Posts Tagged ‘R&D’

Measuring the ROI of R&D is illusory, but shortcutting Prototyping & Scaling-up will destroy it

Return On Investment of Innovation What is the Return On Investment (ROI) of R&D? The question regularly resurfaces but never seems to get a satisfactory answer. Here are two insights, one which explains why we cannot get a proper answer, the other what we can do to avoid destroying the ROI.

Insight 1. Samsung’s rule of thumb for R&D investment is: when spending $1 on R&D, they spend $4 on prototyping & scaling-up. Since all that follows R&D is necessary for the output of R&D to get to market and start generating a return, it becomes clear that the $1 investment in R&D has to be seen in combination with the $4 investment in ‘the rest’. So, calculating a return on the $1+$4 investment makes sense, but calculating a return purely on the $1 investment doesn’t.
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Bose: Passion Driven Innovation

A few years ago when I was living in France, my elder brother visited me. We both walked down to the small city centre in hope of finding a home theatre system for me. Back then, I was a novice to the audio world with very limited knowledge on available systems, whilst my brother had years of experience of assembling speakers, woofers, sub-woofers and amplifiers on his own to achieve the best sound effect and quality.

We entered a store that sold several systems. My eyes were immediately caught by popular brand names such as Sony and Yamaha, particularly with the display of large multi-component systems. The intricacies intrigued me and were compelling evidence for what I perceived to be high quality.

While I kept myself busy with the popular and catchy systems, I realized my brother was stationed in a corner looking at what appeared to be a black box akin a computer CPU.

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Companies have stuck to their R+D spend, but what about innovation?

February 7, 2010 Leave a comment

Booz & Company’s annual study of the world’s biggest corporate R&D spenders finds that most have kept or slightly increased their R&D spending as a % of sales throughout the recession. Qualitatively, interviews have confirmed that, by sticking to their R&D, managers expect their companies will outpace their weaker rivals on innovation and emerge from the downturn with a stronger competitive advantage. So far so good… Read more…

Connect and Develop: how Procter and Gamble stepped up observing, associating, implementing

February 1, 2010 Leave a comment

Setting a co-creation and co-development mindset is increasingly a critical success factor for innovation. It impacts the entire innovation process by taking to the next level steps such as Observing, Associating, Rapid Prototyping, and overall reducing time-to-market. Read more…