A F100 manufacturer was concerned that competitors were gaining market share through the strength of their targeted new product portfolios. They wanted a more effective R&D allocation process (and supporting decision tools) — as the existing process, overly reliant on estimated financial returns, resulted in prioritizing/funding “incremental improvements” over more innovative projects, and misalignments with strategic priorities.
SOLUTION:
Working closely with process stakeholders, eos consulting re-focused their R&D funding goals and process from being solely focused on value to the company (ROI, etc.) to a triad of:
- value to the customer
- value to the company
- alignment with market segment strategies
Additionally, we developed rigorous assessment methodology/tools to assess and concisely communicate each of these, including:
- categorization of each investment program (breakthrough innovation, differentiated value, me too, low value)
- dashboard containing specific factors/categories and measurement criteria — weighted to reflect the relative importance to the customer
- global matrix and aligned executive team regarding market segment priorities (lead, compete, participate, abstain)
RESULT:
During a secular downturn, the company was able to trim R&D spending while improving strategic alignment. Development programs brought to the fore in the new process are coming to market and taking share.