R&D Leaders Can Help Move Innovations Off the Shelf

The details may differ, but R&D leaders keep telling us some variation of this tale: A team works long and hard for years, overcoming COVID-19 pandemic limits on how many people could work in the lab at the same time, supply chain disruptions that prevented access to critical material, technical failures that required clever workarounds. At long last, the proud moment arrives for passing the new product or technology to the business so it can move into the marketplace. The buzz and elation are palpable — at least for the members of the innovation team.

But instead of accolades and celebrations, what they hear from business partners is the painful sound of silence. After the pause: Bad news. Delayed? If they are lucky. Permanently placed on the shelf? Perhaps.

An isolated occurrence? Unfortunately not. Three-quarters of R&D leaders say less than half of the innovation projects they have attempted to transfer to the business in the previous two years have been adopted (see Figure 1). More often than not, new products and technologies make their way through the entire development process — through all of the early agreements and alignment, the stage gates and reviews, the checkpoints — only to suffer a “failure to launch” in the end.

What’s the result? Wasted time and money, for one thing. Even a delay — as opposed to a flat-out rejection — can mean a missed opportunity that can hit both the top and bottom line. For example, the competition could beat your company to the market, eroding upside potential.

And at the functional level, getting spurned repeatedly takes a toll on the R&D staff. A drop in morale and engagement, coupled with loss of credibility and closer scrutiny of the department’s budget, could lead to team departures.

While many efforts are underway to improve innovation adoption, only 37% of R&D leaders said they were satisfied with the conversion rate they’ve seen over the previous 24 months.

Take heart; the innovation gap can be reduced. Winning organizations create the conditions under which innovation moves smoothly and in a timely manner from the R&D team to stakeholders to deployment.

Figure 2 illustrates what success looks like, observing the intersection of two essential conditions for adoption by the business:

• Technology Confidence — The innovation team’s strong belief that the technology, product or process it’s developing will have a big impact in the market.

• Stakeholder Acceptance — Stakeholders’ enthusiasm for the impact of the technology, product or process on the business and their plans to use it.

The overlap — where both conditions exist — is the end state R&D leaders desire.

An obvious impediment to “innovation adoption readiness” is risk aversion on the part of either R&D or stakeholders.Four successful methods to prime the business to use innovations emerged from our model, which is based on survey responses from and interviews with 294 R&D leaders.

• Understand stakeholder priorities

• Continuously collaborate with stakeholders

• Rapidly shift resources away from unpromising projects

• Bring the value of an innovation to life constantly

These activities have something important in common: They are constant processes, not one-off steps. The last two are more challenging than the first two, R&D leaders told us, but both are achievable. Solvay, a chemicals and materials company headquartered in Belgium, paired R&D and marketing partners to scout the potential outcomes of individual projects — establishing priorities fast. Tetra Pak, a Swedish-Swiss packaging company, arranged for stakeholders to follow along as an initiative unfolded, so they could visualize the business impact — galvanizing them to readily accept the result when it was ready.

Prioritize and, as conditions evolve, reprioritize. When the technology or the marketplace changes again, reprioritize anew. R&D teams will see an increase in their overall confidence when they are pouring their time and resources into the innovation they know will make the biggest difference. Using a “test and learn” system to keep evaluating ideas — and this includes killing off unpromising projects — will strengthen team members’ belief in the impact of what they are working on.

Rapid reprioritizing is not an easy ask. Assessing the value and risk in innovative ideas and projects is inherently difficult — after all, if they are truly original, they have never been done before. Most project teams are constructed and deployed against long-term initiatives with careful consideration to capacity, capability and resource constraints, and that makes reshuffling complex and time-consuming. And, of course, ego and hubris come into play because a canceled project can be seen as a personal and professional defeat.

At Solvay, R&D wanted its team members to fully embrace the potential value of the projects under consideration.

At the onset of a project, Solvay often finds it difficult to fully define the value proposition, so it developed a way to more clearly and accurately articulate why an idea was a breakthrough with big possibilities. The function set two important criteria for its process: A value assessment shouldn’t take too long, nor should it be solely an R&D activity.

Leaders crafted a time-boxed exploration by facilitating a partnership between R&D and marketing.

The aim: Gain a deeper understanding of an idea’s potential and the possible risks. Jointly develop an action plan.

The number of people involved: Two — one technical employee and one from marketing.

The deadline: 60 to 90 days.

The task: Conducting structured interviews with 20 to 50 external stakeholders, such as members of supply chain networks, potential customers and possible innovation partners. The duo is looking and listening for important customer needs and potential risk factors — learning what and how the idea might need to be altered or refined, and trying to identify what potential business models or early adopters might exist.

The goal: Make a clear recommendation to leadership on whether moving forward with the project makes sense. If leadership grants approval, then the duo must also recommend which KPIs the organization should track to measure progress and mitigate risks.

As a result, stakeholder communities in both R&D and marketing feel optimistic about the project. The idea has been validated by external sources,and stakeholders have a game plan on where and how to learn more, and where and how to avoid potential risk factors. In essence, Solvay has developed a fast-twitch muscle to quickly ascertain the value of an idea and how to best proceed. And if it isn’t worth pursuing, the research sprint yields knowledge for future innovators. Solvay’s value assessment exhibits rapid prioritization and then reprioritization in action (see Figure 3).

As successful R&D teams grow more confident in their innovation projects, they must also pump up stakeholders’ enthusiasm to deploy the end results. To do that, R&D should help stakeholders understand the technology and then make it tangible, creating a more urgent demand for adoption.

Experiments in this space abound. For example, 3D printing enables faster prototype construction, while augmented and virtual reality can help stakeholders touch, feel and experience more nascent technologies.

Regardless of the techniques involved, establishing a common innovation language is a critical first step.

At Tetra Pak, the R&D team adopted the familiar Technology Readiness Level tool to let stakeholders follow along as development unfolded. Tetra Pak added three categories to the basic technical readiness category: supply readiness, service readiness and business readiness.

Tetra Pak created consistent definitions for each readiness level, from Level 1 (identify) to Level 12 (full launch).The comprehensive system helped stakeholders clearly understand and track an innovation’s development (see Figure 4). The readiness scale made stakeholders ready, too — they were fully visualizing the innovation’s value.

Concentrating effort and improving on rapid priority shifts increases business readiness to adopt innovation by up to 9%. Becoming a top performer in making business impact visceral is even more helpful — boosting readiness to adopt innovation by up to 23%. A significant improvement in preparing the business to put innovations to work at scale could be the difference between marketplace success or failure. After all, winning organizations set the pace on unveiling new products and processes.

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Evidence

This research was conducted between January and June 2022 and was based on qualitative interviews, as well as a quantitative survey with a global sample of over 294 leaders involved in new product development.

The online survey was fielded from April through June 2022 and included leaders involved in new product development from the following countries: Australia, Canada, China, France, Germany, India, New Zealand, United Kingdom and United States. To qualify for the survey, respondent organizations had to have an annual enterprisewide revenue of at least $500 million and an R&D department. Respondents themselves had to have attempted to transfer a next-generation or transformational innovation into the business in the past 24 months. Respondents represented nine industry groupings: financial services, government, information technology (software and services), information technology (IT hardware, semiconductors and communications equipment), manufacturing (nonhealthcare equipment, natural resources and energy), manufacturing (healthcare equipment and supplies, medical devices and pharmaceuticals, biotechnology and life sciences), telecommunications, transportation and utilities. Approximately 76% of respondents came from B2B organizations, and 24% came from B2C organizations. A variety of revenue bands were represented:

• 20% of respondents came from organizations with an annual revenue of $500 million to less than $1 billion.

• 23% had revenue of $1 billion to less than $3 billion.

• 11% had revenue of $3 billion to less than $5 billion.

• 12% had revenue of $5 billion to less than $10 billion.

• 13% had revenue of $10 billion or more.

Qualitative feedback was also based on interviews throughout 2022 with R&D leaders involved in new product development from a wide variety of industries.