2015

There are new techniques and metrics just introduced by McKinsey and CFO Magazine, and an industry-generated metric from Broadcom entitled “R&D Efficiency,” during the spring of 2015. They all focus on measuring overall R&D productivity, output over input. One of them has a good chance of becoming mainstream in the next five years, just as Return On Innovation (early 2000s) and the Vitality Index (1988) did. As well, there has been the equivalent of a sea change in the metrics companies use since the market crashed in 2008. It became evident in 2013 and is ongoing. Did you reorient your metrics, by about 25%, towards business and financial output in the past five years?

This Summit covers everything an executive needs to know relating to measuring R&D, Advanced Development, Product Development, Innovation, Technical and Functional Competencies, R&D Productivity, and R&D-related Intellectual Property. We will connect the numerous metrics going three levels deep into the R&D-Product Development organizations to the handful of KPIs needed by the CEO for financial reporting and investors in a single one-page portfolio.

The selections of metrics are different for every company, and highly strategy dependent. You get what you measure. Don’t worry, you’ll get to include any of the metrics you measure today in your final workshop solution. GGI is consistently told by leaders, who enter believing that they have strong metrics, that they have a great many things they are going to discuss doing and undoing when they get back to their office.

GGI has been a recognized thought leader in measurement since the early 1990s. We have introduced more than a handful of metrics that companies use today. We have played a role in making a number of great metrics, created by others, become mainstream across industries. For eighteen years we have done primary research on corporate, project, technical, functional, innovation, productivity, and IP metrics being adopted by corporations. For twenty-five years we have kept our finger on the pulse of what is being done by others, and on emergent metrics that haven’t significantly penetrated industry (yet). This enables participants to determine a competitive advantage set of KPIs and their necessary supporting measures. Our Summit is as close as you will get to internalize the metrics body of knowledge in a single event.  Every Summit is current.

Senior executives wishing to put themselves and their colleagues in a better position to direct and drive product creation and commercialization should strongly consider attending. Many participants have said, “this Summit covers everything an officer or senior manager needs to know on the subject of Metrics.”

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Participant Companies.

Press Release.

Does your company tightly control its manufacturing operations and work centers? If so, each work center is measured and the company knows exactly how much good and bad product the center produces. These figures are the center’s “yield.” Of course, companies aim for 100% positive yields from each center. And, products which have been manufactured for a long time often approach that ideal.

Now, let’s take this same basic concept of a center’s yield and apply it to product development. There are series of centers that take new product concepts and bring them to market. But for these, 100% yields are not expected, nor would we wish them to be. Product development is much more probabilistic. Not every product brought to market is expected to be a financial success. If it were, innovation would dry up as companies would take no risks.

Many studies over the past five decades have found that somewhere between 35% and 55% of products are not financial successes. That figure can be as high as 90% in high-tech and consumer products. Those high failure rates create an opportunity to improve yield without risking the loss of innovation.

 

New Product Pipeline Yield Example

 

There are opportunities in most companies to get more revenues and profits from the product pipeline without increasing investment or headcount. Those opportunities have one common element, better decision making.

Maximizing Revenues from the New Product Pipeline [Machine Design – May 2015] discusses decision making in corporate environments that have too many ideas to choose from, too few ideas to choose from, and the financial results of both good and bad pipeline management. Bettering management of the pipeline often results in double digit percentage increases in revenues and profits from new products.

NEEDHAM, Mass. — (BUSINESS WIRE) — March 23, 2015 — GGI will be holding our 19th Summit on Metrics for corporate, business, research, and product development executives during the last week of August at the Four Points by Sheraton – Norwood Inn & Conference Center. The location of all GGI Metrics Summits, this conference center is conveniently equidistant between Boston and Providence airports.

The 19th Summit consists of two seminars, and a workshop that is interspersed with micro seminars. In three days, we will cover the wide range of topics necessary to comprehensively measure corporate investments in research and development. The culminating workshop will result in a take home draft, using GGI’s Linked Metrics Portfolio™ method, of a portfolio of metrics that measure three levels into R&D and produce a handful of metrics for the CEO’s needs. Numerous corporations use our approach that meets the specialized needs of project-based environments while producing business-level metrics that feed into corporate scorecards and financial statements.

Tuesday focuses on the hardest to quantify corporate innovation measurement issues: Risk & Complexity, Hurdle Rates, Trade-Off Analysis, Capacity & Pipeline Management, and the few Metrics that capture the financial performance of R&D as a whole. It concludes with a review of the Top 101 metrics that corporations use to oversee their R&D investments.

Wednesday morning we generate “Proactive” forward-looking R&D metrics to guide the culture of the innovation environment. Discussion then switches to early metrics that are “Predictive” of the outcomes of R&D investments.

The Workshop begins in the afternoon and continues Thursday. Participants organize into teams based on the commonality of their corporate R&D strategy. A common strategy is more important than a common industry at the financial reporting level of corporations. Innovator, Platform, Balanced, and Follower strategy metrics differ. Teams determine their “must have” metrics. Then, a series rounding-out topics are interspersed into the workshop. These micro seminars cover metrics for Applied Research, Advanced Development, Intellectual Property, Technical & Functional & X-Functional Disciplines, Software, and Supplier Management.

The Summit wraps-up with team presentations of their draft Metrics Portfolios, and their explanations on how their metrics support their chosen R&D Strategy. A discussion on Implementing Metrics concludes the event.

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NOTE:  Inadvertently, the actual Business Wire press release title was issued with the dates August 27-29.  The correct dates are August 25-27, Tuesday to Thursday, as the title in this blog post correctly indicates.

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19th R&D-Product Development Metrics Summit

Early Bird Rates conclude at the end of business Pacific Time on Friday, June 26.

Strategy is a wonderful word. It sounds great in meetings, as does its adjective form, strategic. Everyone’s mind snaps to attention the moment either word is used. Then everyone nods, saying we have got to have the right strategy. And if some plan is called strategic, then we must certainly do it.

Management and consultants throw the s-word around casually all the time. Too much of the time, these folks are actually talking about tactics; or even worse, operational levels. There are instances in which both tactics and operational items are strategic. But, usually they are not.

Certain companies and service firms do understand how to create strategies and then put them into effect. People who have worked for those companies see it immediately and their thought processes are changed for the rest of their careers.

Product road maps and product portfolio strategies, and their enforcement, are important. The only companies that systematically prosper without a good portfolio strategy either out-service their competition, sit at the top of the heap in operational excellence and cost management, or are lucky enough to be in a high-growth industry where management can do no wrong.

Does Engineering Work for Sales or Management? [Machine Design – March 2015] discusses the four primary product portfolio management strategies that companies utilize, and the degree to which management polices adherence to its’ stated strategy. Strategies used by Apple, Microsoft, and Harley-Davidson aftermarket suppliers illustrate the key points.