CHRISTOPHER A. BARTLETT HEATHER BECKHAM
On June 5, 2006, Peter Vyas paced his office as he grappled with a request for $2 million to relaunch a mini water-oxidation product. Despite two failures to bring this product to market over the past three years, his team was confident this latest iteration was a winner. For Vyas, general manager of the Filtration Unit of Applied Research Technologies (ART), the request presented a major challenge. He recognized that his team had worked tirelessly to make this project a reality and strongly believed they were now headed in the right direction. But he also understood that the Filtration Unit’s track record of failure during this product’s ...view middle of the document...
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Due to the project's size, final approval would be made by Vyas’s boss, Cynthia Jackson—the newly appointed vice president of ART’s Water Management Division. Jackson was acutely aware of the mounting losses in the Filtration Unit, and she had already devoted a significant amount of time trying to get them back on track. She had confided to one of her colleagues:
Applied Research Technologies, Inc.: Global Innovation’s Challenges
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FEBRUARY 19, 2010
4168 | Applied Research Technologies, Inc.: Global Innovation’s Challenges
Applied Research Technologies, Inc.
ART was one of the technology world’s emerging giants. The company had grown through the merger and acquisition of numerous technology-based industrial companies, acquired in the LBO buyout waves of the 1980s and 1990s. By 2006, ART consisted of a portfolio of about 60 business units, each of which operated as a profit center. Total corporate revenue was $11 billion in 2006.1 Major divisions in the corporation included Healthcare (medical diagnostic equipment), Industrial Automation (robotics), Energy (extraction, conversion, and transportation solutions for the oil and gas industry—including the Water Management Division), and HVAC (Heating Ventilation and Air Conditioning, including climate control solutions for residential, commercial, and industrial markets). Exhibit 1 shows the organization structure of the company. The company’s success had been built on its innovative and entrepreneurial culture, coupled with a decentralized management philosophy. ART’s vision statement, proudly displayed in almost every office and cubicle, stated: “We aim to change the world through innovation, and to grow our place in it through entrepreneurship."
Culture and Practices
ART was dedicated to supporting innovation not only with funding (the company’s R&D spending was double the rate for U.S. industrial companies), but also in its practices, several of which were deeply embedded in the company's culture. ART encouraged employees to spend a half day each week “experimenting, brainstorming, and thinking outside the box.” It was a practice that the company’s visionary founder and current CEO, David Hall, referred to as “tinker time.” He explained the concept:
The company also moved quickly to bring products to market. If an idea showed promise, funding was usually available for...