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Bringing a Business Mindset to R&D
Posted on March 10th, 2017 by Christina Valimaki in Chemical R&D
Chemical R&D is under heavy pressure to show business results these days. Often viewed more as a “wish list” item that just isn’t providing big money results, exploratory research is getting sidelined in order to put money into projects that will provide short-term gains. Those projects might include making slight changes to existing products, or pitching those existing products to new markets. But that strategy is leaving foundational innovation out in the cold.
Meanwhile, China is looking to focus more on exploratory research, so some major competition could soon be on the way. There are also big societal problems that chemical R&D should be putting its might towards, like overcoming food shortages, providing clean water and creating recyclable materials. In other words, short-term thinking could cost businesses big in the long run if they ignore the importance of innovation.
The problem facing R&D heads, then, is: How do we convince business executives to invest in chemical R&D amidst financial pressures? How do we prove to them that it is worthwhile?
To make the case, it is vital to start running R&D more like a business. That means R&D heads must:
- Make strategic innovation investments – Diversify your R&D portfolio by allocating most of the budget to projects with a high chance of success, some for more uncertain projects and a small amount for high-risk.
- Track and report on results internally – Understand the R&D portfolio in financial terms so that you can communicate effectively with executives about data, costs and projections.
- Track and report on results externally – Look and demographics and economic dynamics and find problems that need to be solved. Ask what is the need, and what can we create to fill it?
Read the full article to learn more about how to run chemical R&D like a business.
All opinions shared in this post are the author’s own.
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