The last of the five keys to innovation is leveraging your R&D resources. We have discussed how developing platforms and organizing for speed will help accelerate product development and improving your innovation capability. To take advantage of these tactics, you must keep your R&D teams focused on value creating activities. How many times have you seen an organization pull their R&D resources to “fight fires” or perform some other type of product support? While the R&D staff is working on other activities, delays occur in the product development projects and time to market suffers. To make this worse, most R&D organizations are inherently understaffed. The key to producing great new products is to keep your highly specialized R&D staff doing what they do best; innovation and product development. According to the PRTM study, the top performers in the electronics industry allocate over 70% of their R&D staff to value-creating or revenue generating activities1.
In any organization there must be a mix of product development project types. These include platform development, product development, product enhancements or line extensions, business development, and maintenance. In the pie chart below is an example portfolio.
There is no ideal percentage allocation for each type of project. With that said, it is prudent to allocate some time in your project plans for those situations when some of your R&D team members will be pulled to assist in a mission critical problem. That’s business, so plan ahead. Remember that the leading companies allocate over 70% on the three main activities; platform development, product development, and product enhancements.
Other ways to leverage your R&D team is to keep the organization as flat as possible. Since multifunctional teams are the keys to being organized for speed, having a lot of structure or too many organizational levels will hamper the R&D efforts.
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1) Cashing In on Innovation, Lessons on managing product development for greater profitability and growth, by Huw Andrews and Jim Takach, PRTM Insights, Third Quarter 2007.
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