![\"InnovationCommittee\"](\"http:\/\/www.sdaconseil.com\/blog\/wp-content\/uploads\/2013\/06\/InnovationCommittee.png\")
<\/a><\/p>\n<\/p>\n
What should innovation committees do?<\/b><\/p>\n
Innovation committees basically play four roles:<\/p>\n
- \n
- Choose good projects<\/li>\n
- Craft a portfolio for the future<\/li>\n
- Shape up R&D<\/li>\n
- Build a fluid innovation process<\/li>\n<\/ol>\n
These four levels of competence actually \u00a0build over time and ultimately embed into each other.\u00a0 Yet there is an approximate sequence to them.\u00a0 For instance, it is preferable to become competent in craftily choosing best projects before building an expensive portfolio of risky ventures. This might appear obvious, but there are plenty of common pitfalls for the unaware in this first step.<\/p>\n
In the same line, a look at how to build a portfolio for the future comes before answering the question of how best to manage the R&D department, because we need to know about the outlook of markets and who will be our future customers before we set R&D priorities. \u00a0The future is about making choices on markets, edge technologies, and competitive advantages, which in turn all influence the innovation drive and R&D priorities. \u00a0The last stage is about building a robust innovation process within the organisation. The aim at this point is to ensure a steady flow of good ideas given the expected attrition rate of projects in execution, by tweaking the organisation.\u00a0 This is hard work, but the payoff is immediate.<\/p>\n
1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/b>CHOOSING PROJECTS<\/b><\/p>\n
Choosing projects sounds simple, but then an awful lot of companies end up working on the wrong projects.\u00a0 When we informally surveyed over 20 R&D tax credit experts and asked what % of their clients\u2019 audited projects were really connected to the market needs, typical answers hit the 20 to 30% range, only. No one has ever given us an answer above 50%.\u00a0 Now that leaves us with a very conservative estimate of 25-50% of projects that should either be reviewed, modified, stopped or redeployed.\u00a0\u00a0 We somehow highly suspect in this present case, that an informal survey does turn out to be more informative than a formal one. But it would be great to hear your comments on this topic.<\/p>\n
By all means several explanations usually account for the lack of correlation between the R&D effort and commercial success, but we will highlight three frequent ones:<\/p>\n
- \n
- Sometimes the original idea came from a creative mind, most likely unconnected to the market place.\u00a0 The owner of the idea quickly comes to cherish his pet project\u00a0 and somehow the idea never gets really tested in the market with real customers. The project usually ends as a technical object, that is the product that fails to sell. \u00a0By the way, this illusion often happens to vice-presidents of large companies entrenched in their offices.<\/li>\n
- The project evaluation relies on a set of rigid and predefined questions.\u00a0 Thus the risk-benefit analysis is generally poorly estimated as benefits get inflated and critical risks remain hidden. Most of the time the big risks lurk into the areas that are left unquestioned or unexplored.\u00a0 Finding the right questions is<\/i> the challenge.\u00a0 As a result many projects manage to dodge hard questioning and escape from dissenting voices.<\/li>\n
- R&D effort usually\u00a0focuses on product features and performance. In the last 20 years\u00a0customers have increasingly\u00a0required a bundle of products and<\/em> services.\u00a0\u00a0Now they\u00a0request\u00a0a rich\u00a0experience to be included as well in the bundle.\u00a0\u00a0Service and experience often fall off the checklist in choosing projects and are\u00a0way down in\u00a0the list of R&D priorities.<\/li>\n<\/ul>\n
2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/b>CRAFTING A PORTFOLIO OF PROJECTS<\/b><\/p>\n
A balanced portfolio looks into three horizons:<\/p>\n
- \n
- Short term projects that build around the current business.\u00a0 They are often continuous improvement projects that will affect the bottom line within the next 12-24 months.\u00a0 Technical expertise and project management skills are commonly at hands.<\/li>\n
- Medium term projects represent new business development initiatives, lying in the periphery of the existing business areas, such as new products and services. \u00a0Risk is a little higher, but the odds of developing the top line within 2-4 years look good.<\/li>\n
- Third are technology projects that are the seeds of future business development.\u00a0 They have higher risk-pay off ratios and are managed with different criteria and different sorts of scientific managers.<\/li>\n<\/ol>\n
Building the portfolio is one thing, but monitoring it brings another set of issues:\u00a0 persistent mistakes.\u00a0 Human nature comes out of the shadows when a project skids off.\u00a0 The hardest decision for a committee is to decide what to do with a project that is failing.\u00a0 Knowing<\/i> when a project has failed<\/i>, battles against a host of personal issues, emotions and intents.\u00a0 Stopping and redeploying goes against the grain of vested interests, even if it is the right thing to do.<\/p>\n
Who should sit on the innovation process?\u00a0 Experience and vision count on those committees. After all we are talking about crafting the future of the organisation.\u00a0 We need people with good market knowledge, technology wisdom and a capacity to envision the future.\u00a0\u00a0 Yet the common 30:30 rule also adds perspective:\u00a0 30% of membership should be under 30. \u00a0After all they are the future!<\/p>\n
3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/b>MANAGING THE R&D DEPARTMENT<\/b><\/p>\n
R&D heads are under pressure. R&D budgets have more than doubled worldwide, but R&D productivity has lagged across the board.\u00a0 No wonder Asia has collected a score of multinational R&D centers: When it is hard to predict R&D output, betting on costs that are a third of industrialised nations is an amazing productivity hedge.\u00a0 You can either triple the number of engineers for the same budget, or cut your R&D budget by at least 50%.\u00a0 Locals make the same calculations: the Beijing Genomics Institute has 4000 personnel doing research!<\/p>\n
Oddly R&D departments often run sub-cultures inside their organisations.\u00a0 This is the terrain of project management and project protection.\u00a0 At the end of the day, the interesting question to ask is about what happens inside R&D when a project fails?\u00a0 If the project is a play on the board of snakes and ladders, failure rings like a significant stigma in the slippery game of project politics. There is a different culture when R&D projects are expected to make mistakes in the right directions and space is created to take on failures as learning experiences.\u00a0 These projects usually win the races. This small cultural difference carries\u00a0 huge implications.<\/p>\n
As a matter of fact the role of the Chief Technology Officer is steadily shifting from a traditional gatekeeper of a project department to that of the guardian of the company\u2019s technology edge in the marketplace.\u00a0 Not all R&D heads can make the switch.\u00a0 The new CTO mindset must deal with two considerations:\u00a0 1. how to tightly line up R&D with the prevailing commercial realities, \u00a0and 2. to assess how openly should the organisation play with potential partners to keep the ‘edge’ technology out there and to accelerate from lab to market (open innovation).<\/p>\n
4.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/b>BUILDING THE INNOVATION COMPETENCE <\/b><\/p>\n
Clients are moving targets, and market segments appear and disappear fast.\u00a0 Today innovation ought to be an integral part of any commercial strategies.\u00a0\u00a0 As Peter Drucker said:\u00a0 \u2018Marketing and innovation are the only two essential functions of a company\u2019.\u00a0\u00a0 Building a competence in innovation requires three parts:\u00a0 1.Insights & tools , 2. Process, 3. Culture.\u00a0 Insights are about the best \u2018how to innovate\u2019 tools to do the right things. Without knowing the \u2018how to innovate\u2019 part, it is hard to design an effective innovation process internally.\u00a0 Process is the series of steps you are going to adopt and put into place to make innovation happen within your walls.<\/p>\n
Culture is about setting the right incentives and conditions to make your innovation process work. It is about nurturing innovation to the point where client focus is part and parcel of the company culture<\/i>.\u00a0 It is about removing blockages that impede the flow of ideas. It is about balancing the pressures of cost cutting and productivity, with the organisational slack demanded to transform great ideas into promising projects.\u00a0 It is about reinstating the passion into work.<\/p>\n
And at the end of the day it is about creating turbulence for your competitors.<\/p>\n
<\/p>\n
Andr\u00e9 Du Sault, MBA (LBS), MPA (Harvard)<\/p>\n
DS&H develops practical innovation tools since 2008.\u00a0 We \u00a0have trained more than 250 executives on the best innovation practices.<\/p>\n
Previous blogs:<\/p>\n
Innovation Step 1: \u00a0The suggestion box: a bag of gold nuggets or crackerjacks?<\/p>\n
Innovation Step 2: \u00a0From a hunch to a blueprint: How to improve a good idea that will rally organizational support<\/p>\n","protected":false},"excerpt":{"rendered":"
CHOOSING PROJECTS, CRAFTING A PORTFOLIO, BUILDING THE FUTURE In step 3 we assume there is a steady arrival of promising projects already in place.\u00a0 The established client relationship allows the identification of good ideas and the internal environment is built to allow sufficient Snowballing effort to transform great ideas into attractive projects. Now the ball […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,6,7],"tags":[],"_links":{"self":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/352"}],"collection":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=352"}],"version-history":[{"count":6,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/352\/revisions"}],"predecessor-version":[{"id":358,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/352\/revisions\/358"}],"wp:attachment":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- R&D effort usually\u00a0focuses on product features and performance. In the last 20 years\u00a0customers have increasingly\u00a0required a bundle of products and<\/em> services.\u00a0\u00a0Now they\u00a0request\u00a0a rich\u00a0experience to be included as well in the bundle.\u00a0\u00a0Service and experience often fall off the checklist in choosing projects and are\u00a0way down in\u00a0the list of R&D priorities.<\/li>\n<\/ul>\n