The Merits Of Being Big

(Image credit: Dow)

We’ve been conditioned to equate tech innovation with images of lone inventors or startups housed in garages or incubators, not a company with 53,000 people spread across 17 businesses in 35 countries and a 118-year history.

Yet the latter are resources that enable Dow to innovate competitive advantage. How it does it is a contrarian argument on the merits of being big.

“We always want to be budget rather than idea constrained.”

The bulk of Dow’s researchers are in its business units, which keeps them closer to customers and markets, according to Florian Schattenmann, VP, Core R&D at Dow (which houses only 15% of the company’s research staff).

“We leverage and support their work, and when you’re the second largest chemical company in the world, that can be a huge advantage.”

There are four broad areas in which Schattenmann and his team make that difference possible:

First, it speeds innovation projects via experimental and analytic support. “In the old days, it could take months or years to run and work up reactions, analyze them, and then repeat the cycle over and over until we had a reliable outcome,” Schattenmann explained. “Now, we have high-throughput testing that uses robots to do a hundred reactions at a time, and then simultaneously analyze the results. These proprietary capabilities aren’t available in the outside marketplace at this scale.”

Second, it optimizes innovation processes, by sharing testing results, technologies and methodologies across businesses.

“A molecule or compound from one application can work in another, so we not only prevent businesses from reinventing the wheel, but help them further accelerate their research.”

Schattenmann also noted as an example the expertise on his team in solids handling, which can be translated into process solutions irrespective of the differences between business units.

Third, it’s a force-multiplier for innovation, as Schattenmann’s team is always on the lookout for what they call “platform ideas” that give its businesses unique development opportunities and, when it’s to their strategic advantage, patents. “We have a playbook in which each R&D project gets a page, and goals for intellectual property development are listed,” according to Schattenmann. “Also, in addition to often conducting IP analyses early on in processes, we manage a central database of research reports and technical information.”

Fourth, it keeps an eye on the developmental horizon just beyond the purview of the business units. “Our group is organized differently than business R&D, as we’re structured by skill set.” Schattenmann explained. “We have a limited, but dedicated budget for longer-term research, which is far more effective for us than hosting public open innovation sessions, which have limited value for us.” The group also serves as a landing spot for recent grads, who are attracted to its science, and then move into the business units.

“When you look at our public reporting segments, we’re really a collection of integrated materials businesses,” Schattenmann concluded. “So imagine a long list of highly successful companies operating in different markets that share insights and capabilities. Our R&D approach is often that glue that translates across markets, to the benefit of every business.”

“There’s no way there’d be such collaboration on innovation if we weren’t all Dow.”

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