“’The moonshot factory is a messy place,’” and not everything that is dreamed becomes reality,” Danielle Muoio, reporter for Business Insider quoting Astro Teller, director of Google X.
About the Guide:
Discovering a breakthrough product makes for transformational innovation; a novel concept can disrupt an industry in one fell swoop and catapult a firm to market leadership. It is the dream of innovators.
Frustratingly, transformational innovation is also elusive. According to Jay Terwilliger, writer for Creative Realities, Inc., an innovation consulting firm, “transformational innovation is exceedingly rare. Think about it: how many truly new-to-the-world ideas happen in a year? In a lifetime? Not many!”
The scarcity of breakthroughs is largely because few occur organically. Breakthroughs occur with hard work, focus, and often long-term effort to explore a vision, solve a problem, or tweak an existing prototype, and that’s all before the product is successfully brought to market. So, what is it that keeps firms investing heavily in R&D and pursuing ever-distant, world-changing concepts?
Perhaps the more realistic purpose of R&D investment is to sustain a competitive market position in an environment where advances are coming thick and fast. R&D investment builds the moats, through IP and operational efficiencies, that can secure a firm’s future amidst the seemingly infinite barrage of competition from corporates and startups alike. That is what R&D means to firms and why it is so important to them. Fall behind and fall out of the market.
Research and development (R&D) has existed since the first corporation. Defined by Investopedia as “the investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedure.”
Some of the world’s most recognizable innovations are products of R&D labs. In the past, AT&T’s Bell Labs gave us the transistor and the cellular telephone. Today, we see R&D products in the form of Amazon Echo, Google’s autonomous car unit, and digital health wearables that measure heart vitals, temperature, and can track when someone falls. The breakthroughs are irrefutable — but what is less difficult to quantify, is how best to pursue R&D. What strategies work? How much should a firm invest in R&D? What factors lead to breakthroughs or transformation innovation?
The following two articles attempt to answer the questions that today’s CEOs and entrepreneurs have concerning the value of R&D, best practices to follow, and how to develop a focused plan that builds creativity and an R&D portfolio while technology is rapidly advancing around them.
These articles look at the ways that market leaders are conducting R&D, examine case studies, and suggest actions for today’s forward-thinking firms.
Learning from R&D Leaders
Examples from Google and Amazon
This article delves deeper into the question of why R&D is so important for companies despite a lack of evidence of its value and the difficulties in measuring the potential impact of R&D activities. This content will help firms improve their R&D function by looking at leading tech innovators and their practices.
Metrics and Best Practices for R&D Optimization
This article suggests how CEOs and businesses can develop an R&D strategy that straddles the need for long-term investment and growth with governance, financial, and competitive pressures. It summarizes some best practices followed by innovation leaders.