Why You Shouldn’t Have a Research Department

I know a lot of product development organizations that would love to have a research department which would bring new technologies directly into the development organization. They would be up-to-speed on the latest emerging technologies and be constantly trying new things. And when they found something particularly good, it would make its way into the development team.

Unfortunately, technology research doesn’t work, and here’s why.

Fresh out of school I went to work for a Fortune 500 company in their technology research department or “labs” as they called it. It was great. We had every toy imaginable and incredible resources at our disposal. Need a physical mockup of a monitor bezel? No problem, we had a staffed model shop waiting to build it for us. Want someone to wire up that printed circuit board? Absolutely, that was easy to have done. Need to buy some equipment to try a new technique? It was there next week.

It wasn’t long after I joined the labs that I started asking people what they were working on. It was amazing stuff – exciting and out there. Real cutting edge research. I soaked it up and learned everything I could. And then I naively asked, “What products will it be used for?” I got a blank stare.

“I don’t know.”
“Well, when will you turn it over to the development group?”
“I don’t know, it needs work.”
“How much could we sell it for?”
“I haven’t really thought about it.”

I didn’t understand why we were researching something that we didn’t know the application for. I imagined the conversation was an isolated case, but as I spent more and more time among the 220 researchers, it became a familiar refrain. Few, if any, of the projects ever made it into products and, not surprisingly, the labs were soon was dramatically cut in size.

Fast forward 25 years and I was now leading research and development for another Fortune 500 company. The first week I wanted to find out what the technology research group I inherited was working on. The responses from them to my questions were largely the same.

“Why are you developing this technology?”
“We found a new material.”
“Will anyone want it?”
“Don’t know.”
“How much would it cost us to develop it?”
“Quite a bit more, but it’s really hard to predict.”

Once again, after years of research, few technologies had been rolled into products that actually increased the bottom line.

I know what you’re saying – it’s important to keep on the bleeding edge of technology or you’ll fall behind. And you’re right, it is. But, there are better ways to do it.

Technology research without understanding the human and business aspects results in technology in search of a market and business model, which is often not there. Remember that in a “for profit” company, your entire R&D engine needs to be focused on finding opportunities to increase profit. In order to be profitable to the business, every project whether called research or not should have:

  1. A technology goal,
  2. A financial goal, and
  3. An end-user goal.

For instance, a project might be to use a new material (technology goal) to increase production yield by 25% (financial goal) and make the product easier to hold (end-user goal). You don’t always have to improve all three, but you need to still have goals for all three. You might decide your goal is a new plastic that gets a 20% decrease in floor mopping time by increasing the costs of goods sold (COGS) no more than 2%.

I guarantee that if you set specific technical, business, and human goals for your development projects, you’ll see a profound improvement in the number of developments making it to market. Oh, and by the way, you’ll stop calling it “research” and start calling it “development.”

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