kHUB post date: October 19, 2021
Read time: 4 minutes
Some companies view R&D and product development as a cost of doing business. It’s one more function to support with cash so that the company can continue to exist. Other companies, however, recognize that R&D is an investment in their futures, and rather than merely enable a company to exist, it allows a company to grow and prosper.
Toyota has stated that 95% of a car’s profit is decided in R&D when the product is designed. In my 39 years at the Goodyear innovation centers, I was able to validate the Toyota assessment. The right innovation — the right product at the right time in the right place — has a huge impact on a company’s top and bottom lines, often much larger than companies think will occur.
For R&D to deliver what is needed to grow companies into winners in their industry, it takes:
- A superior product development/innovation process: The right innovations are rarely developed by chance or luck. There needs to a well-defined and documented process in place that is creative, fast, agile, predictable, and efficient, one that delivers on time and on target, every time. Without a good innovation process and standards that define it, companies waste a lot of time, resources, and talent and, inevitably, fail at creating new ideas and turning them into successful products.
- Cross-functional collaboration: Synergetic cooperation between all parts of the company — R&D, manufacturing, sales, finance, etc. — focuses an organization on value for the customer and all company stakeholders, and it ensures that all parties collaborate with and commit to support R&D and each other for maximum leverage out of new and innovative products. Collaboration breaks down unproductive silos and establishes a cohesive overlap of creativity, manufacturability, and ability to sell new goods and services throughout their lifecycles.
- Agility: Companies must embrace a willingness to change based on market needs, opportunities, technology, and the economy as well as what their own innovation efforts reveal. Agility is being able to capitalize on these signals by taking the right risk at the right time. But agility needs speed, which lean and operational excellence deliver to the innovation creation process along with better cash flow, ROI, and faster learning. The nemesis of agility is an unwillingness to freeze or pivot a project, a misguided belief that more investments and resources can somehow turn around a failing idea, which instead exhausts resources that agility can leverage.
- An engaged workforce: Every leader, manager, and employee throughout the ranks and the width of a company contributes to winning innovation. This may also be the most difficult component of winning innovation to achieve, especially in companies where a command-and-control culture and multi-tiered organizational charts are prevalent. To build an engaged workforce requires a well-planned and articulated strategy in which everyone knows why a new way is needed; what must be accomplished (company and R&D goals); and how winning innovation is to be accomplished (i.e., solutions developed by those doing the work). In addition, a culture defined by respect and care for people on all levels is necessary for an engaged workforce to flourish.
There are many principles that support these components and that can guide companies on their journey toward a winning organization. They’re found in lean thinking, operations excellence, lean start-ups, people-centric lean, and many more methods. And don’t discount a company’s existing, proven practices. The right principles — both old and new — for an organization all build on each other and create a system with a rare synergy.
It takes quite a lot of change for most companies to get all of this accomplished. Change is always difficult and, in order to be sustainable, it has to be managed in an organized process, engaging leaders and associates in the journey. And this journey never ends. Improvement is only replaced by more improvement in products, services, and processes, which will keep a company ahead of the rest of the industry through a succession of winning innovation.
About the Author:
Beginning in 2005, Norbert Majerus implemented a principles-based lean product development process at the three global innovation centers of The Goodyear Tire & Rubber Company. For more than a decade he was Goodyear’s lean champion in research and development. In 2016, Norbert published his first book, Lean-Driven Innovation, which received the Shingo Research Award. Also in 2016, with Norbert’s guidance the Goodyear R&D organization applied for and received the AME Excellence Award. Norbert, born and raised in Luxembourg, has a Master’s degree in Chemistry from the Universitaet des Saarlandes, Saarbruecken, Germany, and worked most of the disciplines in the Goodyear innovation centers in Luxembourg and Akron. Norbert has taught workshops and has spoken at many conferences in the United States and other countries. Since retiring from Goodyear in 2017, he continues to share his extensive lean expertise via norbert majerus consulting and as a board member of LPPDE (Lean Product and Process Development Exchange).