By Ken Durazzo, VP, Technology Research and Innovation, Dell Technologies
According to R&D World magazine, global spending on research and development (R&D) was projected to reach $2.4 trillion in 2020. To put that number into context, the magazine’s first issue, released in January 1959, forecasted global R&D spend at a mere $12 billion.
Likewise, according to research published in the Harvard Business Review, up until the 1970s, companies spent the same amount on advertising as they did R&D. Today, companies spend approximately 10 times more on R&D than advertising.
The increase in spending coincides with the emphasis we, at Dell Technologies, place on R&D. In 2020 alone, we invested more than $4 billion in R&D. That sounds like a lot and indeed it is… your business needs may differ but the fundamentals that surround a successful R&D program are translatable. A formidable R&D program can be a company’s secret weapon, particularly when the going gets tough. When facing challenging times, the last area companies should claw back money from is their R&D budget as it represents the future state of the company.
So, what can executives do to guarantee the success of their R&D program? Here are my key tenets for success:
1. Establish a Focal Point and Guideposts
From the outset, consider what is and isn’t out of scope, and then align your teams (and their skillsets) accordingly. This analysis should be both inward- and outward-looking. You should identify the most strategic moves for your company and what best supports your objectives, as well as assess your customers’ palette for change and whether they would trust bold new plays in new adjacencies.
Then you need to articulate a shared vision that recognizes where you are now and where you want to go. If the leap is too far between the two, you should try to understand if it is possible to bridge the gap. By referring to a standardized innovation model, you should be able to determine whether an R&D initiative sits near or far from your core offerings, and, as such, whether the company should support an expansion effort.
Then communicate what areas are ‘in-scope’ to your teams. Let your teams know if a particular technology is ‘off limits’ or if the company needs additional focus in a different area. This provides a clear line of sight for research and development and funnels your effort to where it needs to be.
Ultimately, you need to maintain a laser focus on the core problem you’re trying to solve, the extent of your capabilities, and the needs of your customers.
2. Drive a Cadence
An inward survey of your capabilities should also encompass a review of how your organization operates, and what cadence would create alignment between your research and your sought-after business outcomes. For example, if your company is interested in things that could be material in three years, then it isn’t prudent to focus on things that are seven-10 years out.
I often advocate a multi-year vision, segmented into much smaller executable phases. Each phase contains success metrics by which I can benchmark the team’s progress. This enables my team to decide the best course of action and commit, until we can reassess again at the next checkpoint. At each goal post, we review our progress.
Generally speaking, these are the guidelines we use when assessing whether to execute the next phase of a project; if we’ve been successful, we go forward with the plan. If we haven’t been successful, but can see a way to self-correct, we shift accordingly. If we’ve hit a wall that we can’t surmount, or it’s no longer fruitful to invest energy in surmounting, we stop. This iterative approach allows us to gather intel, recalibrate regularly, and improve—which leads me to my next tenet.
3. Create Expectations for Success and Failure
Despite a company’s best efforts, an R&D attempt can result in a failure that does not allow for forward movement. That’s okay. In fact, it’s better than okay. Businesses need to cultivate a culture that is comfortable with learning through failure. After all, impactful R&D requires businesses to push boundaries. If you’re not failing, you may not be pushing hard or fast enough to achieve a breakthrough.
However, in celebrating a failure, organizations must document where things went awry and learn from them. R&D should never fail the same way twice. Equally, by chronicling these happenings, you may stumble across something surprising, staggering even, as Sir Alexander Fleming famously did with the accidental discovery of penicillin.
The speed at which companies learn from trial and error is also important. Fail, stop, and pivot in quick succession—otherwise, the program will stagnate.
The fail-fast-then-succeed thinking is gathering momentum, but it’s not prevalent yet. According to the 2020 Dell Technologies Digital Transformation Index, just 29 percent of businesses globally actively encourage this mindset. So, there is work to be done here.
4. Cultivate a Love for Problem-Solving
Whatever you do, don’t put processes before people and don’t micromanage your talent. Rather, empower your critical thinkers—those in the company who know the problems facing the business extremely well. Creating a safe space for experimentation is vital to staying relevant in a world that’s moving fast.
The key is to create a structure in which your people can do their best work, without suffocating their ingenuity. Related to this, free them from getting drawn into the minutiae of the technology that’s being heralded as the solution to the problem they’re trying to solve. Of course, technology plays an instrumental role here, but technology evolves rapidly. Rather, dissect the problem first. Once you achieve that depth of understanding, the ideas will flow, and they won’t be contingent on a feature here or there, but a new way of working—a paradigm shift that could take your business to a new level.
Remember, Overnight Success Takes Years
R&D organizations are a form of an organism. You need to cultivate the type of environment you desire and constantly ‘feed’, nurture and motivate it to move fast, learn and focus on results. Stamina is key.
The internet didn’t originate from a big bang. Rather, it developed over decades, from a series of events—including countless failures and mishaps—building upon each other to coalesce into the form we recognize today. For instance, engineers didn’t stop with dial-up internet. They continued to build, learn and adapt to build the internet of today. We’re now on course to achieve public and private 5G, the first highly customizable network transforming mobile technology from connecting people to people to connecting people to everything.
To create efficacious R&D you need an honest appraisal of where you are, where you want to be, and people on your team with stamina, grit, and vision.