Anticipating customer requirements – often implicit – and identifying technology trends early in the product or technology development cycle in order to have a sustained revenue growth is crucial for any high technology industry. It is more so in the semiconductor industry which has its own economic cycles (typically 4 years of crests and troughs), high costs and technological complexities. Throw in the uncertain macroeconomic conditions coupled with increasingly dynamic and uncertainty in gauging market needs, shortening market window availability and the spiralling costs of trying to stay on the leading edge. And what does one have – a highly challenged R&D team with limited resources and the pressure to stay perched, if not ahead, on the curve.
And this is where R&D Efficiency gets all the more critical.
R&D Efficiency is the Return on the R&D investment, a tangible measure of what an entity gets for the number of R&D dollars invested.
Traditionally, the R&D team’s objectives are set along with inputs from the Biz and Technology Strategy group, Marketing & Sales group and sometimes the Field Application groups (usually a highly under leveraged asset) – and being aligned with the company’s top level vision and objective and with the available resources. Once handed down with the R&D mandate, the various R&D teams get onto what they have been trained to do best – R&D. And these mostly get done in silos with not much of active bridges of communication, let alone brain storming, between each other.
In my last post, Mining the seams, I mentioned about facilitating R&D folks to be market savvy – not to turn them into marketers but to facilitate in aligning R&D investments with market needs and achieve R&D efficiency. Having recognized that an issue exists is the first step. Making the necessary steps for the transformation follows. And this is especially catalyzed when all indicators point that maintaining the status-quo will be more dangerous than venturing into unknown.
Quite often even the well intentioned initiatives get watered down during the implementation or transformation phase. A new design flow, a more efficient way of mapping the customer requirements into your product/technology roadmap, moving into adjacencies, hedging R&D bets etc. are often “lost in translation”.
I revisited an old HBR article recently which throws light on how one can lead a sustainable transformation in an organization. It is titled, “Leading Change: why transformation fails” by John P. Kotter.
It lists 8 steps in transforming your organization:
• Establishing a sense of urgency
• Forming a powerful guiding coalition
• Creating a vision
• Communicating a vision
• Empowering others to act on the vision
• Planning for and creating short-term wins
• Consolidating improvements and producing still more change
• Institutionalizing new approaches
It is a very interesting and informative piece and would serve us well to keep in mind while transforming to increase our entity’s R&D efficiency.