The document outlines a 4-phase model for developing knowledge-intensive organizations globally: 1) Learner phase focuses on establishing an experienced core team, 2) Supporter phase increases local hiring while retaining core team, 3) Contributor phase hands over responsibility to local team, and 4) Business Owner phase establishes local leadership and operational accountability. Key aspects include balancing global costs, skills, and risks while transferring tacit knowledge through expatriate assignments and competence development.

1. Development Model for Knowledge Intensive
Organizations for Global Product Development
Jouni Pirhonen
jouni.pirhonen@gmail.com
Jouni.pirhonen@gmail.com

2. Balancing global cost structure
 Strategic mixture of experience, skill and cost bases
Long-term competitive advantage
 Complements current global R&D operation
 Balancing region/country related risks
Availability of skilled professionals
 Balancing global resource pool in multi-site development
Customer and Market Proximity
 R&D serving important customers or geographic market
jouni.pirhonen@gmail.com

3. Phase 1 Phase 2 Phase 3 Phase 4
Learner Supporter Contributor Business Owner
Characteristics: Characteristics: Characteristics: Characteristics:
• High burn-rate • Depended on technology • Adds economical value • Fully capable for system
• Projects subordinated to capability of the HQ • New global and local design and development
“global” programs organization. development projects • Contributes to company
• Expats staff in key roles • More project transfers • R&D Ownership culture
• HQ team has technology • Increasing technical • Global customer support • Business ownership
responsibility capability • Most positions localized • Global management
• “Resource pool mode” positions
Key activities: Key activities: Key activities:
• Set-up the Core team • First own R&D projects • Responsibility hand-over Key activities:
• Recruit QUALITY • Hiring focus in balancing • Leads global projects • Establish business
• Transfer and rotate skills and resource pool. • Retain the key staff leadership positions
expats technical experts • Typically several transfer • Innovations, IPRs • Ensure global focus of the
• Establish support functions projects simultaneously • Redeployment of HQ R&D local leadership team
• Maintain diversity
Drive to phase 3 as fast as possible; Responsibility Phase 4: Global
Transform to value-adding global contributor. HAND-OVER business owner;
more than R&D
jouni.pirhonen@gmail.com 12-24 months

4. Phase 1 Phase 2 Phase 3 Phase 4
Learner Supporter Contributor Business Owner
1st year 1-3 years Long-term
Establish the Core: Ramp-up the Pool: Grow and sustain:
Build experienced core team for Increase ratio of fresh engineers; Building skills and experience.
rapid competence transfer balancing for cost efficiency. Planned replacements.
Productivity starts improving
Established core team ensures Product quality and productivity
after core team is established.
that productivity improves, even improves, because organization
Quality of deliverables is still
hiring focus moves to less has both experience and
responsibility of the HQ
experienced candidates. resources.
organization and expats.
Core team Balanced growth Solid organization
guarantees ensures improving guarantees
successful ramp-up productivity predictable quality
jouni.pirhonen@gmail.com

5. Establish the core
Recruitment focus in acquiring experience for rapid competence capture
1st
year On-boarding run in project mode; indoctrination into company culture and values
Team of expatriate on site; needed for experience sharing and tacit knowledge transfer
Ramp-up the pool
1-3 Recruitment focus in building the resource pool; maintain competence threshold
years Prepare the organization plan and compensation strategy for long-term operation
Retain the core team ; rotate new expatriates for complementing the skill set
Grow and sustain
Ramp-down expatriate team. Retain diversity; important for successful global operation
Long-
term Assume more global responsibility and operational accountability
Retain the experienced core staff to maintain productivity and quality
jouni.pirhonen@gmail.com

6. Tacit knowledge, experience, learnt by working
together
◦ Methods: Expats, short-term transfers, business trips, on-
job training, coaching
◦ Undocumented technology, process and product
knowledge, cumulated in the organization, held by the
experts.
◦ Extremely important, when existing project is transferred
Explicit knowledge, based on documents, training:
◦ Methods: Trainings, documents, self-learning, learning-
by-doing
◦ Documented processes, technical information, standards.
◦ Professional technology and process publications.
◦ Product documents, blueprints, schemas, project plans.
jouni.pirhonen@gmail.com

7.  Experience transfer requires expatriates and STTs:
◦ Managers, technical experts, product experts, culture agents
◦ Works both ways: Send expats to work at “HQ” R&D
◦ Rotate technology experts; this helps in tacit knowledge
sharing
 Expat focus:
◦ 0 -12 months; main focus in rapid competence transfer
◦ 12-24 months: focus shifting to responsibility transfer
◦ 24-36 months: responsibility hand-over
 Expat requirement:
◦ Pedagogical skills, Coaching, Technology know-
how, Leadership, Communication, Company culture and
values, Common sense
jouni.pirhonen@gmail.com

8. This document presents a simplified model for the
evolution of the developing R&D site.
Technology transfer program may include several
work streams like laboratories, development
tools, production, IT infrastructure etc.
It is important to define the desired role for each R&D
site based on the global R&D strategy.
Ramp-up and responsibility transfer starts a chain of
changes in the R&D site. It is important to have
serious change leadership skills available.
jouni.pirhonen@gmail.com