For example, what if your release dates never slipped? First, you’d avoid disappointing the customers who trusted your delivery promises. And more importantly, as your reputation for dependable delivery grew, you’d be able to lock customers in sooner, getting even farther ahead of your competitors.

R&D goals fall into five categories, or performance dimensions: Product attributes, development cost, response time, R&D delivery, and innovation. Not all of these are easily quantified, but they all impact business results. Don’t make the mistake of managing only the countable dimensions.
 

So now you’re developing competitive products at reasonable cost—where else can you turn to improve R&D performance? Take a look at the other dimensions.

Response time has a far-reaching impact on business results because each product opportunity has a life cycle that is fixed in absolute time. Factors outside of your control, such as new technologies, competitive developments, or shifting customer needs, determine when a market need emerges and when the opportunity is no longer viable.

If you can recognize a need, define a product, and release it sooner in the opportunity life cycle, your product’s sales will ramp faster to higher levels and enjoy longer life to achieve much higher returns. Fast response time also feeds a self-reinforcing cycle that makes your company agile in the market, since completing one project sooner means you can respond more quickly to the next opportunity.

OK, response time has a big impact on R&D performance, but aren’t your new product teams already working as fast as they can? In fact, most companies have two ways they can cut response time: First, recognize opportunities sooner; then apply more resources to each project. If response time is important, take a look at opportunity scouting and project resources.

R&D delivery performance means reliable release dates and dependable early product shipments, which impact business results by building customer confidence in your new products. Again, this effect is hard to count, but powerful. If you’ve resigned yourself to living with chronic schedule slips and painful early product shipments, ask your sales force what their jobs would be like if suddenly you could release and ship new products on schedule. They wouldn’t have to deal with irate customers and could lock sales in sooner because customers would believe your delivery promises. 

If you can combine dependable R&D delivery with fast response time, you gain a compound advantage. You can spot an opportunity sooner, release a solution more quickly, and lock customers in even before you release the product. This combination leaves slower, less agile competitors hopelessly behind.

If your R&D delivery could be better, take a look at the most common limitations—spreading resources too thinly across too many projects and discovering problems or new requirements late in a project.

Innovation is a critical business driver for all technology companies, but as a dimension of R&D performance, it’s not as straightforward as you’d think. Innovation is a disorderly force that conflicts with the other performance dimensions. An innovative new product technology, for example, can make schedules long and unreliable. If not balanced against other R&D goals, runaway innovation can devastate R&D returns.

Improving R&D performance isn’t easy. You have to look beyond countable goals to factors that are harder to measure, but nonetheless have significant impact on business results. This takes not only a sensitivity to uncountable factors but also good organizational communications to manage them effectively.

Above all, beware of symptomatic cures for fundamental problems. If you simply apply management pressure to shorten schedules, for example, you may get unrealistic plans that can’t be met or find teams cutting corners to finish the project sooner. To make lasting improvements, you have to find the fundamental causes that limit performance and correct them.

(For further reading, see Leading Product Innovation by Marvin L. Patterson and John A. Fenoglio, published by John Wiley and Sons)