Measuring R&D Performance
I saw some really interesting R&D performance measures recently at a highly innovative food producer. It made me think that the lack of a measurement culture in R&D is really just historic, rather than due to some intrinsic characteristic of innovation.
There is definitely some truth in the idea that Development Engineers don’t measure performance and don’t like the idea of it. Contrast this with Production Engineers, who measure everything and live and breathe these results. I think this difference is simply cultural.
Anyway, it seemed to me that the first key was to truly see New Product Introduction as a process, rather than a series of projects, and once you are in that mindset you can start measuring process performance. Average leadtimes, On time launches, NPV achievement, these are all good R&D performance measures, but they are also somewhat retrospective, only really producing results for passed projects.
So the thing that interested me most at the Food Company was that they didn’t just use these ‘top down’ performance measures. Each development team had also set up their own “bottom up” measures, tackling the local and immediate issues they faced. Examples included days queuing for the pilot plant, lost yield during production start-up, days lost waiting for market feedback. They then reviewed these measures at a weekly team meeting and used them to improve their own local processes.
Sometimes, it seems, it’s more useful to measure something small, local, but fixable, than to present teams with high level performance measures they don’t feel they can control.