Last time we looked at the third tenet of innovation and the eight key things every leadership team should do to promote innovation. Today we’ll look at the fourth tenet, which explores R&D’s role.
Tenet #4: The research and development department must be an innovation engine.
Most people would agree that R&D is a key contributor to innovation. While not every innovative idea will come from R&D (innovations in marketing, manufacturing, and business processes are also essential), an energized R&D team with the freedom to innovate is fundamental to success.
If you ask the typical R&D manager what it means to be innovative, you’re likely to get an answer something like this: the most innovative people are the ones who come up with the largest number of creative ideas. They have the most patents. In meetings, they come up with idea after idea. They continually awe others with their creativity.
I’ve known many of these people throughout my career. If you query their colleagues, what you’ll often hear is, “Wow, Joe is really innovative. We don’t have time to explore a tenth of the ideas he comes up with. I’m glad we don’t have more like him or we’d never get anything done!”
Wishing for fewer innovative people is not the right answer. It might be better to re-think your concept of what it means to be innovative. By now you should recognize that creativity by itself is only the first step in innovation. Joe’s brilliant ideas mean nothing if they can’t be commercialized. The true measure of innovation is not merely the number of ideas a person throws out or the number of patents they have been granted, but how much they contribute to the success of the business.
Several years ago I was asked to review a large portion of our company’s patent portfolio to see just how well we were using our intellectual property. The task was challenging and it wasn’t always easy to tell whether older patents had ever found their way into products. But one thing was clear. Somewhere around half of the company’s patents had been filed, granted, and put on the shelf, never to be heard from again. Not used in a company product. Not licensed or sold to others. Not enforced against others or used as a defense when others tried to assert patents against us. The time, energy, and expense to obtain these patents were simply wasted. It was a wake-up call that forced management to re-think and improve our whole intellectual property strategy.
Companies need more innovative people, not fewer. Creativity needs to be encouraged, not stifled. If the ideas Joe comes up with and the patents he receives are truly helping the business, he should be generously rewarded. If they sit quietly on the shelf, it is time to provide him a little gentle coaching on how to become an even stronger contributor. Most people, especially the creative ones, really want to make a difference to the business. If they clearly understand the objective, they will put all of their energy into achieving it.
It is management’s responsibility to make this happen. This involves more than just sponsoring contests and handing out awards for random innovative ideas. That’s the easy part, but it’s the less useful part. The real question is what else does management do? Do they educate people on business strategy—the target markets, the product roadmap, the competitive landscape? Do they fund training programs to develop their engineering talent? Have obstacles to productivity been removed so engineers can focus on design work, not busywork? Are people allowed to spend a portion of their time exploring new ideas beyond their current assignments? Do interesting but risky ideas occasionally get funded? Are at least portions of those investments protected over the ups and downs of a business cycle, or are they jerked away at the first sign of a downturn? These are the hard parts, but they are the more important parts.
One of the most important things you can do to stimulate innovation is to give your R&D team a deep understanding of your customers and their problems. Don’t fall into the trap that I’ve seen at some companies. They view customer relationships as the domain of marketing; R&D engineers are kept close to their desks where they won’t embarrass the company in front of customers. Don’t do this. You can’t be innovative if you don’t understand the problems you are trying to help your customers solve.
When an R&D engineer gets to walk out onto a customer’s manufacturing floor, challenges she could only imagine before suddenly become real. Armed with this new information, she is more likely to come up with creative solutions that really work. Of course not every customer will permit such visits, but even if the discussion is confined to a conference room it will still be useful. Many customers welcome the opportunity to interact with your technical experts rather than the sales people they normally see. It’s a way for them to delve into technical questions they don’t often get to discuss. And it allows them to see that you really do have technical experts in your company. These kinds of interactions can also be real motivators for your engineers. Working all day every day on specific technical challenges, it’s easy for an engineer to think everything he knows is obvious to everyone else as well. It’s usually an eye-opener to discover he really is a technical expert in his field.
Customer interactions can occur is various ways: going out on a customer site visit, manning the booth at a trade show, or presenting at a technical conference are three good examples. In all cases, it is important that the R&D engineer work closely with his marketing counterpart. Marketing can help hone the message and make sure the customer interaction goes smoothly. The connection between R&D and marketing is critical, and I will explore it more fully in my next blog entry.
Another key to developing an innovative R&D department is to treat it like the valuable resource it is. Here’s an analogy. The actor Harrison Ford starred in 2008’s hit movie, Indiana Jones and the Kingdom of the Crystal Skull. The movie grossed over $750 million for Paramount Pictures in the first year after its release, largely due to Ford’s ability attract audiences. You can bet that during the filming, Ford didn’t have to handle his own shipping, schedule his own meetings, or empty his own wastebaskets. Paramount knew how to treat Ford like the valuable resource he was. In return, they got a world-class performance that led to world-class box office results.
Your R&D engineers are your own version of Hollywood movie stars. You won’t inspire them to deliver world-class results if you don’t treat them like world-class talent. Let them focus on what they do best—creating the new products and services that will drive your success. Don’t force them to divert time to routine tasks that could just as well be handled by people with less specialized skills.
This also means rewarding them appropriately—competitive pay, bonuses (tied, of course, to business results), and an inviting work environment. Work environment is often where companies get the most creative, with things like on-site gyms, free food, and expensive parties. Once when my R&D team launched a particularly important project, my boss gave the team $2000 to spend at their discretion to improve the work environment. After much discussion, they bought a high-end massage chair for people to use after a stressful day. Recognizing the support they got from marketing and manufacturing, they emphasized the chair was for everyone’s use, not just the R&D team. This set a nice precedent, and subsequent project teams strove for similar opportunities to improve the work environment. Over time, the department added such items as an espresso maker and a foosball table. The enthusiasm generated by these incentives far exceeded the tiny cost to the organization.
Remember that while these can be good supplemental benefits, they shouldn’t be the primary focus of an innovation plan. And make sure that rewards are tied to business results, not just effort. Otherwise people won’t connect their success to that of the business. Unlike academia, R&D engineering shouldn't be a tenure track position. Joe should be rewarded today for contributions he is currently making, not for those he made years ago. Otherwise his teammates will quickly recognize the favoritism and you will lose twice—by encouraging a person who isn’t contributing and by demotivating those who are.
At this point you may be thinking, “Why is R&D so special? Isn’t marketing, manufacturing, and administration just as important to the company’s success?” The answer is a resounding “yes.” Everything we’ve just discussed about instilling an innovative spirit in R&D applies equally to the rest of your organization. But that’s the subject of my next blog entry.
Next: Innovation is a team game; R&D can’t do it all on its own.
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