Uncertainty Management in Radical Innovation

Abstract

UNCERTAINTY MANAGEMENT IN RADICAL INNOVATIONMario Sergio Salerno (Poli/USP-PRO-LGI)The demand for BPE is associated with a broad research program on uncertainty management in radical innovation projects. It follows a research path based on previous projects and publications - Fapesp, CNPq and Finep projects, and papers in journals like Technovation, Int. J. of Production Economics, Production, Gestão&Produção, submissions to R&D Management, J. of Product Innovation Management, International Business Review, and Congress as EurOMA, POMS, IAMOT, Gerpisa, Enegep. Previous studies in radical innovation suggest a Brazilian specification in commodities: the development of radically innovative processes for commodities production, either by their vegetable origin (Braskem case), by biotech processes for 2nd and 3rd ethanol generation (Braerg), by specialty chemicals (Oxiteno) or oil (Petrobras and suppliers). Additionally, we include the development of technology-based new ventures based on incubators (Cietec-USP, Inova Unicamp) or not (Recepta Biopharma). The demand is for a short period (17/12/14 a 31/01/15) aiming at: a) deepening conceptual and methodological issues with RPI team; b) discussion of possibilities of joint projects; c) elaboration of a multi-institutional research program. There are three main research questions regarding uncertainty management in the firm and in the ecosystem, each one requiring specific methodology:a) Conceptualization and taxonomy of uncertainty in innovation, as well as analysis and proposition of a tool kit for uncertainty management. The unity of analysis is a firm's innovation project in its ecosystem. The analysis is based on innovation projects in development or already developed in order to capture the uncertainties they are involved into, according to the taxonomy of uncertainty based on literature review. It may involve the firm, partners, and external institutions. That is, field research must lead to understand how the firm manages internal and external uncertainties (in the ecosystem), including those generated by third parties. b) The rise of an innovation function in advanced companies. The methodology is that of organizational analysis: which mandate, structure, resources, kind of people, goals, deliveries already achieved by the innovation "area" in the company, aiming at understanding if is there the roots of a new function or not. c) Valuation of innovation project with high uncertainty. Methodological aspects (real option and others) and organizational aspects (which issues an alternative valuation seeks to solve: portfolio balancing? Fight for resources? Justification for resource allocation? Others?). In-depth case studies: Braerg, Braskem, Oxiteno and "Company A". Projects already chosen will be followed: definitions of technological routes, options network, probabilities of each option, the valuation itself, besides the investigation of why the company is interested in a new method, which organizational functions are involved in the decision of approving or not a project.The choice of Professor Gina O'Connor and RPI is not a random one. Prof. O'Connor leads the Radical Innovation Research Program that since 1985 is studying radical innovation longitudinally in companies, having produced high-quality papers. O'Connor's team is one of the best in the world. The period at RPI aims at consolidating a relationship already started with Prof. Gina O'Connor visiting period at Poli-PRO-LGI in August 2014.