What To Expect From Your R&D Department

R&D department should help you innovate, they aren't just nice to have


R&D is of paramount importance for companies, regardless of their size or industry. For large organizations, research and development allows for continuous innovation and maintenance of their competitive advantage, whereas startups simply need their products to work as soon as possible, and according to investors' expectations. However, whether it's a lab, a full department, or a product development facility, R&D requires the right approaches.

R&D departments often exist to solve issues with product development or to breathe new life into existing product lines. However, before setting up a department, companies need to answer some questions first: Why do we need an R&D department? Is the product portfolio a short or a long-term one? How positive is the product performance forecast? Answers for these will allow companies to better plan the budget, analyze their capabilities, and find out what they need to focus on - research or development.

Stan Hanks, the CTO of Columbia Ventures Corp believes that there are three types of R&D: 'Big R and little D, little R and big D, and window-dressing.' It's important to rightly identify which approach is suitable in your particular case. Startups, for example, tend to focus less on the research and more on development. Rightfully so, because the functionality of their product development secures the future of the whole company. So whilst research is important, development is vital.

On the other hand, in some cases, companies can also focus more on research, which means their top priority is not to release the product and execute as soon as possible, but to analyze the long-term product capabilities and to what extent the product can evolve. The model is not suitable for all, as research and forecasting require time which costs money. The company can go ahead if it has enough cash reserves to extend the research and if there is confidence that in they will still be in the market in the long-term.

In the last couple of years, we could witness promising unicorns fail and established companies stagnate due to their inability to react to external threats and circumstances. Let's take the digital industry as an example. Whilst in the beginning of the internet era, everyone was focusing on enabling access to the network, the appearance of the internet 2.0 then required companies to provide online services if they wanted to stay relevant. And when the social internet arrived, the whole concept of 'being connected' evolved to a new level, where essentially everything has to be user and access friendly. Today's advanced digital technology may seem a given, but when thinking in more depth, rapid changes in consumer preferences and market requirements eliminated many companies who thrived in the past. Those with strong R&D departments, agile strategies, and a pinch of luck managed to survive.

As technology continues creating new opportunities and challenges, it's important to remember that even with the best initiatives and plans on hand, tomorrow can bring a change that will require companies to start new ideas from scratch, and with established R&D departments, this becomes considerably easier.

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