10 R&D Productivity Challenges and Innovator Solutions

It’s no secret that R&D and innovation teams are being squeezed harder—productivity stats aren’t exactly eye-watering. But rather than rehash fearmongery, we thought we’d do something… well, productive. So, we asked 10 innovation and R&D experts what they think are the sources of and solutions to challenges that kill R&D productivity.

Posted June 20, 2017

Experts who shared their views work across varied industries, including pharma, chemicals, tech, automotive and agtech.

Some popular R&D productivity killers discussed by our A-Team of experts include, among others:

• R&D and IP collaboration
• Staying connected to end users
• Team structure
• Research and development alignment
• Funding

We’ve summarised in this 1500-word article the salient points uncovered by our research. But you can (and should) download the full report on R&D productivity and ROI challenges, which is over 3000 words and contains each expert’s full analysis.

CHALLENGE: Triple threat of regulation, money and business savvy

“It’s quite hard to get money because there are millions of great ideas and smart people out there. With bio-based products, there are a million different things that they can be used to make so… how do you regulate and legislate for that?

“In terms of making a business case, there are many people who’ve created amazing chemical processes but without giving any thought to questions like, ‘Who am I selling this to, and how?’ So, they haven’t totally thought about what the end use is.”

SOLUTIONS: Double team of joint ventures and commercial awareness

“All the success stories share the quality of having identified the core of their products and markets.

“Importantly, it’s about being cost-competitive. People won’t buy something just because it’s bio—it must be the same price or cheaper.

“I think the biggest success stories that I’m seeing is with joint ventures.Instead of going to banks or VCs, you go to your typical big chemical companies—like BASF or DuPont—that already have expertise. It’s like acquiring the business nous and the business case from the commercially successful big chem companies. But it also helps take care of the money as well, because it’s a lot easier to secure funding if you’re partnering with a long-established company like BASF.”

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CHALLENGE: Lack of human and non-human resources

“Firstly, resources—R&D teams support innovation as well as production. The lack of resources hurts the potential of research and development. The lack of quick management decisions can hurt innovation and research.”

SOLUTION: Expansion and then division of labour

“As a solution, I proposed splitting the team into two—the innovation team and the R&D team, each with different roles. This solution allows our top engineers to dedicate their precious time only to innovation.”

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CHALLENGE: Straddling the present and the future

“In many tech companies, if they have a group called ‘research’ or ‘R&D’, it tends to be a group of extremely smart people who want to look out at the 5 or 10-year future. Then you have the product development teams, who are thinking about what they can release next quarter or next year. In computing and software you need to be considering both of those timeframes—today’s basis of competition, and tomorrow’s—because the industry changes so fast.”

SOLUTION: Unique focus for unique teams

“I think there’s an opportunity for the research side to be more open and permeable to the outside world. They can be the ones who are meeting with startups, mentoring at entrepreneurship competitions at universities, running open innovation challenges and engaging with accelerator programs that are relevant to their industry.”

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CHALLENGE: Wasted potential

“Many companies tend to think of research and development as an internal, somewhat secretive function. This isolation often creates a gap between research and development, and market needs and acceptance. The main challenge lies in how to make sure the R&D discipline is working on appropriate projects—those that are needed in the industry, by customers and end users. This is a challenge that many companies struggle to meet. Companies that are not well connected to customers and end-user needs, often fail to focus on the right things, and waste valuable resources.”

SOLUTION: Customers will show you the way

“The information vacuum existing with some large companies results from spending too much time, internally, talking to each other. The nature of large organisations may never change, but it is still possible within a large, closed organisation for individuals to break out and lead practical product development—by connecting with customers and listening to their concerns and ideas for change.”

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CHALLENGE: Natural differences

“The nature of research is different to that of development. The researcher will find new elements to investigate further and the developer will test and apply the improved solutions as soon as possible, in order to be competitive in the market. The challenge is to find the right balance.”

SOLUTION: Test early, learn fast

“The solutions could be to bridge industry-led R&D and long-term R&D—in parallel with development. Early economical evaluations and early lab tests during R&D, should be used as screening tools to select the most attractive solutions and drop the others.”

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Download the full research piece on which this article is based: The Biggest R&D Challenges: Experts explain how to solve them.

CHALLENGE: Out of time and out of sync

“There is a mismatch between research and development—in terms of objectives and timeframes—which is further exacerbated by the organisational separation of both tasks.”

SOLUTION: Make research and development two peas in a pod

“Overall, the solution probably lies in stronger integration between the research and development functions. Ideally, research and development should not only be in the same department, but should also have strong overlap in personnel.”

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CHALLENGE: Tension between R&D and IP

“Honestly, R&D and IP collaboration is always difficult. Any time you’re working with another company, commercial interests, allocating new IP ownership and access to background is always complicated.”

SOLUTION: It’s a game of give and take

“You have to go in knowing it’s a compromise and you have to figure out a way to make it work for both companies—at least for the near term. In the best scenario, it’s a situation where [you say], ‘If we collaborate and we improve upon your base technology, then you can own it [the IP], and we just want a limited license for it.'”

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CHALLENGE: The price of distrust

“The biggest challenge facing the biopharmaceutical industry today is pricing. Pricing has created a crisis of trust in the biopharmaceutical industry. Instead of focusing on the value of new medicines—like the hepatitis C drugs that cure this disease—saving lives and actual results in overall savings to the healthcare system, critics focus on the cost of $1,000 per pill, which itself is inaccurate.”

SOLUTION: Make promises—and keep them

“Big Pharma has taken steps by removing some of these companies from its trade association (PhRMA). But more companies need to promise, like Brent Saunders at Allergan has done, that they’re committed to responsible pricing of their products.”

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CHALLENGE: Lack of market demand

“One of the biggest obstacles for collaboration between R&D departments is the lack of common ground. In our case, it is the insufficient awareness of the need for monitoring fire suppression cylinders, leading to the lack of demand from the end-user market. We also find that the fire safety industry is stagnant in its appreciation of new technology, so there is resistance to new methods—which is a large barrier for collaborative R&D.”

SOLUTION: Take matters into your own hands

“There needs to be a demand in the end-user market to drive better R&D collaboration. Also, overcoming the resistant attitude to new technology is necessary for effective and exciting R&D collaborations.”

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CHALLENGE: Big wigs and free spenders

“There’s a natural conflict and a significant barrier between the marketing or sales function within an organisation, and the technical or R&D function.

“In the industry itself, the barriers are related to the dominant forces in the agricultural industry—with large, multinational chemical companies because those guys have all the money. They can hire all the technology they need and deal with all the regulatory hurdles that occur in the industry.”

SOLUTION: Go straight to the source

“In North America, distributors have gotten around the power of the multinational chemical companies by building a strong bridge to the agricultural farmer.

It’s companies like mine that actually control the buying interface and the farm gate.”

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Download the full research piece on which this article is based: The Biggest R&D Challenges: Experts explain how to solve them.