What’s your approach to R&D?

Most companies spend their R&D budget planning incremental stepping stones from today to 3 years from now. It makes sense and works if you’re smart and lucky, and it can yield 10% improvements. However, this way of working is just table stakes. Everyone is doing it, and it doesn’t help you prepare for 10 to 20 years in the future.

For me, incremental R&D feels like modern product development. It’s not the kind of R&D that changes the world, and it’s definitely not enough to keep your market edge in disruptive times.

In addition, this linear approach to planning is a little dogmatic. It prevents you from exploring and discovering alternate future paths that the competition is charting.

So what is this new R&D, and how do we make it work to be successful in the future?

Risk & Determine.

Risk

In disruptive times, you need to explore radical business models, new user experience paradigms, etc. But, exploring every idea would eat all of the profit. You wouldn’t be able to deliver shareholder value in the short term. We believe that running pilots with people that are pushing the limits aggregates and mitigates these risks.

Pilot engagements enable teams to walk far into possible future paths to see what might be. Sony’s consumer video camera group is a good example of what happens when you are not teaming up and running pilots. They thought they were king. Then they were caught flat footed when fanatics started putting cameras in Ziploc bags for surfing and strapping cameras to their helmets for jumping off cliffs.

Sony ignored the teams pushing the limits. GoPro didn’t.

Phones stopped being used for phone calls and became disrupters too. Remember BlackBerry and Nokia?

How do we aggregate and mitigate risk?
We invest in pilots:

  1. Get to know and study the people who are pushing the limits
  2. Partner with them and make prototypes from the future
  3. See how they use the prototypes to understand the future
    It teaches us about future human nature, future values, and future business.

Determine

Piloting future scenarios with partners in innovation enables you to determine your own future. But, you have to be determined.

Both feet in the boat. You have to find the new world. It’s not obvious, there are no maps. You can’t half-commit. You must go far enough away to get over the horizon. It doesn’t work if you journey to cross the desert and run out of food halfway there. You’ll turn around and come back starving and half dead. Determination isn’t easy, but Astro Teller at X frequently reminds us that it is easier to make 10x improvements than 10% improvements.

When you get over the horizon, you will learn the values and economics of the future world. You won’t be guessing anymore. You will have first hand knowledge to confidently plan stepping stones from the future back to today. Working in the opposite direction of typical “R&D” teams, you will be prepared to build what you need to be relevant in the future.

Making it Work

Successful pilots have three phases:

  1. Explore beyond the horizon of what your industry thinks is the future (the horizon is the limit of your current vision)
  2. Learn how to exploit the new resources that are beyond the horizon
  3. Come back to explain how to scale the exploitation to ourselves, our business, and our industry with actions instead of PowerPoints

Ultimately disruptive technology changes behaviors and behaviors guide technology. Engineering is about the relationship of things to things, social science is about people to people, design is about the relationship of people and things. To stay relevant and be a part of the future we have to explore how people and technologies can change the world.


Mickey McManus, Chairman and Principal of MAYA Design, contributed to this article and is co-author of the book, Trillions: Thriving in the Emerging Information Ecology. He is the keynote speaker at PIB 2016: The Gray Matter Systems Annual User Group Conference August 9-11.

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