Building a Creative High-Performance R&D Culture: Customer Insight, Risk Tolerance, Entrepreneurship, Alignment, Technology Excellence, Innovation, Creative Collaboration, and Execution Are the Building Blocks

By Newman, Jerry L. | Research-Technology Management, September-October 2009 | Go to article overview

Building a Creative High-Performance R&D Culture: Customer Insight, Risk Tolerance, Entrepreneurship, Alignment, Technology Excellence, Innovation, Creative Collaboration, and Execution Are the Building Blocks


Newman, Jerry L., Research-Technology Management


Innovation has nothing to do with how many R&D dollars you have...... it's not about money. It's about the people you have, how you're led, and how much you get it.--Steve Jobs

R&D culture can be the engine for sustained product innovation--a key driver of continual growth in many successful corporations. Today there is a general imperative to generate growth through innovation (1,2). This is evident from all the organizations, conferences, consultants and books focused on the subject (1,3,4). Even with these resources, however, many organizations still struggle to generate consistent results in new product development (NPD). Finding and implementing new opportunities is difficult and complex, yet, some organizations excel not just once, but on an on-going basis.

Because innovation means many different things to people, any in-depth discussion of the topic requires a definition of the term. In this case, discussion will be limited to product innovation, which is defined as commercializing products that produce customer and shareholder value through differentiated technology that is strategically aligned with the business. This product innovation model is illustrated in Figure 1.

Customer insight, business alignment, technology, and execution are at the core of building an effective innovation initiative. The R&D culture of innovation excellence is built on these elements plus risk tolerance and creative collaboration (virtual organizations). These elements form the acronym CREATIVE: Customer-focused, Risk-tolerant, Entrepreneurial, Aligned with strategy, Technology and scientific excellence, Innovative, Virtual organizations (or creative collaboration), Execution (or Excellence in project management) (5).

Many R&D organizations have excelled by successfully focusing on single factors, such as creativity, execution or customer focus. The CREATIVE R&D culture framework depicted in Figure 2 (6) has been originated and utilized by the author at various levels of R&D management in multiple industries. The application of this framework has generated sustained innovation, resulting most recently in significant and sustained improvement in new product sales over a five-year period. What follows is a detailed explanation of each CREATIVE element and tips for how to implement the holistic framework.

Customer Focus

We can believe that we know where the world should go. But unless we're in touch with our customers, our model of the world can diverge from reality.--Steve Ballmer

When R&D team members overcome isolation from customers and consumers they can gain profound insight into how their technologies can be incorporated into new products that bring value to customers. Without true customer insight, an invention is just that--an invention, not an innovation. There are many examples of outstanding technologies that failed in the marketplace, and of products that failed to even reach the marketplace, due to poor relevance to customer needs. Traditional R&D management and organizations have tended to seclude R&D professionals away from customers and have often been reluctant to push for customer contact. However, unless they are encouraged to see through the eyes of customers and end-users, R&D professionals are often unable to see practical applications for their technologies (7).

[FIGURE 1 OMITTED]

If the customer insight side of the innovation equation is ignored in favor of the R&D organization's excitement over a new technology, the department can end up with "a technology in search of a market." This occurs when R&D professionals "fall in love with" technologies for their own sake, as opposed to creating and developing technologies to meet customer needs. This can lead to a perception that the R&D organization is out of touch with the customers and the business needs of the organization.

R&D professionals should avoid the "build it and they will come" attitude. …

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