Stakeholder analysis for R&D project management

R&D projects affect the interests of different stakeholders in different ways. Understanding the stakeholders and analysing their interests helps in the better management of R&D projects. In this paper we discuss a methodology to systematically analyse the stakeholders of R&D projects. This methodology includes Freeman's (1984) three levels of analysis: rational, process and transactional. Based on these three levels, the stakeholder management capability of an R&D project is determined. The final stage is based on Mitchell et al . (1997) approach to analysing the dynamics of stakeholders. This methodology is illustrated using a New Zealand case relating to a road pricing R&D project.     

Flexibility planning for managing R&D projects under risk

Incorporating managerial flexibility in an innovative R&D project is important, because managers face greater uncertainty in today's competitive and dynamic changing environment. It is essential to bring managerial flexibility into R&D project planning to decrease technical and market risks, while increasing potential market value. The objective of this paper is to develop a flexibility planning methodology based on real option analysis to improve managerial flexibility for R&D projects. The proposed methodology identifies potential risks that may occur during every R&D stage. It also recognizes a cascading option structure to resolve the identified risks, and evaluates and selects adequate options that maximize the potential value of the project. Instead of using a traditional option pricing method, a dynamic programming model that considers multidimensional product performance and market payoff is used to evaluate the R&D project value. Using the proposed methodology, managers can identify future scenarios as a function of their management actions. The proposed flexibility planning methodology can help managers improve managerial flexibility of R&D project and increase the success rate of product launch. A drug development project is used to illustrate the proposed methodology.     

A model for R&D performance measurement

R&D activities are increasingly costly and risky and, as a consequence, measuring their performance and contribution to value becomes critical. This paper illustrates a formal model for measuring R&D performance, based upon a balanced and synthetic evaluation of quantitative indicators from five different perspectives of performance: financial, customer, innovation and learning, internal business, alliances, and networks. The model is built in coherence with the suggestions coming from the theory of measurement in soft systems, which gives relevant guidelines for ensuring validity, objectivity and inter-subjectivity of the model. Then, an application in a real R&D setting is described, which helps to understand the model and to enlighten its main advantages and limits.     

Utilizing the balanced scorecard for R&D performance measurement

R&D programs are critical for many firms to achieve and sustain competitive advantage. Yet, measuring R&D performance over time can be quite complex due to inherent uncertainty. The paper responds to calls in the R&D literature to explore integrated performance measurement systems that capture financial and nonfinancial performance. We integrate the Stage-Gate approach to R&D management with the Balanced Scorecard to present a framework to show how firms can link resource commitments to these activities and the firm's strategic objectives. In this paper, we provide specific examples of how firms can apply this integrated performance measurement system to the R&D function.     

Managing innovative R&D teams

Successful R&D groups not only generate innovative ideas, but also transfers these newly created concepts through the organizational system for economic gain. While innovation is not a random process, managers often argue that R&D performance is hard to measure and even more difficult to manage. An exploratory field study into technology-oriented R&D environments determines the principle factors that influence innovation-based performance of R&D teams. The results identify specific barriers and drivers to innovative team performance and provide insight into the type of an organizational environment and managerial leadership that is conducive to innovative R&D team performance. The data further suggest that many of the performance variables have their locus outside the R&D organization. Yet, managerial leadership style, both at the R&D team level and at senior management, has significant impact on creativity that ultimately affects R&D performance.     

R&D 'programmes-competencies' matrix: analyzing R&D expertise within the firm

The author suggests that the systematic identification of a firm's technologies opens up the possibility of evaluating, protecting, optimizing, enriching and exploiting these technologies to the full. A firm's technologies fall into two parts: those embodied and exploited in current operations and those evolving from the collective competencies of its R&D staff. The author's aim is to evaluate and describe the firm's R&D competencies.
The identification of R&D competencies proceeds in three steps: tracing the background of the current and past programmes, constructing a programmes/competencies matrix, and deriving an expertise profile. The construction of the matrix is the key activity and requires much care in its execution, if competencies are to be properly defined and truly existing, and if it is to be exhaustive. The author sketches a procedure for constructing a matrix and discusses problems of implementation and draws attention to some of its limitations.
The author claims that such an inventory of expertise could improve the efficiency of the use of the R&D resource, identify a laboratory's strengths and weaknesses, direct R&D into hitherto neglected channels, assist individuals to identify and evaluate their own expertise, justify obtaining funding for building expertise in shortage areas. The method should be considered as a starting point to formulate appropriate strategies to gain access to technology.     

In-house R&D management development — strategy and implementation in a major government R&D agency

Abstract
The paper describes the experiences of CSIR in developing an in-house capability and implementation process of R&D management development programmes. The conceptual approach of the laboratory-based R&D management development programmes is described. Different phases in the process of implementation are presented along with the case studies of recent training programmes in two different laboratories. Some of the key aspects of the training programmes —- successful implementation, relationship with policy-making, and improving R&D performance have been examined. The role of international co-operation in R&D management development is suggested. The paper also discusses the future prospects of R&D management development programmes in the country.     

A basic model for evaluating R&D performance: theory and application in Italy

Nowadays the public R&D laboratories have a fundamental role in countries' development, supporting businesses as they face the technological challenges in the turbulent world scenarios. Measuring the performance of R&D organisations is crucially important to decisions about the level and direction of public funding for research and development. This research considers the public laboratories like systems and develops a mathematical model based on the measurement of R&D activities with k‐indices. The score obtained from the research laboratories evaluation (relev) methodology synthesises in single value financial, scientific and technological aspects. It is an indicator, for R&D manager and policy maker, of performance in relation to other research organisations or in a time series. The method is an instrument of strategic planning and can be used for the improvement of individual activities and the overall performance of public R&D bodies.     

The importance of internal and external R&D network linkages for R&D organisations: evidence from Singapore

This paper examines the importance of internal and external R&D networks for R&D organisations of multinational firms (MNCs) in Singapore and investigates corresponding R&D management requirements in this context, namely a late-industrialising country in Asia. A unique feature of Singapore is its ability to attract 'high quality' foreign direct investment, involving activities of higher value added and more complex technology without having developed full-fledged R&D activities among its business organisations, thus creating a challenging situation for subsidiary R&D managers, both in the internal R&D organisation as well as in the external research environment. This paper analyses these issues.
Based on in-depth interviews with 53 R&D subsidiaries of MNCs operating in Singapore, this paper identifies internal and external R&D management needs. Through our analysis of data gleaned from these interviews, we found that subsidiary R&D managers need to increase and/or maintain the strategic importance of their R&D site internally within their global corporate R&D organisation. This requires constant upgrading of the technological level at the R&D subsidiary and intense communication with headquarters as well as other R&D subsidiaries. Furthermore, our findings indicate that in the external research environment, subsidiary R&D managers need to create an efficient local network of external players. If these internal and external issues are properly addressed, the R&D subsidiary can effectively contribute to the corporate R&D organisation and be a critical partner in the local research network. Lessons learned from the Singapore experience include the need to develop sufficient local expertise as well as to change the mindset of managers to focus on creativity rather than precise execution.     

Developing a process for the relative valuation of R&D programmes

This paper addresses the issue of R&D programme prioritisation within a manufacturing company in the aerospace industry, in the context of an overall framework for technology management. A review of approaches to R&D project selection leads into a recent case, which describes how the company developed a practical methodology. The benefits of the process and the relevance of the academic contribution are discussed, leading to a practical checklist for in-company development of a prioritisation process.     

R&D validation planning: a methodology to link technical validations to benefits measurement

An important activity in many R&D departments is the internal development of new process technologies and practices to assist in the marketing, design and manufacturing activities of the enterprise. An integral part of this R&D development is the planning and management of validations of potential technology projects. These validations are necessary to determine the technical, financial and organizational feasibility of the projects and to develop data for benefits measurement for further funding of selected projects. This paper describes a methodology for validation planning of new process technologies and practices. The methodology allows for the explicit linkage of a validation to the identification of its financial and strategic benefits. These often diverse measures of worth are integrated using a proven multi-attribute justification approach within the planning methodology. The methodology and the multi-attribute approach also support the comparison of dissimilar projects having different benefits. The methodology acts as an organizational planning tool integrating the needs of the diverse constituencies involved in R&D planning. It also acts as a tool to aid engineers and scientists identify and present the benefits of the proposed technology.     

Economic compensation compositions preferred by R&D personnel of different R&D types and intrinsic values

In order to enhance R&D performance, R&D managers make sure that R&D personnel are satisfied with their compensation, both economic and non–economic . An R&D compensation scheme would consist of many complex factors. In this research, we focus on 'compensation composition' as such a factor for the economic compensation system, i.e., the mix of compensation components such as team (or organization) performance based, individual (R&D personnel) performance based, and fixed (seniority based) portion of economic compensation. As part of non–economic compensation, intrinsic values such as social status and self–actualization perceived by the R&D personnel are influencing their level of satisfaction with the entire compensation system. Another critical factor we consider here is the difference in R&D types: there are three R&D types, i.e., basic, applied , and commercial R&D . We put forth two sets of propositions. First, there is statistically significant correlation among R&D personnel's job satisfaction, performance measurement satisfaction, and compensation satisfaction. Second, depending on the types of their R&D activities, R&D personnel prefer a certain composition of economic compensation. In addition, the relationships are mediated by whether the R&D personnel feel intrinsic values of their jobs.     

The allocation of R&D resource

Abstract
The allocation of R&D resource in a multi-business organisation is often based more on current operating performance than on the relative potential for technological development of the businesses. The approach suggested in this paper attempts to overcome these problems by linking R&D allocation very closely to business strategy. The two key concepts are technology leverage, i.e. the extent to which technology can change the business environment in an industry to yield competitive advantage, and business leverage i.e. the current competitive strength of an individual business within an industry. Where technology leverage is weak, competitive advantage will be mainly dependent on factors other than R&D and it is suggested that levels of R&D effort at or below 1 % of turnover are appropriate. Where technology leverage is strong, R&D can be effective in maintaining strong business leverage by achieving technology mastery or in transforming a weak business position by creating a technological discontinuity. R&D intensities ranging from 3 to 15 or more % of turnover are thought to be appropriate in these cases. This framework can be used for policy debates on R&D allocation, for example whether the R&D allocation is appropriate for the business strategy or whether R&D could spearhead a more expansionist business strategy. The framework has been successfully used in ICI Chemicals and Polymers Limited during the annual R&D budget process.     

The path of R&D efficiency over time

In this paper we investigate the pattern of R&D efficiency in terms of the number of product innovations achieved by firms over time. Using a panel dataset of Spanish manufacturing firms for the period 1990–2006, we follow the innovative performance of R&D active firms and observe that innovation rates change over firms' R&D histories. To explain these facts we propose a model that explicitly acknowledges the twofold composition of firms' R&D expenditures, comprising spending on both physical capital for R&D projects and payments to researchers. We regard this latter component of R&D as a source for dynamic returns to firms' R&D investments. Consequently firms' innovation outcomes clearly depend on how long they have been investing in R&D and also on whether there have been any interruptions in the temporal sequence of R&D activities. Our results suggest that R&D activities exhibit dynamic returns that are positive but at a decreasing rate, and that interruptions in R&D engagement reduce R&D efficiency.     

Mapping the invisible colleges of R&D Management

R&D Management has consistently been considered one of the top technology and innovation management journals since its inaugural issue in 1970. The purpose of this paper is to use bibliometric techniques to examine R&D Management in four time periods, 1986–1990, 1991–1995, 1996–2000, and 2001–2005 in order to reveal changes in its intellectual base. Bibliometric research has illuminated the knowledge domains of several technology and innovation management journals including R&D Management Linton and Thongpapanl, but there has not previously been a comprehensive detailed analysis focused only on R&D Management . Using co-citation analysis, this paper identifies the invisible colleges (research networks) associated with publications in R&D Management . The results indicate that Cohen and Levinthal's absorptive capacity model dominates the final two periods. The conclusions suggest how the absorptive capacity model might be more effectively utilized in future R&D Management research.     

Capital Budgeting Practices for R&D: A Survey and Analysis of Business Week's R&D Scoreboard

This paper discusses results of a survey of U.S. Corporations regarding the extent of the utilization of standard capital budgeting measures of investment worth to evaluate R&D projects. This study analyzes responses by three types of R&D activity: Basic, Applied and Development research. The results indicate that discounted cash flow methods are widely utilized in the evaluation of Development projects, and the analysis of Development projects is as sophisticated as the evaluation of non-R&D projects. The use of discounted cash flow analysis techniques for Applied projects is considerably less widespread than for Development projects. However, the utilization of Net Present Value and Internal Rate of Return increases with firm size. Basic research projects are much less likely to be subjected to a formal economic analysis and are generally thought of as being “strategic” investments. This research also indicates that post-audits of Applied and Development projects are based on economic measures, whereas Basic research projects focus on physical or operational goals. Lastly, this research indicates that most R&D projects are terminated because R&D priorities have changed rather than because they are not technically feasible.     

The impact of EC R&D programmes on corporate R&D practice in Europe: a knowledge-base approach

This paper examines the role of additionality in the impact of EC R&D pro-grammes on firms. It comes from a study of the Impact of the EC Framework Pro-gramme on European Industry, which was sponsored by the Support Programme for Evaluation Activities in Research (SPEAR) of the EC. The argument is that there is an interaction between ie use of additional R&D resources, the organization of the R&D process, and the exploitation of R&D results. The analysis of the R&D process takes place within a framework based on the concept of the knowledge-base of the firm. A number of case studies are discussed and conclusions are drawn as to the impact of the EC Framework Pro-gramme on European firms.     

Assessing collaborative, pre-competitive R&D projects: the case of the UK LINK scheme

The paper addresses the evaluation of outcomes of collaborative, pre-competitive R&D projects. It draws on some empirical analysis carried out on data and information gathered under the UK 'LINK' scheme, a programme supporting R&D collaborative projects and assessing collaboration outcomes. A new indicator of performance, based on the outputs of LINK projects, has been constructed. It provides a relative and quite consistent measure of performance for making comparisons among different LINK projects. However it does not correlate with the more subjective grade applied by LINK's own management. For further improving evaluating mechanisms, more attention should be paid to the benefits that universities and companies as well as governments are drawing from R&D collaborations.     

A comparative analysis of R&D project evaluation methods

A large number of methodologies for Research and Development (R&D) project evaluation have been developed and reported in the literature over the last few decades. Almost all of this literature focused on the mechanisms and underlying theoretical foundation on which the evaluation methods are based. Very little attention has been paid to the effectiveness and suitability of the techniques, especially a comparison of the techniques. This paper presents a comparative study on a number of classes of R&D evaluation methods based on the Analytic Hierarchy Process. We look into the various factors and characteristics of R&D evaluation methods that affect their suitability. A sensitivity analysis was also carried out to determine the critical factors.     

Organizational learning through post–project reviews in R&D

Post–project reviews are one opportunity to systematically improve performance in subsequent projects. However, a survey reveals that only one out of five R&D projects receives a post–project review. Post–project reviews – if they take place – are typically constrained by lack of time and attention as well as lack of personal interest and ability. They focus mostly on technical output and bureaucratic measurements; process–related factors such as project management are rarely discussed.
In this paper we review the role of post–project meetings as a tool to improve organizational learning at the group level. Based on 27 in–depth interviews with R&D managers carried out between 1997 and 2001, we categorize four classes of learning impediments. These difficulties are not easily resolved, as is illustrated by examples from Hewlett–Packard, DaimlerChrysler, SAP, Unisys, the US Army, and others. We propose a five–level post–project review capability maturity model, identifying some of the key capabilities that need to be in place in order to advance to the next process maturity level. Most companies reside on the first or second maturity level. Our conclusion is that many companies give away great potential for competence building by neglecting post–project reviews as a tool for systematic inter–project learning.