Capturing the Real Value of Innovation Tools

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Advanced tools like computer simulations can significantly increase developers’ problem-solving capacity as well as their productivity, enabling them to address categories of problems that would otherwise be impossible to tackle. This is particularly true in the pharmaceutical, aerospace, semiconductor and automotive industries, among others. Furthermore, state-of-the-art tools can enhance the communication and interaction among communities of developers, even those who are “distributed” in time and space. In short, new development tools (particularly those that exploit information technology) hold the promise of being faster, better and cheaper, which is why companies like Intel and BMW have made substantial investments in these technologies.

But that enthusiasm should be tempered: New tools must first be integrated into a system that’s already in place. It is important to remember that tools are embedded both within the organizations that deploy them and within the tasks the tools themselves are dedicated to performing. Moreover, each organization’s approach to how people, processes and tools are integrated is unique — a result of formal and informal routines, culture and habits. All too often, companies spend millions of dollars on tools that fail to deliver on their promise, and the culprit is typically not the technology itself but the use of the technology. When new tools are incorrectly integrated into an organization (or not integrated at all), they can actually inhibit performance, increase costs and cause innovation to founder. To avoid this, companies should beware three common pitfalls: (1) using new tools merely as substitutes, (2) adding — instead of minimizing — organizational interfaces and (3) changing tools but not people’s behavior.

Stefan H. Thomke is professor of technology and operations management at Harvard Business School, Harvard University, and author of Experimentation Matters (Harvard Business School Press, 2003) and Managing Product and Service Development (McGraw-Hill Irwin, in press). Contact him at sthomke@hbs.edu.

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