How to Manage R&D Risks?

R&D is about building something new and delivering it in the future. The process is inherently uncertain, and hence involves risk. The more disruptive the technology, the more risk is likely to be introduced. The risk comes from several sources:

  1. Technology Uncertainties
  2. Integration Uncertainties
  3. Manufacturing Uncertainties
  4. Market Uncertainties

It is not possible to eliminate these risks, but it is definitely possible to manage them. An interesting case study can be found in The mysterious story of the battery startup that promised GM a 200-mile electric car

Image Source: Quartz.com

Image Source: Quartz.com

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How to measure R&D Effectiveness?

Metrics that measure effectiveness of ongoing R&D have been difficult to obtain. Four types of R&D metrics have traditionally been used: R&D Investments / Expenses Total R&D Headcount Total R&D Expense R&D Expense as % of Revenue R&D Expense increase/decrease from prior year R&D Expense compared with peers/industry average … Project execution status Performance relative toContinue Reading

Why Improve R&D Effectiveness?

Research & Development (R&D) is a critical component of most business strategies, and a driver for market success. However, executives typically have little visibility into the R&D pipeline or the value being generated in R&D. Overall, like any other corporate function, improved R&D effectiveness can have two potential impacts: Improve Revenues and/or Reduce Costs. LetContinue Reading