How to create innovation with situational Research and Development

Research and Development process is s a central part of how companies generate revenue and how they get better over time. RnD is just thinking about how you can develop more ideas or more products and services that serve the needs of users or customers in a better and more fulfilling way. Research and Development is an essential part of New Product Development.

Research and Development includes two components. Research is a generation of visions, extending the knowledge of a particular company or firm, and exploring a fair bit. In Development, you’re thinking about how you can turn this knowledge into something usable that’s going to help out the users or the user experience. You’re going to produce some products and services based on that knowledge you got from the research.

The Research and Development process is all about the innovation funnel: turning raw ideas into usable products. To create innovation in the organization, you need to generate ideas, cultivate and collect them and implement the best of them.

Innovation should work for the users and no one knows users better than the Sales, Marketing, Business, or Analytics departments. When Innovation targets internal processes there’s no better expert than Operations.

There is a difference between teams employed in Research and Development as their everyday jobs and implementors run by the pattern. Innovation should be created daily in each part of the company.

Proper R&D is a repeated process with a whole bunch of different stages that are impractical for part-time innovators. The goal of this article is to propose a workflow to organize situational R&D for teams that are usually not involved in innovative processes.

First, there is a couple of problems with innovation I’d like to highlight.

External and Internal innovation

First of all, no matter what sector you’re in whether it’s business, academia, government, nonprofit, or whatever, most of the really smart people and most of the really good ideas are outside of your organization. It’s a principle known as Joy’s law of management and it may be the reason why these days there is so much chatter about the importance of external innovation.

Even the largest pharmaceutical company might have a thousand biologists internally, but there are more than a million Ph.D. biologists in the world. That is well under 1%.

At the same time, most bad ideas are also outside your organization and it can be pretty hard to tell the difference between the two. Companies rely on their internal experts to make sense of these external ideas to sort through all the muck and also to know how to marry them with their internal ideas and capabilities.

What drives RnD productivity is the success rate. RnD success is driven by just two things: it’s having access to great scientific information and then it’s listening to that innovation when you make decisions.

Once you have access to all the right sources of information you still have to listen to that information when you make decisions. It’s the crux of where the breakdown happens between external innovation and R&D productivity. As internal experts are personally motivated to develop their innovations and not bring external ones, it’s a must to incentivize collaboration with the outside world in such a way that it’s in the expert’s interest.

You have to give credit to your internal innovators regardless of where the idea originated: internally or externally.

Source: TED talk by Michael Ringel “External innovation basics from an R&D expert”

“Outside-the-box” thinking

Any type of thinking in a way is out of the box. What makes the difference is whether this box is an old one or a new one. There’s a built-in difference between finishing the following two sentences:

1. An example of a car is …
2. The car is an example of the …

In the first case, your creativity is limited: BMW, Audi, Ferrari, etc. In the second one – you can finish the sentence in many different ways: mobility, transportation, pollution, social status, etc. Creativity is unlimited.

Don’t limit thinkers to existing and well-known concepts to produce innovation. You can either start from a set of assumptions in a movement called deduction or change the way you look at things by induction. Mental models or, simply, boxes are what bricks are to buildings.

Philips is well-known for home appliances such as light bulbs, razors, and coffee machines. However, more than 30% of their sales and more than 60% of their profit came from a completely different area – medical devices.

Producing more cheaper, faster, better products are the same box. One day you need a new box, a completely new set of assumptions.

Marketing champagne isn’t about bottles, but about contributing to the success of parties.

Creativity is the heart of growth. To achieve great disruption and real creativity you have no choice but to induce new boxes.

Source: TED talk by Luc de Brabandere “Reinventing creative thinking”

Workflow

1. Define the problem and objectives: Clearly define the problem or challenge that needs to be addressed through situational R&D.

This step is critical for everything that follows because it determines the criteria for evaluating potential R&D projects and making decisions. Because this is also the most difficult step, it should be given high priority and undertaken with great care. A common error is to pay insufficient attention to this step, or even ignore it completely, and jump directly to the identification of possible solutions. Perhaps thinking up potential solutions gives one a sense that rapid progress is being made and appears to provide more scope for creativity, but making that error can have serious consequences.

Defining the problem begins with identifying the needs that generated it, such as the need to prevent hacker attacks or mitigate their impact, and describing the circumstances in which the problem exists. The analysis should then proceed to establish objectives that will later serve as criteria for evaluating potential solutions. It may be helpful to picture these objectives as a hierarchical tree, with an overall system goal at the root of the tree, midlevel objectives branching out from it, and quantifiable measures of performance as the leaves.

A final vital aspect of setting objectives is the establishment of criteria for prioritizing R&D outcomes. A huge variety of R&D projects can be imagined that would all be desirable and appropriate for the company if infinite resources were available. How should the company select from such a list? There are many possible criteria.

2. Identify the stakeholders: Identify the stakeholders who will be impacted by the research and involve them in the process. Involving owners and operators in the R&D process is essential to achieving their acceptance of its results and is therefore critical to the success of the strategy’s implementation step. Owners and operators can provide a critical, real-world perspective on the balance of costs and benefits, on issues involving human factors, on the dynamics of the industry, on how these factors may influence a technology’s acceptance, and on how new technologies can be managed successfully in the context of the existing infrastructure. All these considerations are important elements in defining R&D priorities and determining a concept’s potential for successful implementation.

One mechanism for involving owners and operators is to hold regular workshops, review panels, and other meetings.

Active outreach would have several side benefits. First, by creating a group of interested stakeholders out in the field, it would establish a pool of likely early adopters or beta-testers of new systems resulting from R&D. Second, building relationships with owners and operators would facilitate the provision of other security-related support, such as new equipment or training. Last but not least, building wider awareness and support could strengthen the argument for increasing the resources allocated to future R&D.

3. Conduct a literature review: Conduct a thorough literature review to identify existing research and best practices related to the problem. That’s the step where External innovation comes into play. If there’s a company or a study out there with a successful case for a particular technology or approach, you should probably evaluate it and see whether it can be applied to solve your problem.

4. Develop a research plan: Develop a research plan that outlines the research questions, methodology, data collection and analysis methods, and timeline.

5. Gather data: Collect data through surveys, interviews, focus groups, observations, or other methods. You can predict important metrics using existing company data. As you interact with the unknown there’s no better way to make decisions than using data.

6. Analyze data: Analyze the data collected to identify patterns, trends, and insights.

7. Identify solutions: Based on the analysis of the data, identify potential solutions or recommendations to address the problem.

8. Test solutions: Test the potential solutions or recommendations through pilot projects or experiments.

9. Evaluate results: Evaluate the results of the pilot projects or experiments to determine their effectiveness. In the evaluation step, each alternative should be formally measured against the objectives defined at the beginning of the process. The company must assess the impact each would have if it were successful and its results were implemented. Here again, impact means not only the impact on the revenue but also the broader impact on the system and society as a whole. For example, the evaluation in this step should include trade-offs such as the balance of security against cost and inconvenience. A sensitivity analysis should be included to identify how changes in assumptions would change the evaluation.

Go talk to the users and see if the user like what you’ve done and then they’ll have suggestions. If something isn’t accepted well enough, you just keep reiterating until the product gets better over time.

10. Implement solutions: Implement the most effective solution or recommendation and monitor its impact over time. Accomplishing this will require commitment by high-level management, incorporation of R&D results into ongoing programs, and user acceptance of the technologies and processes developed. Implementing the R&D results will present many challenges, including cost, potential delays in usual processes and procedures, security concerns, and the balance of perceived benefits and risks like disrupting ongoing activities. Some of these factors, particularly cost, and effectiveness, may be difficult to determine in advance—that is the nature of R&D—but objectives for them should be considered as carefully as possible, nonetheless.

Building a solid strategic basis is the most significant task at the early stage of R&D encouragement.