Bill Nixon

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.

Productivity and performance measurement in R&D

The paper discusses the challenges facing productivity and performance measurement in research and development (R&D). Traditional methods are generally not appropriate because of the nature of the output which is long-term and often intangible. R&D can be related to three types of pertinent measures which are the process, the output and the pay-off. Capability and latency are also illustrated as the strategic link between productivity and performance. Total productivity, supported by a family of partial yardsticks, is advocated as the most effective means of control. Benchmarking is shown as significant and important in the pursuit of improved R&D management. It is stressed that though measurement may be difficult it is vital for the success of R&D strategic planning.

Evaluating design performance

The role of design as a means of differentiating products and services is increasing as it becomes difficult to sustain competitive advantage through technology alone. Yet until recently, there has been virtually no quantitative information available relating to the contribution of design to business performance, and there are only a few studies on performance measurement of design. This paper, which is based on a review of the relevant literature, two case studies and extensive discussions with design managers and consultants, highlights the need for a clear understanding of the pervasiveness of the design activity that is being evaluated and an appreciation of the many disparate roles that it plays from the idea generation stage through to development, packaging, market positioning and promotion. The span of design over a products life cycle, encompassing form (appearance), function (performance) and fit (ergonomics), is just one reason why the design function may be located in RD this diffusion of the design activity increases the difficulty of evaluation. The research identified several factors that influence the balance between quantitative and qualitative measures of design performance. The two projects examined in this study revealed a strong top management preference for ex-ante evaluation, and an ex-post emphasis on metrics for the performance of the project and the cross-functional team responsible, rather than on single disciplines within the team. The study also suggests that the complexity and dynamics of the competitive environment in many industries requires new conceptual models and a new, less linear, way of thinking about performance measurement, in particular.

Organisation and management of research and development facilities – from cost to profit focus

In this publication, we present the main findings of a research project into differences in organisation, management and activities between R&D cost centres, semi-profit centres, profit centres, and independent R&D businesses. First, a theoretical framework is presented and then the empirical findings are reported. It is concluded that there are notable differences between cost and profit-oriented R&D structures relating to the degree of freedom in decision making on research management topics, the balance among types of R&D activities, strategy formulation, performance evaluation, marketing and management demands imposed on the capabilities and attitude of the staff. Furthermore, it is observed that semi-profit centres have the most challenging task as they are in an invidious middle position they have to bid for internal projects in order to cover their costs while their freedom to attract external customers or to use a cost plus transfer price is usually limited.

Towards a national design scoreboard: A model to enable comparison of performance between countries

Recognising the growing importance of design at a national level, this paper reports on the development of a suite of measures relating to national design performance. These measures are based around a simplified model of design as a system at a national level, developed through a workshop with government, industry and design sector representatives. Detailed data on design in the UK is presented to highlight the difficulties in collecting reliable and robust data. Evidence is compared with four countries (Spain, Canada, South Korea and Sweden). This comparison highlights the inherent difficulties in comparing performance and a revised set of measures is proposed.

Guest editorial: special issue on organisational and accounting change

Purpose – To introduce the special issue on organisational and accounting change. Design/methodology/approach – The editorial is very short, and introductory-only. Findings – The editorial provides and introduction to the special issue that comprises a collection of papers written by members of the European Network for Research in Organisational and Accounting Change (ENROAC). Originality/value – The editorial acts as a basic introduction to the papers comprising the special issue.