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GGI RapidNews R&D Product Development eZine: Volume 9, Issue 11 - December 29, 2008
In This Issue GGI NEWS AND NOTES 2008 GGI BIENNIAL SURVEY FINDINGS - Part 5 of 5 - Top Corporate RD&E MANAGEMENT PRODUCTIVITY - Business Week 2008 Best Books On Innovation BOOK REVIEW - How to Measure Anything GGI 2008 BIENNIAL SURVEY - Results Released May 15, 2008 THE WISDOM iSTORE FEATURED PRODUCT 40% OFF - 2004 Survey Summary THE WISDOM iSTORE NEW LISTINGS - No New Listings This Month BIENNIAL PRODUCT DEVELOPMENT SURVEY - 2004, 2002, 2000, 1998 Results GATEWAYS TO KNOWLEDGE - A Monthly Feature CALENDAR OF INDUSTRY EVENTS - A Monthly Feature TELEVISION EVENTS - Alexander Haig's World Business Review --------------------------------------------------------------------- GGI NEWS & NOTES
As 2008 draws to a close, the RN Editors would like to take this opportunity to thank our readership for their publication suggestions, insightful comments, and thoughtful critique this past year! We appreciate your time to read our scribing, and we hope and trust that RN brings value to you!
We also hope you and your family's holidays were safe, happy, and restorative! We look forward to writing for you in 2009, RN's 10th year of publication. 2008 GGI BIENNIAL SURVEY FINDINGS - Part 5 of 5 - Top Corporate R&DE Metrics Research Execution: The study was conducted by a combination of mailer surveys, and e-mails with links to download web sites. 7094 mailer surveys were distributed, 476 surveys were downloaded from web sites. Of the total of 7570 surveys distributed, 1256 mailer surveys were returned as undeliverable. Net total surveys distributed was 6314. A total of 218 completed surveys were received. Four (4) surveys were determined to be invalid and were eliminated. Five (5) duplicate responses were eliminated, yielding a total of 209 valid responses included in the 2008 results database. The response rate was 3.31%.
Research Participants: About two-thirds of respondents were from public companies, about one-third were from private companies. Over fifty percent had a title of Director or greater, less than 20% held a title of Manager or lower. Over eighty-five percent of respondents were from R&D-Product Development and/or Senior Management. About half of respondents were from companies with sales less than $.5B, forty percent were from $.5B to $5B, and twelve percent were greater than $5B. All industries were represented, including a number of software-only companies.
Research Description: The research was focused on areas in the Innovation Body of Knowledge where Innovation is "tangible," meaning that "it can be directed by executives and is actionable by employees." GGI's focus since 1998 is to investigate the actual processes and practices that companies use that cause their results. The five subjects GGI researched between August 2007 and February 2008 were:
1. Innovation Environment [RN July 08 Issue]
2. Innovation Processes [RN August 08 Issue]
3. Innovation Identity [RN September 08 Issue]
4. Innovation Tools [RN October Issue]
5. Top Corporate Metrics Used in Industry RD&E [This RN Issue]
Research Findings - Part 5 - Top Corporate R&D Metrics: The survey investigated the penetration and the degree of usage of 88 measures of overall/corporate-level R&D performance. This fifth research topic of the 2008 Survey is repeated by us in every Biennial Survey. We now have 10 years of metrics data, 1998-2008. Many of you may have seen snapshots of it in Industry Week and Management Roundtable's "Quick Insights."
In the 2008 research, there are 7 metrics that have penetrated more than 40% of industry.
79% R&D Spending As A % of Sales
63% Total Patents Filed / Pending / Awarded
60% Total R&D Headcount
56% Current-Year % Sales Due To New Products Released In The Past "N" Years
54% # Of New Products Released
49% # Of New Products/Projects In Active Development
42% % Resources/Investment Dedicated To New Product Development
In the 2008 research, there are a number of metrics that are being experimented with. The total number of metrics in use has increased, but companies are trying a great number of different metrics such that the penetration of any given metric remains low.
In the 2008 research, there are a number of interesting findings. Return On Innovation, a relatively new Corporate-Level metric that gets at the "productivity" [Output/Input] of R&D, has achieved a 25% penetration. It is calculated seemingly six different ways, but it is being calculated. Also of interest is Technology Licensing. Technology Licensing Revenues is now calculated by 15% of companies, and Technology Licensing Profits is now calculated by 11% of companies. A final interesting finding is the "general rise of metrics that measure profit versus sales." The number of different revenue metrics used by industry and the number of companies using them has dwarfed statistics for profit metrics historically.
Research Analysis: Closer examination of the Top 7 metrics reveals that most are "low velocity." Only the fourth and fifth metrics are high velocity for most companies. The fourth metric, also known as "3M's Vitality Index Metric," measures the revenues from investments in R&D. The fifth metric, measures the number of product releases that produce that revenue stream. These are the two good bottom-line performance measures among the group. [Patents will join the group of must have high-velocity measures in the next two decades.]
GGI has twenty-five years of experience with R&D and NPD Metrics. It is highly encouraging in this era of "innovation," and after ten years of specifically performing primary research on the subject, to see that there is experimentation and possibly some type of substantive change underway in the way corporations are approaching measurement these the past 3-4 years. The "Innovation" wave began roughly in late 2004, after years of Lean and Six Sigma "Execution" waves. These Execution metrics have stayed fairly constant over the years.
There is a clear trend on Profit Metrics of all types. Technology Licensing is on the rise, and so are its measures. The new emerging overall productivity measures, including Return On Innovation, NPD Efficiency, ROIE, and RVG, are all getting some play in industry. ROI [not to be confused with Return On Investment, which is an acronym problem] is the apparent winner so far.
Research Conclusions: Over a ten-year period certain things have not changed, such as the overall levels of industry penetration. There are still only a handful of metrics that have penetrated more than 40% of industry, and they have remained essentially the same for a decade in spite of all the emphasis on measurement. Productivity and Profit are definitely becoming more important, as is Intellectual Property and Technology Licensing.
MANAGEMENT PRODUCTIVITY - Business Week 2008 Best Books On Innovation
Condensed from 2008's Best Books On Innovation, by Reena Jana and Matt Vella, Business Week Magazine, McGraw-Hill Companies, Inc., 1221 Avenue Of The Americas, New York, New York, USA 10021, December 15, 2008, ISSN007-7135.
Criteria
In distilling the year's books into a top-10 of innovation-related titles, we didn't want to include every obvious business-press offering, or simply opt for publications with the word "innovation" displayed prominently in their titles. Nor did we want to choose something simply because it carried the imprimatur of a reputable press or the byline of a star author.
Instead, we asked ourselves whether a book had an original thesis, tapped into a trend that seemed clearly part of the zeitgeist, or simply provoked us, making us think differently about the world or how better to monetize, mix, or manage fresh ideas. Our goal was to offer a selection that in itself might seem unexpected and forward-thinking. Together, they make for a well-rounded (and heavy) bookshelf that provides a smart approach to defining and executing innovation today.
Findings
All in all, given the current popularity of blogs, wikis, and YouTube videos, there were a great deal of books published in 2008. Many of the top profile writers of today, such as CK Prahalad and Clayton Christensen, also published books in 2008.
On Innovation, there were also a slew of intriguing and truly thought-provoking books that crossed our desks that don't address the business concept of innovation directly but are worth mentioning. From the fragrance business to entertainment to science and marketing, some titles offered fresh thinking in specific areas, a useful exercise for anyone involved in innovation. These include The Perfect Scent: A Year Inside the Perfume Industry in Paris and New York by Chandler Burr; The Pixar Touch: The Making of a Company by David Price; Science Lessons: What the Business of Biotech Taught Me About Management by Gordon Binder and Philip Bashe, and Tribes by Seth Godin.
The Ten Best Innovation & Design Books of 2008 include Prahalad [RN October 2008], Christensen, and eight other authors.
RN Editor Note: Clayton Christensen published 4 books in 2008. Many RN readers follow his work.
BOOK REVIEW - How To Measure Anything
How To Measure Anything: Finding The Value Of INTANGIBLES In Business, by Douglas W. Hubbard, Copy right 2007, John Wiley & Sons, Inc., Hoboken, New Jersey, USA, 287 Pages, ISBN13 978- 0-470-11012-6.
Doug Hubbard is the inventor of Applied Information Economics [AIE], a measurement methodology that has earned him acclaim from Gartner, Giga, and Forrester. Formerly with Coopers & Lybrand, he has over twenty years in IT management consulting and the last dozen years using his AIE methodology. Mr. Hubbard figures out how to measure things that are hard to measure, such as items having a great deal of uncertainty or a widely scattered group of events.
The style of the book is friendly and approachable for people of all levels of math and statistics skills. Be sure however that you will see complex mathematical concepts discussed. One neat aspect of this book is how Mr. Hubbard abstracts from the complex math logic to the simple way to view the situation. Much like "stock picking software" gauges some key variables and trends and then makes a conclusion, this is the gauging of complex math to specific industry problems and questions. Enrico Fermi first popularized this field of measurement. His approach as to how to "estimate the number of piano tuners in Chicago" is still used in class rooms today.
Many RN Readers know that GGI has contributed to the field of measurement and metrics used by industry today. Mr. Hubbard's AIE methodology is absolutely useful, and his book does a great job of allowing one to see how it is used. And, he has the "can do" attitude on metrics. Some of his examples of situations where companies thought that something couldn't be measured, were eye popping as to how quickly something could be measured -- or at least reasonably estimated. There were definite information nuggets in this book that were worth having in one's business war chest. The book is not overly focused on the AIE methodology.
The Table of Contents is well done, allowing one to zero in on what interests them. RN Editors found ourselves consuming the book in a non-linear fashion. Also of interest are his "Calibration Tests," which are a series of questions that one might at first think impossible to answer. They effectively aid in making the case that the "seemingly unmeasurable" can in fact be quantified to some level.
For more information about How To Measure Anything or to order a copy of the book, please go to our Book Store which is integrated with Amazon.com should you decide to proceed further after seeing the book's information portrayed.
GGI 2008 BIENNIAL SURVEY - Results Released May 15, 2008
The 2008 Biennial Survey theme was "Tangible Innovation." Much is said and written about the "perceived to be somewhat soft" topic of innovation. GGI's research focused on selected aspects of the innovation body of knowledge that are tangible and can be actively managed by companies and their executives. We also dedicated one question to refresh our ongoing research of the past decade on the usage of R&D and product development metrics and analytics by industrial and high tech companies. Thank you to the 209 people who responded for their companies in our biennial primary research project of North American industry.
The major subject areas we researched are:
Innovation Environment
Innovation Processes
Innovation Identity
Innovation Tools
Top Metrics Used By Corporations For R&D-Product Development
Industry Week has recently published the "Top 10 Metrics In 2008" and contrasted them to our research from 1998 to identify the changes during the past decade. McKinsey & Company, Texas Instruments, Rockwell, Kimberly Clark, Pepsico, JDS Uniphase, Shure, Curtiss Wright Flight Systems, and Datacard are representative of companies that use market research from GGI.
For more information please visit our 2008 Biennial Survey web site. Here you can find our Research Description, Survey Questionnaire, Product Description, Product Brochure, and Tables Of Contents for the reports we publish.
We have two published reports available that address each question of the research across the population of respondents. MR42 is entitled "Summary" and includes text and full color graphics for each question. MR41 is entitled "Highlights" and includes just the text portions of MR42. All reports are available in hard copy, or electronic.pdf format for posting on company intranets, in the Primary Research section of The Wisdom iStore.
THE WISDOM iSTORE FEATURED PRODUCT 40% OFF - 2004 Survey Summary
There are no new listings this month.
BIENNIAL METRICS SURVEY RESULTS 2004 Product Development Metrics Survey - Product Selection, IP Management, and Top Corporate Metrics: The Summary Report (MR32h) and Highlights Report (MR31h) for GGI's 2004 Biennial Product Development Metrics Survey are now available for purchase by the public through GGI's Wisdom iStore. These reports are completely based on primary research performed by GGI researchers. The research includes 202 respondent companies. There was a 5% response rate. McKinsey & Company, Texas Instruments, Rockwell, Kimberly Clark, JDS Uniphase, Shure, Curtiss Wright Flight Systems and Datacard are representative of companies that purchase market research from GGI. The 2004 Survey focused on the following five areas of product selection and IP management:
We have already shared many results with GGI RapidNews readers since we began this line of business in 1998. 2004 Survey results ran in six RN issues, RN V5I11 - RN V6I5, which may be found in the RN archives, along with results from prior years. Some additional complimentary information about the survey is available: The three commercial versions of the survey results that we currently offer for public purchase are:
1. 2004 SURVEY HIGHLIGHTS: A text-only report (75 pages), including the full text of all the results and analysis of the survey population analyzed as a whole, and Individual sections of the research reports, as well as logical combinations of sections are also available. All reports are available in printed or electronic versions. These reports are available in the Market Research Section of The Wisdom iStore. 2002, 2000, 1998 Product Development Metrics Survey: The Summary and Highlights Reports for GGI's prior Biennial Product Development Metrics Surveys are also available for purchase by the public through The Wisdom iStore. Information about the purpose and focus of prior surveys may be found in our Biennial Survey Archives. GATEWAYS TO KNOWLEDGE GTK- Gateway To Knowledge is a DIRECTORY OF THOUSANDS OF LINKS to providers of engineering, purchasing, and manufacturing technologies and services. If you hit the right subjects, it is more useful than a search engine! The "main entrance" to GTK can be found at: http://www.goldensegroupinc.com/gateway/index.shtml For those of you that do not want to go through the main entrance above, some of the Gateways that we believe you will find useful or entertaining are highlighted below. Technology Providers
CALENDAR OF INDUSTRY EVENTS GGI's Calendar of Industry Events contains an up-to-date listing of links to Conferences, Seminars, Distance Learning Centers, Colleges & Universities, Executive Education, and Corporate-Sponsored Universities. The calendar has just been updated with 60 upcoming conferences and seminars throughout 2007. The categories we follow are: The categories of conferences, seminars, and distance learning are further organized into the following subject areas: If you are looking for a conference or other learning opportunity, check out the Calendar. This free service for our readers is front and center on GGI's Home Page. Or, go directly to the Calendar of Industry Events MEGA Gateway.
TELEVISION EVENTS Alexander Haig's World Business Review: Brad Goldense has made several appearances on Alexander Haig's World Business Review. Streaming video is available for all shows, which aired on August 4, September 29 and December 15, 2002 and on May 20, 2003. See below for details. May 20, 2003 Broadcast of September 29th In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment is available on GGI's web site. December 15, 2002 In-Studio with Alexander Haig (7.5 minutes) on CNBC paid programming: Streaming video for this segment is available on GGI's web site. September 29, 2002 In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment (as well as the entire 30-minute show) is available on GGI's web site. August 4, 2002 On-Location at GGI (3.5 minutes): This On-Location field report is available in streaming video on GGI's web site. The web page includes links to download a streaming video player, if you do not currently have one installed on your computer. For more information on any of Brad's appearances on television, go to: http://www.goldensegroupinc.com/ggi-goldense-product-development-tv-television-broadcast.shtml. --------------------------------------------------------------------- GGI RapidNews is an e-mail publication from Goldense Group, Inc (GGI). Its subject matter includes survey findings, company news, book and article reviews, key industry conferences and R&D information of interest to clients and associates. Please send communications to rn(at)goldensegroupinc.com. Thank you. | |||