Research & Development approaches as we’ve known them can no longer provide the needed results in today’s dynamic, “VUCA” (Volatile, Uncertain, Complex, Ambiguous) global business ecosystem. Improving R&D approaches is an absolute necessity. Leaders must become more aware of faster changes, and subsequently to be nimble and stay one step ahead, using technologies that include artificial intelligence to lead the way.
R&D is linked to innovation in the corporate arena and the public sector as well. The end goal is to take new products and services to market by allowing a company to stay ahead of its competition by designing new solutions and improving current offerings, based on evolving market needs. With long-term profitability in mind, R&D divisions seek patents, copyrights and trademarks as innovations generate value to meet new market needs. This requires companies to innovate and employ R&D supported by substantial capital, directly or outsourced.
Software technology companies tend to spend the most on R&D. According to public company filings, the following well-known companies carried out the greatest research and development expenditures in 2020: Amazon (USD 42.7 billion), Alphabet, Inc. (USD 27.6 billion), Huawei (USD 22.0 billion), Microsoft (USD 19.3 billion), Apple (USD 18.8 billion), Samsung (USD 18.8 billion) and Facebook (USD 18.5 billion). Their innovations have created stockholder value along the way, generally keeping them one step ahead of competitors in a faster moving world.
Matthew Stanton, Forbes Councils member of the Forbes Business Development Council, wrote about important steps to deploy effective and successful R&D strategy:
First, it’s important to have a clear strategic framework. Stanton wrote that the primary step toward building an organization’s strategic framework is to comprehend which aspects need R&D focus. When there are objectives and goals, intrinsic issues of success, measurements and reporting can be dealt with. It’s about the allocation of scarce resources, so it’s vital to be selective, test appropriately, analyze metrics, identify what doesn’t work and allocate resources to resolve any of the most important subsequent issues.
Second, there should be a dedicated R&D strategy management team. The devoted team must have carefully assigned roles, responsibilities and accountability to help determine whether or not the R&D program is implemented effectively and make changes along the way. Designated individuals should work with the group to have a defined research, design and new product process, with assigned roles. Moreover, they need to have a rigorous testing methodology. In fact, the conclusive part of understanding the effectiveness of R&D organizations is to ensure the right test environment. A proper test environment will take all these factors into account to ascertain when a product tweak is needed.
Given the exponential rate market changes along with technology advancement, more modern approaches to R&D are important for companies to stay competitive. The risk of stagnation is greater than the risk of innovation, so executing defined and dynamic R&D strategies is a necessary part of surviving and thriving in 2022 and for the future.
Maimun Mustafa is the executive director of Global Chamber® Dhaka.
Photos courtesy of Global Chamber