03 February 2011

Introduction of innovations: ordered to squeeze!

Innovation by order
Evgeniya Pishinnaya, Vedomosti, 02.02.2011
The article was published on the Nanonews website.

The Ministry of Economic Development has approved methodological materials for state-owned companies, state corporations and FSUEs explaining how to make innovative plans. The most prepared companies should submit them to the government by April 1, the laggards – by July 1.

On January 31, at a meeting of the modernization commission, President Dmitry Medvedev criticized state-owned companies that spend little on innovations and are not engaged in their implementation. He threatened the heads and representatives of the state on the boards of directors of companies that are not engaged in innovation with disciplinary responsibility, up to dismissal.

Out of 22 large state-owned companies and state corporations, nine submitted plans of acceptable quality, according to the materials of the Ministry of Economic Development: Rosatom, Rostechnologies, Rosneft, Transneft, Tactical Missile Armament, RAO Energy Systems of the East, FGC, Rushydro and Almaz-Antey. These were not plans, but concepts that were written "to the best of the consciousness" of management, their quality varies greatly, explains the official of the Ministry of Economic Development: only the materials of Rushydro and Almaz-Anteya can be called programs. Gazprom is among the laggards, he recalls. The draft program of innovative development of the company should be submitted to the Gazprom Board of Directors in July 2011, the representative of the holding comments: this is a decision of the board of directors, in which the majority are representatives of the state.

The main flaw of the concepts already presented is that general goals are formulated, and not specific results, according to the materials of the Ministry of Economic Development. There is no comparison with the best available technologies and products on the world market, there is no system of key performance indicators (KPIs) for innovative development for management, "breakthrough" and modernization projects are poorly structured, and programs of interaction with science and universities are not specified, lists other shortcomings of the Ministry of Economic Development.

Now officials have prepared a standard for an ideal program of innovative development.

Against passiveThe program should not be passive, according to the recommendations of the Ministry of Economic Development, companies really need to adjust their activities.

In order for managers to distinguish a good program from a bad one, the manual shows signs of "passive type innovation": the development of the cheapest technologies or products already used by competitors, the integration of programs of subsidiaries with minimal additions.

To prepare the program, you need to pass a technological audit. "This is innovative benchmarking, when the company's activities are compared with comparable companies abroad," explains Ernst & Young Innovation Advisor Yuri Ammosov (former Deputy Minister of Economic Development). To do this, you need to analyze three areas of activity, he says: the use of technology, the production of technological products and innovations in management. You need to compare yourself with at least three foreign leading companies, officials recommend.

Some Russian companies have already conducted such an audit, Ammosov knows, but most often selectively, not on all three indicators. According to him, a thorough technological audit can take from three months to six months.

KPI for innovationAfter the audit, at least five quantitative KPIs should be recorded in the program, dictated by employees of the Ministry of Economic Development: indicators of R&D financing, technological leadership, innovation efficiency, corporate governance effectiveness and interaction with external sources of development and innovation.

The main thing is that they coincide with the goals: the cost of production should decrease by more than 10%; energy efficiency and productivity should grow by 5% per year. The company should have a special deputy CEO who oversees innovations and receives remuneration depending on his KPI.

The company must provide a special budget for the development of the program, including technological audit, as indicated in the manual. What these costs may be, the Ministry of Economic Development did not consider, says an official of the department. But at the same time, companies will have to report to the government on their expenses: submit a summary table-a schedule for financing innovation activities, broken down by type of sources (borrowed, joint-stock, subsidies, etc.).

Little time is given to the preparation of a high-quality program, says the top manager of a large state-owned company: "But since such a goal has been set, we will fulfill everything on time." Now all companies will start a stormy activity on writing programs, the partner of FBK Igor Nikolaev is sure. Officials got carried away with the form, not the content, he believes: innovation is an argument in competition, if officials supported competition, no one would have to be forced to innovate.

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