This is the second part of a series of blog entries around common situations in R&D.

This time we will have a deeper look into the drivers of development time and how to steer them.

Part 2: Why time does matter…

Time is money and of course short development times lead to short commercialisation times and thus earlier revenue on a new product. A continuously updated product portfolio is also generating new news with the customer and displays a company’s ability to innovate in the market. In fact especially well-established brands need recurring new news in order to stay relevant in the market.

As desirable as short development times aka shorter time to market are, products need to fulfil the expectations of customers and eventually consumers. This has to be met while complying with the relevant legal and regulatory requirements as well as meeting the profitability targets set forth by the organisation.

Let’s have a look into the major drivers and see, where there are possibilities to optimise development times.

The drivers of development

Driver	Impact	Degree of influence
Laws of nature	Product stability, technical performance	None
Legal and regulatory requirements	Product safety regulations, chemical legislation, food regulations	Low
Market requirements	Consumer pains & gains, competitor behaviour	Medium
Business requirements	Turnover and profit targets of your company	High
Operational requirements	Processes, operational footprint, organisation	Very High

The table above shows the major drivers, their impact and the degree of influence you have on them.

How to deal with: The Laws of Nature

Actually there is not a lot you can do about the laws of nature, especially thermodynamics. Changing them has been widely unsuccessful and bending them comes at great cost – rocket science anyone?

Therefore it is of utmost importance that the required stability and performance parameters are defined as precisely as possible upfront before the experimental product development begins.

Especially stability testing is time and resource consuming and are often on the critical path. Given some flexibility in the product life time can significantly reduce stability testing and thus speed up time to market.

If it is within the culture of the organisation, a knowledge-based risk assessment may be used to take go-ahead decisions during stability testing based on intermediate readings.

 

How to deal with: Legal and regulatory requirements 

New products need to comply with all relevant legal and regulatory. An non-compliant product will not stay on the market for long, as it will be called out by competition or NGOs and pulled from the market by the authorities. Fines hit the P&L and recalls hurt reputation.

Therefore we strongly recommend to adhere to legal and regulatory requirements – risk assessments are not advisable for this driver.

 

How to deal with: Market requirements

No matter whether you are developing products for B2B or B2C, any new product needs to fulfil the expectations of the consumer. These are best described as pains and gains as it helps formulate a logic/reason to be for the product. the better you know your market and the consumer, the better you will be able to describe the pains/gains and ultimately develop the next big selling product.

In this context a through market research and access to market data helps tremendously cut development time.

Now you might say, that the table above shows a “medium” degree of influence for this driver. Can’t we leverage this influence to our benefit. Well, that is correct and it is being done with companies with big marketing budget that are willing to dedicate significant resources for several years in order to chnage the market – i. e. to educate the consumer. I leave it up to you to decide whether you are working in such an organisation.

 

How to deal with: Business requirements

It may sound old fashioned, but successful companies have a clear view on their current sales and profitability and an even clearer understanding of their desired sales and profitability. Surprisingly this knowledge is sometimes owned by controlling and marketing and not widely communicated in the organisation.

We are huge proponents to define a turnover and profitability goal every new product and to clearly communicate it to R&D. This will enable R&D to balance product costs and to do their part in profitability.

 

How to deal with: Operational requirements

Every organisation need standardised processes to function reliably. If you realise that the time it takes to complete a certain process becomes the critical path, it is time to revisit the process and search for areas of improvement.

Some ideas:

• Clearly define responsibilities in as few functions as possible. Instead of having several persons decide in R&D, look for the ONE R&D lead, that will take decisions. Do the same for other functions (marketing, sales, operations).
• Locate decisions at the lowest possible hierarchy with the best expertise to take the decision
• Meetings shall be attended only by persons that contribute. If there are two persons from the same function, with the same input and opinion present – one is obsolete.

Stay tuned

That’s it for today. Watch out for the next blog on R&D cost.

With Bessler Consulting we help R&D leaders find the appropriate answers to these questions and to develop their R&D towards shorter time to market and increased innovation rate.