R&D TODAY: ADDRESSING AND ENHANCING RESEARCH & DEVELOPMENT’S EFFECTIVENESS CNI’s Journey, Mistakes, and Lessons Learned Ke...
In other words… <ul><li>How do we make R&D  more  Effective? </li></ul>
Before that… <ul><li>How is R&D  not  effective? </li></ul><ul><li>Top Down – Process problem </li></ul><ul><li>Because I ...
Contents: <ul><li>How do we make R&D more Effective? </li></ul><ul><ul><li>Know Your Business </li></ul></ul><ul><ul><li>R...
So…What is your Product? <ul><li>Research  -> Develop -> Sell  -> Improve </li></ul><ul><li>Coffee? </li></ul><ul><li>Sham...
R&D For What? R&D Product Process
A1. Know Your Business The anchor for all decisions
About: CNI <ul><li>18 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Exp...
Intro: MLM <ul><li>Sell through people </li></ul><ul><li>Relationship & people skills </li></ul><ul><li>Compensation Plan ...
Intro: CNI <ul><li>CNI’s Business Model background </li></ul>Factory CNIE DC SP Leaders Customers R&D
Know Your Business <ul><li>What are the Implications? </li></ul><ul><li>E.g. IKEA </li></ul><ul><li>E.g. CNI </li></ul>
Know Your Business <ul><li>“ The Product is Not the Product” </li></ul><ul><li>What is the customer really buying? </li></...
What are they really buying? Product value Services value Personnel value Image value Mental cost Energy cost Time cost Mo...
What are they really buying? <ul><li>&quot;Exactly what I need&quot; </li></ul><ul><li>Customized products </li></ul><ul><...
Strategy: Value Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Leaders , Michael Tr...
<ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li...
What does the Customer want? * Treacy & Wiersema,  The Discipline of Market Leaders , 1995 Product/Service Attributes Rela...
What does the Customer want? * Treacy & Wiersema,  The Discipline of Market Leaders , 1995 Product/Service Attributes Pric...
What does the Customer want? * Treacy & Wiersema,  The Discipline of Market Leaders , 1995 Product/Service Attributes √ Br...
What does the Customer want? * Treacy & Wiersema,  The Discipline of Market Leaders , 1995 Product/Service Attributes √ √ ...
Strategy: Value Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Leaders , Michael Tr...
Strategy: Value Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Leaders , Michael Tr...
The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li...
Business Situation vs. R&D Upturn Flat Downturn Fight Complacency Sharpen Edge Keep Momentum Conquer NPD Cycle Time Improv...
A2. Research Lies. Deception. Statistics.
Problem… <ul><li>“ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting t...
‘Input’ Filters Mkt Rsc R&D Research Development Filter Filter Filter Marketing Filter
Information Drifts (1/2) <ul><li>Availability Drift: Looking for convenience </li></ul><ul><ul><li>You give more weight to...
Information Drifts (2/2) <ul><li>Selectivity Drift: Picking your priorities </li></ul><ul><ul><li>You screen out informati...
A3. Reverse Marketing What we can vs. What we need
What we needed <ul><li>The birth of Malaysia’s 1 st  Tongkat Ali Ginseng Coffee </li></ul>
The “Old” Days Invent R&D Build Manufacturing Market Marketing Sell Sales
The “New” Days Invent Build Market Sell R&D Manufacturing Marketing Sales
Marketing 101 Product Promotion Pricing Place 4Ps
Marketing & R&D Features Brand Target Logistics Product Promotion Pricing Place 4Ps
Marketing & R&D Features Brand Target Logistics Price Promotion Place Product
Brand and Positioning <ul><li>For who? </li></ul><ul><li>Your Offer? </li></ul><ul><li>Key Differentiator? </li></ul>
A4. Align Running in the same direction with the proper resources
Strategy: 4-Wheels Philosophy Corporate  Objective Corporate Strategy Structure Resources Leadership Person
Strategy: Framework <ul><li>Leader vs. Innovator </li></ul><ul><li>Bloom vs. Prune </li></ul><ul><li>Breakthrough vs. Incr...
Strategy: Framework <ul><li>Org Structure </li></ul><ul><li>Job Design </li></ul><ul><li>C&B </li></ul><ul><li>Policies & ...
Strategy: Framework <ul><li>Tools </li></ul><ul><li>Physical facilities </li></ul><ul><li>Peer support </li></ul><ul><li>I...
*Funding & Allocation CNI’s Performance Market Potential <ul><li>Sell Outside </li></ul><ul><li>Sell IP </li></ul><ul><li>...
Strategy: Framework <ul><li>Vision/Mission/Philosophy </li></ul><ul><li>Leadership Style </li></ul><ul><li>R&D importance ...
Strategy: Framework <ul><li>Specialist Career Ladders </li></ul><ul><li>Competencies** </li></ul><ul><li>Co-habitation </l...
Strategy: Framework Philosophy Corporate  Objective Corporate Strategy Structure Resources Leadership Person
B. R&D Today -> RD&D R&D in Totality
R&D Today -> RD&D <ul><li>Garnier </li></ul><ul><li>Digi </li></ul>Design Point 1: Designed to SELL Design Point 2: Before...
R&D Today -> RD&D <ul><li>CNI Waterlife </li></ul>Design Point 1: Designed to SELL Design Point 2: Before-After R&D
R&D Today -> RD&D <ul><li>R esearch,  D evelopment &  DESIGN </li></ul><ul><li>Features </li></ul><ul><li>Benefits </li></...
R&D Today -> RD&D <ul><li>R esearch,  D evelopment &  DESIGN </li></ul><ul><li>Function </li></ul><ul><li>Aesthetics </li>...
New Product Development Matrix <ul><li>Marketing  (4.0) </li></ul><ul><li>Production (2.0) </li></ul><ul><li>Finance (2.0)...
C. Issues and Challenges Problems, Problems, Problems
The Product/Service Innovation Challenge <ul><li>Add  10  value increasing properties to each product or service every  90...
Thank You.  soft copy of slides:   http://totallyunrelatedrandomanddebatable.blogspot.com/
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R&D Today: Addressing and Enhancing Research & Development's Effectiveness - ABF Conference on R&D

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  • R&D Today: Addressing and Enhancing Research & Development's Effectiveness - ABF Conference on R&D

    1. 1. R&D TODAY: ADDRESSING AND ENHANCING RESEARCH & DEVELOPMENT’S EFFECTIVENESS CNI’s Journey, Mistakes, and Lessons Learned Kenny Ong CNI Holdings Berhad
    2. 2. In other words… <ul><li>How do we make R&D more Effective? </li></ul>
    3. 3. Before that… <ul><li>How is R&D not effective? </li></ul><ul><li>Top Down – Process problem </li></ul><ul><li>Because I can - Competency problem </li></ul><ul><li>Poor business value – Ignorance problem </li></ul><ul><li>No Budget lah - Alignment problem </li></ul><ul><li>Not-Invented-Here – Ego problem </li></ul>
    4. 4. Contents: <ul><li>How do we make R&D more Effective? </li></ul><ul><ul><li>Know Your Business </li></ul></ul><ul><ul><li>Research </li></ul></ul><ul><ul><li>Reverse Marketing </li></ul></ul><ul><ul><li>Align </li></ul></ul><ul><li>R&D Today -> RD&D </li></ul><ul><li>Issues and Challenges </li></ul>
    5. 5. So…What is your Product? <ul><li>Research -> Develop -> Sell -> Improve </li></ul><ul><li>Coffee? </li></ul><ul><li>Shampoo? </li></ul><ul><li>Events? </li></ul><ul><li>Marketing Plan? </li></ul><ul><li>Customers? </li></ul>
    6. 6. R&D For What? R&D Product Process
    7. 7. A1. Know Your Business The anchor for all decisions
    8. 8. About: CNI <ul><li>18 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Export/Trading, eCommerce </li></ul><ul><li>Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan </li></ul><ul><li>Staff force: ± 500 </li></ul><ul><li>Distributors: 250,000 </li></ul><ul><li>Products: Consumer Goods and Services </li></ul>
    9. 9. Intro: MLM <ul><li>Sell through people </li></ul><ul><li>Relationship & people skills </li></ul><ul><li>Compensation Plan </li></ul><ul><li>Follow-up </li></ul><ul><li>Integrity </li></ul><ul><li>R&D </li></ul><ul><li>Training </li></ul><ul><li>Functions & Events </li></ul><ul><li>Tight regulations </li></ul>
    10. 10. Intro: CNI <ul><li>CNI’s Business Model background </li></ul>Factory CNIE DC SP Leaders Customers R&D
    11. 11. Know Your Business <ul><li>What are the Implications? </li></ul><ul><li>E.g. IKEA </li></ul><ul><li>E.g. CNI </li></ul>
    12. 12. Know Your Business <ul><li>“ The Product is Not the Product” </li></ul><ul><li>What is the customer really buying? </li></ul><ul><li>What is the “Core Buying Purpose”? </li></ul>
    13. 13. What are they really buying? Product value Services value Personnel value Image value Mental cost Energy cost Time cost Monetary cost Total customer value Total customer cost Value to Customer
    14. 14. What are they really buying? <ul><li>&quot;Exactly what I need&quot; </li></ul><ul><li>Customized products </li></ul><ul><li>Personalized communications </li></ul><ul><li>&quot;They're very responsive&quot; </li></ul><ul><li>Preferential service and flexibility </li></ul><ul><li>Recommends what I need </li></ul><ul><li>&quot;I'm very loyal to them&quot; </li></ul><ul><li>Helps us to be a success </li></ul>&quot;They are the most innovative&quot; &quot;Constantly renewing and creative&quot; &quot;Always on the leading edge&quot; &quot;A great deal!&quot; Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership &quot;A no-hassles firm&quot; Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy
    15. 15. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
    16. 16. <ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li></ul><ul><li>Meet volatile customer needs </li></ul><ul><li>Fast concept-to- counter </li></ul><ul><li>Never satisfied - obsolete own and competitors' products </li></ul><ul><li>Learning organization </li></ul>Strategy: Value Disciplines <ul><li>Operational Excellence </li></ul><ul><li>Competitive price </li></ul><ul><li>Error free, reliable </li></ul><ul><li>Fast (on demand) </li></ul><ul><li>Simple </li></ul><ul><li>Responsive </li></ul><ul><li>Consistent information for all </li></ul><ul><li>Transactional </li></ul><ul><li>'Once and Done' </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Management by Fact </li></ul><ul><li>Easy to do business with </li></ul><ul><li>Have it your way (customization) </li></ul><ul><li>Market segments of one </li></ul><ul><li>Proactive, flexible </li></ul><ul><li>Relationship and consultative selling </li></ul><ul><li>Cross selling </li></ul>
    17. 17. What does the Customer want? * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes Relationship Image
    18. 18. What does the Customer want? * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes Price Quality Time Selection √ √ Smart Shopper Relationship Image Operational Excellence : Quality and selection in key categories with unbeatable prices
    19. 19. What does the Customer want? * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes √ Brand Time Function √ √ Best Product Relationship Image Product Leadership: Unique products and services that push the standards
    20. 20. What does the Customer want? * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes √ √ √ √ Service Trusted Brand Relationship Image Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships Relations
    21. 21. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
    22. 22. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
    23. 23. The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li></ul><ul><li>Make it easy to prepare </li></ul><ul><li>High Turnover </li></ul><ul><li>Tasks simple to learn & repeat </li></ul><ul><li>Make it quick </li></ul><ul><li>“ Fast Food” </li></ul><ul><li>Tests new products for Cooking Times </li></ul><ul><li>Make what customers want </li></ul><ul><li>Prowls market for new products </li></ul><ul><li>Monitored field tests </li></ul>*Adapted from: Businessweek , Februrary 5 th 2007
    24. 24. Business Situation vs. R&D Upturn Flat Downturn Fight Complacency Sharpen Edge Keep Momentum Conquer NPD Cycle Time Improve Edge Extensions Counter Competitor Innovation Acquire Profits Build momentum Sales Cash Flow Focused on ‘Breakthrough’ JV, In-source, Out-source Eliminate bottom 20% Improve Top 15% revenue-generating products ↓ R&D, ↑ Sales
    25. 25. A2. Research Lies. Deception. Statistics.
    26. 26. Problem… <ul><li>“ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied .” </li></ul>HBR March/April 1996
    27. 27. ‘Input’ Filters Mkt Rsc R&D Research Development Filter Filter Filter Marketing Filter
    28. 28. Information Drifts (1/2) <ul><li>Availability Drift: Looking for convenience </li></ul><ul><ul><li>You give more weight to information that’s more readily available to you. </li></ul></ul><ul><li>Experience Drift: Influenced by personal prejudice </li></ul><ul><ul><li>You tend to see things in terms of your personal or professional interest. </li></ul></ul><ul><li>Conflict Drift: Struggling with beliefs </li></ul><ul><ul><li>Your natural tendency is to reject information that conflicts with your beliefs. </li></ul></ul><ul><li>Recall Drift: Trusting your memory </li></ul><ul><ul><li>You more easily recall information about things familiar to you. </li></ul></ul>
    29. 29. Information Drifts (2/2) <ul><li>Selectivity Drift: Picking your priorities </li></ul><ul><ul><li>You screen out information and observations about things that do not interest you. </li></ul></ul><ul><li>Anchoring Drift: Weighing answers too heavily </li></ul><ul><ul><li>If you lack experience in a specific area, you hang on to or anchor to the first information you hear. </li></ul></ul><ul><li>Recency Drift </li></ul><ul><ul><li>You place greater emphasis on what has just happened to you. </li></ul></ul><ul><li>Favorability Drift </li></ul><ul><ul><li>You are more likely to look harder for information that supports your beliefs rather than input that is obvious in front of you. </li></ul></ul>
    30. 30. A3. Reverse Marketing What we can vs. What we need
    31. 31. What we needed <ul><li>The birth of Malaysia’s 1 st Tongkat Ali Ginseng Coffee </li></ul>
    32. 32. The “Old” Days Invent R&D Build Manufacturing Market Marketing Sell Sales
    33. 33. The “New” Days Invent Build Market Sell R&D Manufacturing Marketing Sales
    34. 34. Marketing 101 Product Promotion Pricing Place 4Ps
    35. 35. Marketing & R&D Features Brand Target Logistics Product Promotion Pricing Place 4Ps
    36. 36. Marketing & R&D Features Brand Target Logistics Price Promotion Place Product
    37. 37. Brand and Positioning <ul><li>For who? </li></ul><ul><li>Your Offer? </li></ul><ul><li>Key Differentiator? </li></ul>
    38. 38. A4. Align Running in the same direction with the proper resources
    39. 39. Strategy: 4-Wheels Philosophy Corporate Objective Corporate Strategy Structure Resources Leadership Person
    40. 40. Strategy: Framework <ul><li>Leader vs. Innovator </li></ul><ul><li>Bloom vs. Prune </li></ul><ul><li>Breakthrough vs. Incremental </li></ul><ul><li>Horizon </li></ul><ul><li>Timing vs. Quality </li></ul><ul><li>Internal, External, Outsourced </li></ul><ul><li>TopDown vs BottomUp </li></ul><ul><li>Blockbuster vs. Multiplier vs. Pyramid </li></ul>Philosophy
    41. 41. Strategy: Framework <ul><li>Org Structure </li></ul><ul><li>Job Design </li></ul><ul><li>C&B </li></ul><ul><li>Policies & procedures </li></ul><ul><li>Decision making </li></ul><ul><li>Job fit </li></ul><ul><li>Management Systems </li></ul><ul><li>BSC and KPIs </li></ul><ul><li>Decentralized & Empower </li></ul>Structure
    42. 42. Strategy: Framework <ul><li>Tools </li></ul><ul><li>Physical facilities </li></ul><ul><li>Peer support </li></ul><ul><li>Information Systems </li></ul><ul><li>Communications Systems </li></ul><ul><li>T&D Programs </li></ul><ul><li>Funding & Allocation* </li></ul>Resources
    43. 43. *Funding & Allocation CNI’s Performance Market Potential <ul><li>Sell Outside </li></ul><ul><li>Sell IP </li></ul><ul><li>License out IP </li></ul><ul><li>Sell IP </li></ul><ul><li>Drop </li></ul><ul><li>Re-invest </li></ul><ul><li>Exchange IP </li></ul>
    44. 44. Strategy: Framework <ul><li>Vision/Mission/Philosophy </li></ul><ul><li>Leadership Style </li></ul><ul><li>R&D importance </li></ul><ul><li>Delegation & Empowerment </li></ul><ul><li>C&B, Promotions </li></ul><ul><li>Sense of Urgency </li></ul><ul><li>Speak regularly about customers </li></ul><ul><li>Appetite for Risk </li></ul>Leadership
    45. 45. Strategy: Framework <ul><li>Specialist Career Ladders </li></ul><ul><li>Competencies** </li></ul><ul><li>Co-habitation </li></ul><ul><li>Team vs. Individual </li></ul><ul><li>Standard or Creative? </li></ul><ul><li>C&B, Retention </li></ul><ul><li>Toys </li></ul><ul><li>In-source? Co-source? JV? BPO? </li></ul>Person
    46. 46. Strategy: Framework Philosophy Corporate Objective Corporate Strategy Structure Resources Leadership Person
    47. 47. B. R&D Today -> RD&D R&D in Totality
    48. 48. R&D Today -> RD&D <ul><li>Garnier </li></ul><ul><li>Digi </li></ul>Design Point 1: Designed to SELL Design Point 2: Before-After R&D
    49. 49. R&D Today -> RD&D <ul><li>CNI Waterlife </li></ul>Design Point 1: Designed to SELL Design Point 2: Before-After R&D
    50. 50. R&D Today -> RD&D <ul><li>R esearch, D evelopment & DESIGN </li></ul><ul><li>Features </li></ul><ul><li>Benefits </li></ul><ul><li>Differentiation </li></ul>
    51. 51. R&D Today -> RD&D <ul><li>R esearch, D evelopment & DESIGN </li></ul><ul><li>Function </li></ul><ul><li>Aesthetics </li></ul><ul><li>Logistics </li></ul>Design Point 1: Designed to SELL Design Point 2: Before-After R&D
    52. 52. New Product Development Matrix <ul><li>Marketing (4.0) </li></ul><ul><li>Production (2.0) </li></ul><ul><li>Finance (2.0) </li></ul><ul><li>Manpower (1.0) </li></ul><ul><li>Procurement (1.0) </li></ul>
    53. 53. C. Issues and Challenges Problems, Problems, Problems
    54. 54. The Product/Service Innovation Challenge <ul><li>Add 10 value increasing properties to each product or service every 90 days </li></ul><ul><li>Reduce jointly held inventories and lead time required by 90% in 24 months </li></ul><ul><li>Reduce new-product/service development cycle time by 75% in next 2 years </li></ul><ul><li>Copy 10 ideas every 60 days form competitors and noncompetitors </li></ul><ul><li>Target % Revenue from New Products (previous 24 months ) - start with 50% </li></ul>Source: Thriving on Chaos , Tom Peters; Alfred A. Knopf Inc.
    55. 55. Thank You. soft copy of slides: http://totallyunrelatedrandomanddebatable.blogspot.com/

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