e w i n d u s t r i e s . Un fo r t una te l y , m o s t p e o p l e w h o t ry to d e v e l o p r e v o l u t i o n ­a ry p r o d u c t s d o no t s u c c e e d . T h e success s to r ies are v e r y few.

T h o s e successes , s u c h as x e r o g r a p h y , t r ans i s t o r s , a n d l ase rs , a l s o teach u s tha t the p r o d u c t d e v e l o p m e n t c y c l e f r o m i n v e n t i o n a n d d i s c o v e r y to the b u s i n e s s p h a s e takes decades . Ref lec t o n the i n v e n t i o n of x e r o g r a p h y i n 1938, a n d r e m e m b e r the c o p i e r r e a l l y d i d n o t i m p a c t the b u s i n e s s w o r l d u n t i l the ea r l y 1960s. T h e laser w a s i n v e n t e d i n 1960, b u t h a r d l y a n y b o d y m a d e a n y m o n e y w i t h i t u n t i l the late 1970s. T h e t rans is to r w a s i n v e n t e d in 1947, a n d the in tegra t ­e d c i r cu i t c a m e in to w i d e s p r e a d use i n the 1960s. M i n e w a s the f irst d o c t o r a l thes is o n f iber op t i cs i n the U . S . It w a s a decade later before f iber op t ics b e c a m e c o m m o n l y ava i l ab le a n d t w o decades before the q u a l i t y w a s adequa te for la rge scale t e l e c o m m u n i c a t i o n s app l i ca t i ons .

W h i l e I w a s p r e p a r i n g th i s p a p e r , I B M a n n o u n c e d a n e w op t i ca l d i s k t e c h n o l o g y to ex tend m o r e t h a n ten fo ld the s to rage capac i t y of d i g i t a l d i s k s u s e d to p l a y b a c k m u s i c , v i d e o , or c o m p u t e r da ta . T h e I B M t e c h n o l o g y s a n d w i c h e s u p to 10 layers i n the same f o r m a t u s e d b y a c o n v e n t i o n a l m u s i c C D or c o m p u t e r C D - R O M (see OPN, A u g u s t 1994, p a g e 39). T h e 10 - l aye r d i s k w o u l d h o l d a b o u t 6.5 b i l l i o n by tes of d a t a , e q u i v a l e n t to m o r e t h a n a m i l l i o n p a g e s of p r i n t e d text. T h i s appea rs to be a v e r y i m p o r t a n t a n d t i m e l y a n n o u n c e m e n t . Bu t i n the late 1950s, the s a m e I B M research center a n n o u n c e d a n op t i ca l d i sk , a r e a d - o n l y m e m o r y that h e l d a R u s s i a n - E n g l i s h d i c t i o n a r y i n a h a l f - i n c h b a n d abou t s ix inches i n d i a m e t e r o n a g lass d i s k m o v i n g at h i g h s p e e d a n d read b y a ca thode ray tube scanner . A l t h o u g h the New York Times p u b l i s h e d the 1994 ar t ic le o n the f i rst p a g e of i ts bus i ness sec t ion w i t h a p i c tu re , a schemat i c d r a w i n g , a n d at

least 20 i nches of text, i t c a u s e d m e to ask , " W h a t is a n e w t e c h n o l o g y ? W h a t is a n e w p r o d u c t ? Is th is op t i ca l d i s k new , or is i t the cu r ren t v e r s i o n of the 1950s d i s k , w h i c h w a s no t r e f e r e n c e d ? " A s u c c e s s f u l n e w p r o d u c t requ i res a de l i ca te con f l uence of i ts t echno logy , m a r k e t , t i m i n g , a n d cost in ter ­sec t ing w i t h c u s t o m e r needs a n d the i r ab i l i t y to use it. T h e C D - R O M a c c o m p l i s h e d th is . M a n y o the r o p t i c a l m e m o r y p r o d u c t s a n d techn iques d i d not.

W h e n I w a s i n the c o r p o r a t e w o r l d , w e p r o v i d e d the b a c k i n g a n d the o r g a n i z a t i o n fo r p e o p l e to d e v e l o p r e v o l u ­t i o n a r y p r o d u c t s . B u t the chances of s u c c e e d i n g are so s m a l l a n d the p ressu res of b u s i n e s s so great that m o s t p e o p l e c o n ­cen t ra ted resources o n d e v e l o p i n g e v o l u t i o n a r y , h e r e - a n d -n o w p r o d u c t s .

EVOLUTIONARY PRODUCTS

M o s t success fu l n e w p r o d u c t s are e v o l u t i o n a r y ; that is , they are no t b a s e d o n en t i re l y n e w techno logy . F o r e x a m p l e , I a m w r i t i n g th is ar t ic le o n a c o m p u t e r that con ta ins a 486 m i c r o ­p rocesso r o p e r a t i n g at a 66 M H z c lock rate. It con ta ins 8 M B of R A M a n d a 450 M B h a r d d i s k , a n d is connec ted to a laser p r in te r . Its m i c r o p r o c e s s o r a n d m e m o r y c a m e f r o m m a n y e a r l i e r g e n e r a t i o n s o f P C s . If a p r o d u c t l i k e t h i s c a n b e p r i c e d for less than $3,000, i t c a n be success fu l i n 1994.

M a n y l a r g e a n d s m a l l c o m p a n i e s p r o s p e r a n d o f fe r r e w a r d i n g career pa ths fo r the i r e m p l o y e e s b y d e v e l o p i n g success fu l e v o l u t i o n a r y p r o d u c t s . O n m y desk , I h a v e a tele­p h o n e , a n a n s w e r i n g m a c h i n e , a n i n t e r c o m , a n e l ec t ron i c ca lenda r , a steel tape m e a s u r e , a n d f o u r p h o t o g r a p h s — a l l e v o l u t i o n a r y p r o d u c t s of w h i c h m i l l i o n s w e r e s o l d .

S o m e t i m e s n e w p r o d u c t s tha t c o n t a i n a b s o l u t e l y n o t e c h n o l o g i c a l i n n o v a t i o n s u c c e e d b e c a u s e o f i n n o v a t i v e m a r k e t i n g . E D S f o u n d a d i f ferent w a y to d e l i v e r c o m p u t e r se rv i ces . D e l l C o m p u t e r b e c a m e a m u l t i b i l l i o n - d o l l a r c o m ­p a n y because i t f o u n d a n e w w a y to se l l P C s b y e n a b l i n g c u s t o m e r s to o rde r t h e m b y te lephone .

O n the o ther h a n d , D e l l recent ly w i t h d r e w a p r o d u c t it h a d a n n o u n c e d b u t n o t i n t r o d u c e d b e c a u s e the p r o d u c t c o u l d n o t be s o l d fo r the r i g h t p r i c e . S u c c e s s f u l p r o d u c t s r e q u i r e a p r u d e n t a n d s o m e t i m e s u n i q u e j u x t a p o s i t i o n of the r i gh t t echno logy , the r i gh t e n g i n e e r i n g , the r igh t p r i c e , the r i gh t d i s t r i b u t i o n c h a n n e l s , the r i gh t m a r k e t t i m i n g , a n d the r i gh t c u s t o m e r e n v i r o n m e n t .

C R E A T E A C L E A R S T R A T E G I C S T A T E M E N T

A c lear s t ra teg ic s ta tement separa tes w i n n e r s f r o m e v e r y o n e else. W h e n y o u are d e v e l o p i n g a n e w p r o d u c t , w h e t h e r rev ­o l u t i o n a r y o r e v o l u t i o n a r y , y o u s h o u l d h a v e a st rategy that y o u c a n e x p r e s s i n o n e s e n t e n c e . L e t m e g i v e y o u a f e w e x a m p l e s , s o m e of w h i c h m a y be a p o c r y p h a l .

E d w i n L a n d , f o u n d e r of P o l a r o i d , s a i d , "I w a n t to see the p i c t u re i n a m i n u t e . "

Joe W i l s o n , C E O of X e r o x d u r i n g its c r i t i ca l t ime , s a i d , " L e t ' s c h a r g e b y the c o p y i n s t e a d o f the m o n t h . " In the 1960s, p e o p l e r e n t e d c o m p u t e r s a n d off ice e q u i p m e n t o n a

38 OPTICS & PHOTONICS NEWS/NOVEMBER 1994

m o n t h l y bas is . Joe W i l s o n p u t i n a mete r a n d c h a r g e d b y the copy, a n d that i n n o v a t i o n con t r i bu ted s ign i f i can t l y to X e r o x ' success.

S o m e o n e at E a s t m a n K o d a k u n d o u b t e d l y s a i d , " M a k e per fect f i l m . "

I d o no t k n o w w h o i n the au to i n d u s t r y to c red i t w i t h th is one: " D r i v e the car w i t h the f ront w h e e l s . " F r o n t - w h e e l d r i v e cars are safer a n d m o r e m a n e u v e r a b l e .

O n e - l i n e s ta tements s u c h as these c a n l e a d to v e r y suc ­cess fu l p r o d u c t s a n d b u s i n e s s e s . If y o u r s t r a tegy is c lear , y o u c a n c o m m u n i c a t e i t e a s i l y to p e o p l e w i t h a s take i n y o u r bus i ness : e m p l o y e e s , c u s t o m e r s , v e n d o r s , s h a r e h o l d ­e rs , a n d p o t e n t i a l i n v e s t o r s . If y o u c a n n o t e x p r e s s y o u r st rategy c lear ly , y o u r v i s i o n is too b l u r r y to go f o r w a r d ; y o u w i l l was te t ime a n d m o n e y .

H e r e are the m o s t i m p o r t a n t r equ i r emen ts for success­f u l p roduc t s :

1. The product must make money for its customer. U n i t e d A i r l i n e s b u y s 777s f r o m B o e i n g b e c a u s e the n e w p l a n e a l l o w s t h e m to d e l i v e r m o r e p a s s e n g e r m i l e s at a l o w e r cost . C o m p a n y X Y Z b u y s a c o m p u t e r o r p r i n t e r o r c o p i e r b e c a u s e i t e n a b l e s t he i r a c c o u n t i n g o r p u r c h a s i n g d e p a r t m e n t to get m o r e w o r k d o n e at a l o w e r cost. A n i n d i ­v i d u a l p rac t i t i one r s u c h as a doc to r , p h o t o g r a p h e r , o r car ­penter w i l l b u y p r o d u c t s that m a k e h i m or he r a m o r e pro f ­i tab le b u s i n e s s ent i ty. If p r o d u c t s d o n o t m a k e m o n e y for b u y e r s , they w i l l r e m a i n o n the shelf .

M a n y en t rep reneurs get so c a u g h t u p i n m a k i n g m o n e y for t h e m s e l v e s , they fo rget a b o u t m a k i n g m o n e y for the i r c u s t o m e r s . T e c h n o l o g i s t s h a v e to u n d e r s t a n d that e l egan t t echno logy is no t the object ive. M a k i n g m o n e y is the objec­t ive. T h e e legant t e c h n o l o g y w i l l d i s a p p e a r un less i t m a k e s m o n e y for its user.

2. The technology must be appropriate for the application. L a s e r or x e r o g r a p h i c p r i n t i n g t echno logy is a p p r o p r i a t e fo r a d e s k t o p o r c o m p u t e r p r in te r , no t fo r a n e w s p a p e r p ress . T h e t echno logy m u s t be a p p r o p r i a t e fo r the a p p l i c a t i o n a n d the e n v i r o n m e n t . It s o u n d s s i m p l e , b u t I h a v e seen c o u n t ­less p r o d u c t s that n e v e r m a d e i t to the m a r k e t p l a c e because s o m e b o d y i g n o r e d th i s p o i n t . It is h a r d to g i v e f a m i l i a r e x a m p l e s , because these concep ts n e v e r s a w the l i gh t of the bus iness day.

3. The product must work perfectly. Japanese car m a n u f a c t u r e r s taugh t th is p r i n c i p l e to A m e r i ­c a n car manu fac tu re r s . In the 1960s, A m e r i c a n a u t o m o b i l e manu fac tu re r s d i d no t a b i d e b y that p r i n c i p l e . A s a resu l t , they a l l o w e d fo re ign m a n u f a c t u r e r s to take b i l l i o n s of d o l ­la rs ou t of the A m e r i c a n e c o n o m y .

4. The product must be easy to use. M o s t s u c c e s s f u l p r o d u c t s are u s e a b l e w i t h o u t i n s t r u c t i o n b o o k s o r w i t h m i n i m a l d i r ec t i ons . T h e c o m p u t e r i n d u s t r y

t r a d i t i o n a l l y w a n t e d p e o p l e to b e c o m e c o m p u t e r l i te ra te . Sales are i n c r e a s i n g n o w that c o m p u t e r s are b e c o m i n g p e o ­p l e l i te ra te . T h e t e l e p h o n e w a s a l w a y s u s e r f r i e n d l y . F a x f l o u n d e r e d u n t i l i n d u s t r y s t a n d a r d s w e r e e s t a b l i s h e d , a n d the m a c h i n e s b e c a m e easy to use .

K E Y STEPS IN PRODUCT DEVELOPMENT AND INTRO­

DUCTION

T h e p rocess of d e v e l o p i n g a n d i n t r o d u c i n g a n e w p r o d u c t i n v o l v e s m a n y b u s i n e s s a n d techn i ca l s teps. T h e k e y po in t s are o f fe red b e l o w . T h e f i rst t w o are c l ose l y re la ted , so I w i l l ci te t h e m b o t h a n d t hen e x p l a i n t h e m together.

1. The product concept must be proved with a prototype. A p r o t o t y p e is an ea r l y c o n f i g u r a t i o n that m a y or m a y no t be i n the f o r m , shape , a n d s i ze of the u l t ima te p r o d u c t , b u t the p r o t o t y p e m u s t d o e v e r y t h i n g the p r o d u c t s h o u l d do .

2. The engineering model must be in the right configuration, and it must be shown to work in every way, in every application. A n e n g i n e e r i n g m o d e l m i g h t b e h a n d - m a d e r a t h e r t h a n m a n u f a c t u r e d , b u t i t has the same s i ze , shape , a n d c o m p o ­nents as the f i n i s h e d p r o d u c t , i n a d d i t i o n to d o i n g e v e r y ­t h i n g it s h o u l d d o .

W i t h respect to b o t h the p r o t o t y p e a n d the e n g i n e e r i n g m o d e l , too o f ten the e n g i n e e r says , "It does a l m o s t e v e r y ­t h i n g i t n e e d s to d o . W e w i l l f i x i t i n the nex t r o u n d . " It a l m o s t n e v e r gets f i x e d , fo r t w o reasons .

F i r s t o f a l l , p r o d u c t d e v e l o p m e n t i s a n i n e l a s t i c p r o c e s s — i n m o s t cases, the o n l y w a y to a d d a n e w feature is to c o m p r o m i s e a n ex i s t i ng one. S u p p o s e y o u w a n t to d e v e l ­o p a fast, c o m p a c t , i n e x p e n s i v e cop ier . T h e eng inee r s h o w s y o u a d e s i g n that is c o m p a c t a n d i n e x p e n s i v e , b u t no t fast e n o u g h . H e says , " N o p r o b l e m , w e c a n m a k e it go faster." Bu t i f the p a p e r r u n s t h r o u g h the fuser too fast, y o u get b a d c o p y qua l i t y . Y o u c a n i m p r o v e the c o p i e s b y p u t t i n g i n a b i g g e r fuser , b u t then the c o p i e r is n o l o n g e r s m a l l a n d inex­p e n s i v e . O n l y s i m u l t a n e o u s p e r f o r m a n c e of a l l the features m a k e s a p r o d u c t r i gh t . In m o s t cases , the p r o t o t y p e s a n d e n g i n e e r i n g m o d e l s that are r i gh t are r i gh t i n the b e g i n n i n g . O t h e r w i s e , the p r o d u c t concep t is u s u a l l y no t s o u n d .

T h e s e c o n d r e a s o n w h y p r o t o t y p e s a n d e n g i n e e r i n g m o d e l s n e v e r get f i x e d is tha t the p r o d u c t d e v e l o p m e n t p rocess c o m p r o m i s e s t h e m . T h e m a n u f a c t u r i n g p e r s o n says i t 's too cos t l y to m a n u f a c t u r e . T h e se rv ice m a n a g e r says y o u h a v e to m o v e the d o o r so a r e p a i r m a n c a n reach the gear. T h e m a r k e t i n g p e r s o n says i t 's too b i g or too heavy . W i t h o u t a s t r ong start, m o s t p r o d u c t s n e v e r m a k e i t to the f i n i s h l ine . A n d if they d o , they h a v e b e e n c o m p r o m i s e d so m u c h that t h e y ' v e b e c o m e a k l u g e a n d are n o l o n g e r cost ef fect ive i n the c u s t o m e r ' s e n v i r o n m e n t .

I a m no t s a y i n g that i n c o m p l e t e p r o t o t y p e s a n d e n g i ­n e e r i n g m o d e l s n e v e r succeed . B u t it is a n u p h i l l bat t le. In gene ra l , I t h i n k e n g i n e e r i n g m a n a g e r s n e e d to l e a r n to w e e d o u t w e a k p r o d u c t c o n c e p t s . O n e o f the m o s t i m p o r t a n t

OPTICS & PHOTONICS NEWS/NOVEMBER 1994 39

The Business of Optics

goa ls i n a p r o d u c t d e v e l o p m e n t l abo ra to r y is to a v o i d g o i n g d o w n too m a n y d e a d e n d s . In m o s t o r g a n i z a t i o n s , o n l y a s m a l l p e r c e n t a g e of p r o d u c t s m a k e i t to the m a r k e t p l a c e . T h e p r o d u c t s that succeed have to absorb the d e v e l o p m e n t costs of those that d o not .

Some t imes genera l m a n a g e r s start s p e n d i n g m o n e y o n the p r o d u c t before it has been p r o v e n . W h e n a la rge c o m p a ­n y in t roduces a p r o d u c t , it has to start se l l i ng t h o u s a n d s of them at m a n y d i f fe rent l oca t i ons a l l o v e r the coun t r y , pe r ­haps a l l over the w o r l d , at the same t ime. I h a v e seen m a n ­agers start b u i l d i n g m a n u f a c t u r i n g fac i l i t ies , m a k i n g t o o l i n g , educa t i ng the sales force, p r i n t i n g b rochu res , t r a i n i n g serv ice techn ic ians, a n d so o n , fo r p r o d u c t s that n e v e r m a d e it to the marke tp lace because , l i ke the p r o t o t y p e o r the e n g i n e e r i n g m o d e l , they never ac tua l l y w o r k e d r ight . D o not let projects that fa i l to sat is fy s o m e of the d e s i g n cr i te r ia start g r o w i n g , s p e n d i n g money , a n d s p i n n i n g ou t of con t ro l . D o no t accept 50%, or e v e n 90%. M a k e sure e v e r y t h i n g is 100% r ight .

3. Early production models must meet cost objectives and stan­dards for manufacturing. In genera l , large A m e r i c a n c o m p a n i e s f o l l o w this p r i n c i p l e w e l l . In sma l l e r c o m p a n i e s , i t 's m o r e d i f f i cu l t ; en t rep reneu rs d o n ' t k n o w w h a t the m a n u f a c t u r i n g cos t i s g o i n g to b e because they are t r y i n g to b u i l d s o m e t h i n g that has n e v e r been bu i l t be fore w i t h a n o r g a n i z a t i o n that m i g h t h a v e l i t t le m a n u f a c t u r i n g exper ience .

4. Field test units must meet the requirements of the customer environment. G o to a rea l c u s t o m e r w i t h a rea l p r o d u c t a n d ask , " W h a t d o y o u t h i nk of i t ? " In the c o m p u t e r i ndus t r y , th is p rocess is ca l l ed beta tes t ing. O v e r the last decade or t w o , th is step has become m o r e ma tu re a n d m o r e v a l u a b l e .

T h e success fu l i n t r o d u c t i o n of a techn i ca l l y r i c h p r o d ­uc t requ i res r i g o r o u s t e c h n i c a l t es t i ng f o l l o w e d b y s o u n d m a r k e t i n g a n d se l l i ng t h r o u g h the a p p r o p r i a t e d i s t r i b u t i o n channe l s at the r i gh t cost . T h e m a r k e t i n g p r i n c i p l e is that everybody must make money. T h e p r o d u c t m u s t be p ro f i t ab le t h r o u g h a n d t h rough . T h e d i s t r i bu to r o r rese l ler m u s t m a k e a g o o d p ro f i t m a r g i n , the m a n u f a c t u r e r m u s t m a k e a sens i ­b l e pro f i t , a n d , m o s t i m p o r t a n t , the e n d use r m u s t bene f i t f i nanc ia l l y f r o m b u y i n g the p r o d u c t .

C R E A T I N G A FERTILE ENVIRONMENT FOR PRODUCT

D E V E L O P M E N T

A fert i le e n v i r o n m e n t is essent ia l . If the r i gh t p e o p l e are i n the r i g h t e n v i r o n m e n t , t h e y w i l l d o m o r e t h a n y o u e v e r t hough t poss ib le . In the bus iness w o r l d , the e n v i r o n m e n t is a l l i m p o r t a n t , r ega rd less of the s i ze of the en te rp r i se . T h e e n v i r o n m e n t d e p e n d s s t rong l y o n the p e r s o n a l i t y a n d s ty le of the m a n a g e m e n t , o f ten the C E O a l o n e , o r the f o u n d e r , w h o c a n f o r m a n d shape the pe rsona l i t y of the c o m p a n y b y c rea t ing an e n v i r o n m e n t w h e r e p e o p l e c a n succeed .

W h e n I l e a d p r o d u c t d e v e l o p m e n t o r g a n i z a t i o n s w i t h i n

l a rge c o m p a n i e s , I t ry to fos ter the e n t r e p r e n e u r s h i p , c re­at iv i ty , a n d flexibility assoc ia ted w i t h s m a l l c o m p a n i e s . T h e k e y is to h e l p p e o p l e feel l i ke they are ves ted i n the en t i t y i n w h i c h they are w o r k i n g w i t h o u t c o m p r o m i s i n g the pa ren t o r g a n i z a t i o n . H e r e are s o m e techn iques I use :

1. Hold frequent informal meetings with small groups of people from all parts of the organization. I h o l d i n f o r m a l m e e t i n g s , s o m e t i m e s o v e r l u n c h , w i t h g r o u p s of 10 o r 15 p e o p l e a p p a r e n t l y p i c k e d at r a n d o m — p e o p l e w h o s e last n a m e s start w i t h J , o r w h o have a b i r t h ­d a y th is m o n t h , o r w h o got p r o m o t e d recent ly. T h e job t i t les of these p e o p l e t y p i c a l l y range f r o m techn i c i an to v i ce p r e s i ­den t . These m e e t i n g s h a v e t w o g r o u n d ru les . F i r s t , a n y o n e c a n ask a n y ques t i on . A j u n i o r t echn i c i an can l o o k m e in the eye , ask a q u e s t i o n , a n d get a n answer . These mee t i ngs c a n c o m p e n s a t e for weaknesses i n a n o r g a n i z a t i o n ; i n te rmed ia te m a n a g e r s m a y be y o u n g a n d i n e x p e r i e n c e d a n d no t k n o w h o w to g i ve c lear a n s w e r s a n d c lear d i rec t ions .

T h e s e c o n d g r o u n d r u l e i s t h a t a l l s t a t e m e n t s a r e quo tab le . T h i s ru l e b l o w s a w a y a n y m y s t i q u e of c o n f i d e n ­t ia l i ty or secrecy. I w a n t e v e r y o n e to go ou t a n d tel l thei r co l ­leagues w h a t they hear. I c a n state m y one-sentence p r o d u c t d e v e l o p m e n t st rategy a n d expect they w i l l r e m e m b e r it a n d repeat i t for the p e o p l e w o r k i n g next to them. T h e y w i l l go ou t o n the floor a n d say, " H e y , I w a s i n a m e e t i n g w i t h Po t ­ter, a n d he sa id the target fo r the p r i n te r is 30 characters pe r s e c o n d . D i d y o u k n o w that? I t hough t it w a s 20 . "

These m e e t i n g s g i ve m e a qu ie t a n d gent le w a y of m a k ­i n g sure e v e r y b o d y gets the w o r d . M e s s a g e s t end to get d i s ­to r ted w h e n they pass t h r o u g h the m a n a g e m e n t c h a i n a n d i n to a n o r g a n i z a t i o n of h u n d r e d s o r t h o u s a n d s of p e o p l e . G o o d c o m m u n i c a t i o n c rea tes e c o n o m y o f e f fo r t . P e o p l e w h o u n d e r s t a n d the s t ra tegy d o n o t d o w r o n g t h i n g s o r was te t ime o n i r re levan t tasks , a n d that b e h a v i o r i m p r o v e s the b o t t o m l ine . It 's pa r t of s a v i n g m o n e y .

These m e e t i n g s a lso keep the w h o l e m a n a g e m e n t t e a m g l u e d together. W h e n the i n t e r m e d i a t e m a n a g e r s k n o w that c o m m u n i c a t i o n s are g o i n g to be o p e n , they d o not p u t the i r o w n s p i n o n the ma jo r ob ject ives. F o r e x a m p l e , a n i n e x p e r i ­e n c e d m a n a g e r m i g h t say p r i va te l y , " T h e p r i n te r can ' t r ea l l y w o r k at 30 charac te rs a s e c o n d , so le t 's just t ry to b u i l d a m a c h i n e that w o r k s at 20 . " If the p r i n t e r can ' t w o r k at 30, I d o no t w a n t to s p e n d a d i m e t r y i n g for 20; a 20-charac ter p r i n t e r w o u l d be a d e a d e n d .

2. Run the organization as if it were a stand-alone company. I t ry to r u n m y g r o u p s o r d i v i s i o n s as i f they w e r e s t a n d ­a lone c o m p a n i e s . I t ry to s p e n d the c o m p a n y ' s m o n e y as i f it w e r e m y o w n . I u r g e the p e o p l e w o r k i n g for m e to s p e n d the c o m p a n y ' s m o n e y as i f i t w e r e the i r o w n .

A c o r p o r a t e d i v i s i o n o p e r a t i n g a g a i n s t a b u d g e t has m a n y th ings i n c o m m o n w i t h a s ta r tup f u n d e d b y v e n t u r e cap i ta l . Y o u h a v e a cer ta in a m o u n t of m o n e y to s p e n d , y o u r o w n " b a n k a c c o u n t . " Y o u c a n b u y e q u i p m e n t , p a y sa lar ies ,

40 OPTICS & PHOTONICS NEWS/NOVEMBER 1994

a n d g ive raises, bu t y o u cannot s p e n d m o r e than y o u h a v e i n the b a n k . S o m e p e o p l e w h o w o r k fo r l a r g e c o r p o r a t i o n s b e h a v e as if they h a v e u n l i m i t e d m o n e y b e h i n d t h e m a n d the i r sa la r ies are g u a r a n t e e d . T h e rea l i t y is that m o n e y is str ict ly l im i ted a n d that mos t peop le ' s salar ies are not gua r ­anteed at a l l . If w e d o not p r o d u c e , o u r d i v i s i o n w i l l fa i l . T h e bus iness e n v i r o n m e n t w i l l be more creat ive a n d m o r e ener­getic if y o u do not a l l o w y o u r peop le to ignore this fact of l i fe.

3. Shield people from the bureaucracy. E v e r y la rge c o r p o r a t i o n has i ts b u r e a u c r a c y , s y s t e m s , a n d p rocedu res that c a n s o m e t i m e s be a nu i sance . S o m e c o r p o ­rate headqua r te r s h a v e a n end less d e m a n d for repor ts , fore­cas ts , o u t l o o k s , p r e s e n t a t i o n s , r e v i e w s , a n d r e - r e v i e w s . W h e n s e r v i n g as a d i v i s i o n or g r o u p off icer, I h a n d l e i tems f r om headquar te rs m y s e l f o r w i t h s o m e d iscre te h e l p . I try to m i n i m i z e the o c c a s i o n s i n w h i c h b u r e a u c r a t i c r e q u i r e ­men ts a n d processes penet ra te the o r g a n i z a t i o n . S o m e t i m e s I ask m y s u b o r d i n a t e s fo r i n f o r m a t i o n , b u t I a l w a y s m a k e the reques t m y s e l f r a t he r t h a n p r e s e n t i n g it as a r e q u e s t f rom above , so they t h i nk of i t as pa r t of o u r bus i ness .

Y o u h a v e to d e c i d e w h a t to let t h r o u g h a n d w h a t not . In m o s t cases, the m a n a g e r s h o u l d be a bu f fe r . P e o p l e d o not n e e d to k n o w h o w m a n y t imes a co rpo ra te staff r e v i e w s a d i v i s i o n p res iden t . T h e y d o n e e d to k n o w that y o u h a v e a p l a n , that y o u h a v e a b u d g e t a p p r o v e d , a n d that y o u are ope ra t i ng aga ins t it.

4. Create an egalitarian atmosphere. P e o p l e w i l l fee l ves ted i n the o r g a n i z a t i o n i f e v e r y o n e p a r ­t ic ipates as equa l s o n s o m e f u n d a m e n t a l l e v e l . T h e y m u s t u n d e r s t a n d that the i r behav io r , the i r cost c o n t r o l , a n d the i r h a r d w o r k is c o n t r i b u t i n g d i rec t l y to the o r g a n i z a t i o n ' s suc ­cess. T h e y w i l l be m o r e w i l l i n g to b e h a v e c o n s t r u c t i v e l y , con t ro l costs, w o r k h a r d , a n d m a k e sacr i f ices if y o u d o the same. I never ask p e o p l e w h o w o r k for m e to d o a n y t h i n g I w o u l d not d o myse l f .

W h e n I gave p resen ta t ions to the b o a r d of d i rec to rs , I o f ten repea ted those p resen ta t i ons w i t h i n the c o m p a n y o r d i v i s i o n a n d s h o w e d m o s t of the same s l i des to m y s u b o r d i ­nates, so they w o u l d k n o w w h a t I w a s s a y i n g to m y bosses .

W h e n m y d i v i s i o n i n Texas h a d v i s i t o r s , w e d i d n o t send l i m o u s i n e s — i n s t e a d , o u r p e o p l e me t t h e m at the a i r ­por t . W h e n w e w a n t e d to en ter ta in v i s i t o r s , w e s e r v e d t h e m a Texas-s ty le ba rbecue on p a p e r p la tes . E v e r y o n e k n e w that w e c o u l d h a v e taken t h e m to a f ancy c l u b i n D a l l a s w i t h a w a l n u t - p a n e l e d r o o m a n d s e r v e d e x p e n s i v e f o o d o n f i ne c h i n a . Bu t the e m p l o y e e s felt m o r e ves ted i n the en te rp r i se if w e treated v i s i t o rs modes t l y . T h e y we re w i l l i n g to be f r u ­g a l because m a n a g e m e n t w a s f r u g a l . T h e v i s i t o r s d i d n o t m i n d ; they k n e w that a n y m o n e y w e spen t o n t h e m w o u l d even tua l l y s h o w u p i n the p r i ces of o u r p r o d u c t s .

G O I N G I N T O B U S I N E S S

I th ink the k e y to success i n bus i ness is i n t u i t i on . I n tu i t i on is

the ab i l i t y to assemb le d i s c o n n e c t e d or i n c o m p l e t e p ieces of a s i t ua t i on i n y o u r m i n d , cor re la te the s i t ua t i on w i t h s o m e ­t h i n g i n y o u r exper ience or y o u r m e m o r y , a n d see a s o l u t i o n or a s t ra tegy that o thers m i g h t not see. In bus i nes s , as i n s c i ­ence, i n t u i t i o n g u i d e s y o u to take steps that m i g h t not m a k e sense to s o m e o n e e lse i n i t i a l l y , b u t s o o n e r or l a te r p r o v e success fu l . I t rust m y i n t u i t i o n abso lu te ly .

If y o u are a s c i e n t i s t , y o u p r o b a b l y h a v e n o t r o u b l e accep t i ng the s ta tement that the des i re to d o sc ience has to c o m e ou t of y o u r genes. It 's e q u a l l y t rue that the des i re to d o bus iness has to c o m e ou t of y o u r genes.

I h a v e w o r k e d as a d i v i s i o n p r e s i d e n t i n la rge c o m p a ­n ies a n d as p r e s i d e n t of a p u b l i c c o m p a n y . I h a v e neve r h a d A c c o u n t i n g 101, n e v e r taken a b u s i n e s s cou rse of any k i n d . I l e a r n e d f i n a n c i a l m a n a g e m e n t o n the job. W h e n I w a s an e n g i n e e r i n g m a n a g e r , I w a t c h e d s o m e of t he v e r y bes t f i n a n c i a l p e o p l e g i v e p r e s e n t a t i o n s a n d l e a r n e d h o w they w e r e a n a l y z i n g i n f o r m a t i o n . I m i g h t h a v e b e e n bet ter off ge t t ing a n M . B . A . , b u t I d o u b t it.

In m a n y w a y s , b u s i n e s s is m u c h s i m p l e r t han sc ience. F o r e x a m p l e , to t u r n a r o u n d a b u s i n e s s that is l o s i n g m o n e y , y o u h a v e to d o two t h i n g s , w h i c h y o u c a n express i n f i ve w o r d s : sell more and spend less. Tha t p r i n c i p l e is no t nea r l y as c o m p l e x as the t heo ry of coheren t l igh t .

D o n ' t unde res t ima te the d i f f i cu l t y of m a k i n g money . It is hard to make money. It is h a r d to create a n e w t echno logy a n d d e v e l o p it i n to a n e w p r o d u c t . It is e v e n ha r de r to cre­ate a c o m p a n y a n d m a r k e t a n e w p r o d u c t . A l l these tasks take lots of h a r d w o r k .

O n the o t h e r h a n d , i t i s p e r f e c t l y p o s s i b l e to m a k e m o n e y , a n d there are a lo t of w a y s to d o it, a l l of w h i c h d e p e n d o n the i n d i v i d u a l , t he o p p o r t u n i t y , the t i m i n g , t he b u s i n e s s e n v i r o n m e n t , a n d the s ta te o f t e c h n o l o g y . W e h a v e the o p p o r t u n i t i e s of a f ree e n t e r p r i s e s y s t e m i n the e n v i r o n m e n t o f c a p i t a l i s m , w h i c h a l l o w s i n d i v i d u a l s a c h a n c e to se lec t a n y rou te t hey c h o o s e — a s a n e n t r e p r e ­n e u r , as a s a l a r i e d sc ien t i s t i n a n i n d u s t r i a l l a b o r a t o r y , as a t e c h n i c a l l y c o m p e t e n t b u s i n e s s e x e c u t i v e , o r m a n y o the r w a y s . F u r t h e r m o r e , m a k i n g m o n e y m e a n s d i f f e ren t t h i n g s to d i f f e ren t p e o p l e . If y o u go i n t o b u s i n e s s , c h o o s e a r o u t e c o n s i s t e n t w i t h y o u r n e e d s , y o u r t a l e n t s , a n d y o u r a s p i r a t i o n s . M o s t i m p o r t a n t , c h o o s e a r o u t e that y o u en joy .

R O B E R T J . P O T T E R provides business consulting to a variety of large and small corporations as well as indi­viduals, mostly on new product and technolo­gy issues. Currently, his primary consulting assignment is as vice president for business development of the Communications and Elec­tronics Industries Practice of EDS Manage­ment Consulting Services. Potter was elected an OSA Fellow in 1966 and was the first chairman of the OSA Technical Council in 1968. He lives in Irving, Texas.

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