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After a temporary absence we are back online with our newsletter. We hope you have
missed us and we will be a regular feature from now on.
A common question, across many of the businesses we work with, is:
"What is the best model to use to incorporate innovation or "R&D" into the business?"
"Should we employ or contract for resources?"
"If we employ whom would we get and how would we manage them?"
"If we contract how do we manage the relationship?"
"Do we have enough expertise to ensure we get the result we want?"
Many of the successful models that are written about do not fully fit the NZ
environment where businesses are typically small to medium in size, with limited or maybe
no experience in R&D and its management and a real wariness about the costs and risks of
R&D. These businesses may also have unforgiving markets; long and complex supply chains,
and a predominance of biologically based products with issues of variability and
perishability.
According to Drucker "The purpose of the business is to create a customer and, based on
this premise, the business enterprise has two and only two functions: marketing and
innovation."
Following this line of thought, there are then two key sources of knowledge in the
business-customer/market information and that generated by their own R&D. The business
will use its knowledge to convert customer demand into goods or services and look to
achieve competitive advantage by weaving the results of research and technology
development into the product. The ability to then protect the knowledge generated then
ensures a measure of exclusive and profitable longevity.
So what is the business model that best achieves this weaving of innovation into a
product?
There will be a variety of models," horses for courses", but our experience is that
there are two critical features:
Firstly: it is essential that R&D planning and investment is tightly
linked with business strategy. Many of the truly defining choices faced by businesses
are associated with R&D and those without a strong, visionary growth strategy will not
generate creativity from their R&D. and
Secondly: the person charged with managing and implementing
R&D/innovation must have influence and credibility at a senior level in the business. R&D
is typically the area where the levels of uncertainty and complexity are greatest and the
requirements for decision-making skills are most demanding. Those charged with this
responsibility must have the opportunity and ability to explain the ambiguity and
uncertainty to everyone from the Board down.
Referring to R&D as the "fuzzy front end" of the business former Polaroid Vice Chairman
Sheldon Buckler has said:
"The fuzzy front end is the source of all business value creation. By its
nature it is experimental, chaotic, and unpredictable. Making it work requires a high
tolerance for ambiguity and uncertainty, a willingness to consider the "unreasonable",
lots of individual activity and enjoyment of the quest itself"
Managing that "fuzzy front end" and the ambiguity and complexity is the challenge for
many businesses. We welcome your comments.
As we grow our business we are looking to identify people looking to become an
Associate with Catalyst R&D. The following attributes are what we are looking for:
- A research background in biological science or engineering,
- A track record of project design and management,
- Significant experience in the private sector, and
- Excellent listening and interpersonal skills.
If this may interest you please give us a call.
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