Alan W. Pearson

Performance measurement in industrial R&D

Currently, the need for RD indeed, the rising cost of R&D, greater emphasis on value management and a trend towards decentralization are escalating the need for ways of evaluating the contribution of R&D to corporate performance. However, although recent research and writing on the subject shows that the challenge of developing such sound measurements has been taken up by many academics and organizations, it is also clear that there is no generally applicable approach. In this review, we consider various approaches for measuring the performance in industrial R&D and identify their key characteristics. We also include a brief summary of the ‘history’ of performance measurement in R&D, which shows that although there are some new ways of looking at the issue there are many examples from the past that can contribute to our current thinking. The approaches found in the literature and practice are very varied in their application, some being more suitable for the project level, others for the R&D department, and some for the development process or for the organization as a whole. Furthermore, the uses of the approaches tend to be different. For example, some approaches are intended to justify the continuation of investment in R&D to upper management, whilst others are more suited to support learning and self-correction by empowered R&D teams. In this paper these uses, or ‘functions’, of performance measurement and a taxonomy of typical subjects of measurement in R&D environments are explored. Finally, we conclude the review with a discussion of some limitations of the growing literature on R&D performance measurement.

Is more always better? An exploration of the differential effects of functional integration on performance in new product development

The objective of this paper is to explore the relationship between performance in new product development (hereinafter NPD) and functional integration under different conditions of project uncertainty. Functional integration is conceived as a two-dimensional concept, encompassing a behavioural — collaboration — and a structural — interaction — dimension. This study is based on 92 questionnaires looking at NPD activities in more than 40 British and Dutch companies from various industrial sectors. The results suggest that the nature of the relationship between integration and performance is contingent upon the project stage and the degree of novelty in the new product. Integration in the initial stages of the project assumes a prominent role in the quality of the end product, whereas in later stages it is more associated with time to market than with costs and end product quality. Results further show that the dimension collaboration of integration may be more relevant under circumstances of high new product innovativeness than when minor variations are introduced in a new product. The paper ends with a discussion of the use of universal approaches to NPD management.

Analysis of some portfolio selection models for R&D

This paper presents an analytical review of mathematical programming models that have been proposed as aids to the related problems of resource allocation and project selection in RD built-in assumptions; ease of computation; usefulness of outputs; versatility of application.

Managing uncertainty in research and development

Abstract In this paper we consider the issues of decision making under uncertainty with particular reference to research and development (R and D). We briefly outline some of the techniques, which have been discussed in the literature, and we consider two, which have been reported as being useful in practice. The first of these, the decision tree approach, has been around for a long time whereas the second, Option Pricing Theory, has only become of interest in the last decade. We report the outcomes of an examination of alternative techniques for assessing projects in the portfolio of the UK chemicals division of a diversified multinational company. Under the conditions of limited data availability commonly found in companies, Option Pricing Theory was found to be a useful aid in assessment of projects in the divisions portfolio when combined with a Monte Carlo method and decision trees. Not surprisingly, we conclude that more attention needs to be paid to documentation of projects and that data availability is a significant issue which needs to be addressed.

Tools for the Improvement of Organizational Learning Processes in Innovation.

Learning is an essential part of innovation, including the need to internalize and disseminate information and to reduce the duplication of research activities, both technological and organizational. Using a theoretically based framework that places emphasis on the interpretative dimension of organizational learning and centers on learning processes, descriptive accounts of organizational learning in the context of R&D-intensive companies were produced. From these case studies, specific learning tools or mechanisms were identified: job rotation, innovation process planning (activities, responsibilities, networks, sharing assumptions) and (product innovation) project review. Overall findings point to an organizational learning process which involves a high degree of parallelism and depends on the knowledge base of the organization.

Managing Interdisciplinary Research

Leading practitioners and management scientists identify and discuss the key issues affecting the management of interdisciplinary research. The intention of this collection of papers is to capture the main themes discussed, to illustrate the variety of activity in the field, and to bring out and clarify important issues of method and practice.

Managing technology as a virtual enterprise

The complexity of R&D projects and growing international competition are factors leading to more co‐operation especially among small and medium‐sized firms. But even large integrated firms are often not willing or able to perform the necessary amount of R&D and to cope with the uncertainty associated with radical innovations. In a virtual company, members form a network, thereby enabling projects to be pursued by combining member’s resources. Specific assets of a virtual company are its flexibility and ability to handle variety. Costs of co‐ordination and motivation are lowered if the virtual company succeeds in building trust and commitment. On the other hand, lack of these pose severe problems. In markets with a strong scientific‐technological basis and rapid rate of change the concept of a virtual organization seems appealing. High R&D costs and risks can be shared, developments and time‐to‐market can be accelerated and the partners can concentrate on their respective core competencies. In the paper we use an example from the biotechnology industry as a case study and discuss some of the theoretical and practical problems that are encountered in the virtual enterprise.

Total Quality Management in Research and Development

Quality in research and development (RD but so far the quality principles and systems have been difficult to translate to the R&D function. Looks at the challenge of effective implementation of quality management and total quality principles in R&D. Discusses quality concepts, terms, systems and critical factors for successful implementation. Uses brief case histories to highlight particular approaches to implementation. Finally, introduces a new, versatile method for evaluating the capabilities of an R&D organization in terms of total quality management. It is presented in the form of a case study showing its use in a large R&D laboratory of a major multinational corporation.

Technical and marketing aggressiveness and the effectiveness of research and development

It is argued that the degree of technical and marketing aggressiveness has an impact on the performance of a firm. The reasons for this are explored drawing upon a number of recent research studies. The conclusions are that these two dimensions, which are identifiable in practice, are useful descriptors of important organizational characteristics and as such provide information for managerial decisions. >

Senior Management Support in the New Product Development Process

This paper studies the relationship between senior management support to new product development activities by means of a quantitative and qualitative analysis of questionnaire and interview data collected in the United Kingdom and the Netherlands. The quantitative analysis showed that there is a small to medium association between senior management support to new product development and project performance in the dimensions of time, cost, and end product quality. The qualitative analysis suggests that these weak links could be explained by separating the influence of senior management support on new product development activities into direct and indirect effects. Direct effects include issues such as the use of multifunctional senior teams and process champions, whereas indirect effects include issues such as organization mission and goals, and learning and knowledge management systems.