R&D today: Addressing and enhancing Research & Development’s effectiveness
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R&D today: Addressing and enhancing Research & Development’s effectiveness

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ABF Research & Development 2009, Singapore ...

ABF Research & Development 2009, Singapore

*Applying theory to practice
*Matching R&D to Business Strategy and Organization’s Goals
*Enhancing R&D efficiency by selecting a key component criteria
*Keeping R&D close to where strategic decisions are made

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R&D today: Addressing and enhancing Research & Development’s effectiveness R&D today: Addressing and enhancing Research & Development’s effectiveness Presentation Transcript

  • R&D TODAY: ADDRESSING AND ENHANCING RESEARCH & DEVELOPMENT’S EFFECTIVENESS Concepts, Case Studies, and Debatable Ideas Kenny Ong CNI Holdings Berhad
  • In other words…
    • How do we make R&D more Effective?
  • Before that…
    • How is R&D not effective?
    • Top Down – Process problem
    • Because I can - Competency problem
    • Poor business value – Ignorance problem
    • No Budget - Alignment problem
    • Not-Invented-Here – Ego problem
  • Contents:
    • How do we make R&D more Effective?
      • Know Your Business
      • Research
      • Reverse Marketing
      • Align
    • R&D Today -> RD&D
    • Issues and Challenges
  • R&D For What? R&D Product Process
  • So…What is our Product?
    • Research -> Develop -> Sell -> Improve
    • Coffee?
    • Shampoo?
    • Events?
    • Marketing Plan?
    • Customers?
  • A1. Know Your Business The anchor for all decisions
  • About: CNI
    • 20 years old
    • Core Business: MLM
    • Others: Contract Manufacturing, Export, Trading, eCommerce, F&B retail
    • Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan
    • Staff force: ± 500
    • Distributors: 200,000
    • Products: Consumer Goods and Services
  • Intro: MLM
    • Sell through people
    • Relationship & people skills
    • Compensation Plan
    • Follow-up
    • Integrity
    • R&D
    • Training
    • Functions & Events
    • Tight regulations
  • Intro: CNI
    • CNI’s Business Model background
    Factory CNIE DC SP Leaders Customers R&D
  • What is the Business Model? USP Market Discipline Profit Model
  • Business Model: USP
    • Unique Selling Proposition (USP)
    • =
    • Targeted Customer
    • =
    • Core Buying Purpose/ Customer Value Proposition/ Job To Be Done (JBTD)
  • Business Model: USP
    • “ The Product is Not the Product”
    • What is the customer really buying?
    • What is the “Core Buying Purpose”?
  • Business Model: USP
    • Insufficient WEALTH
    • Insufficient ACCESS
    • Insufficient SKILL
    • Insufficient TIME
  • Business Model: Profit Model Revenue Cost Margin
  • Business Model: Market Discipline
    • Mamak stall
  • What are they really buying?
    • "Exactly what I need"
    • Customized products
    • Personalized communications
    • "They're very responsive"
    • Preferential service and flexibility
    • Recommends what I need
    • "I'm very loyal to them"
    • Helps us to be a success
    "They are the most innovative" "Constantly renewing and creative" "Always on the leading edge" "A great deal!" Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership "A no-hassles firm" Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy
  • 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)
    • Product Leadership
    • New, state of the art products or services
    • Risk takers
    • Meet volatile customer needs
    • Fast concept-to- counter
    • Never satisfied - obsolete own and competitors' products
    • Learning organization
    Strategy: Value Disciplines
    • Operational Excellence
    • Competitive price
    • Error free, reliable
    • Fast (on demand)
    • Simple
    • Responsive
    • Consistent information for all
    • Transactional
    • 'Once and Done'
    • Customer Intimacy
    • Management by Fact
    • Easy to do business with
    • Have it your way (customization)
    • Market segments of one
    • Proactive, flexible
    • Relationship and consultative selling
    • Cross selling
  • The McPlaybook*
    • Make it easy to eat
    • 50% drive-thru
    • Meals held in one hand
    • Make it easy to prepare
    • High Turnover
    • Tasks simple to learn & repeat
    • Make it quick
    • “ Fast Food”
    • Tests new products for Cooking Times
    • Make what customers want
    • Prowls market for new products
    • Monitored field tests
    *Adapted from: Businessweek , Februrary 5 th 2007 www.myCNI.om.my
  • Focus: 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)
  • Focus: 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) www.myCNI.com.my www.OOBEY.com
  • What does the Customer want? * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes Relationship Image
  • 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
  • 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
  • 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
  • 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
  • A2. Research Lies. Deception. Statistics.
  • Problem…
    • “ 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 .”
    HBR March/April 1996
  • Dangers of Best Practice and Benchmarking… www.myCNI.co.my Company Performance high low ‘ Best Practice’ theories low high zero Performance “ Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005 Trend line
  • Dangers of Best Practice and Benchmarking… Company Performance high low ‘ Best Practice’ theories low high zero Performance “ Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005 Trend line
  • Dangers of Best Practice and Benchmarking…
    • Selection Bias:
    • Success Traits = Failure Traits
    • Successful Cases + Failure Cases
    • Worst effects in ‘Old’ industries
    • Overvalue ‘best practice’ theories
    • Current accomplishments unfairly magnified by past achievements
    • Reverse Causal
  • Dangers of Best Practice and Benchmarking…
    • Also known as ‘Beware of Consultants’:
    • Selection Bias
    • Big vs. Small company
    • Selective success stories
    • Correlation vs. Causal
    • Survey problems
    • Practical vs. Glamour-to-have
    • Leaders who benchmark
  • ‘Input’ Filters Mkt Rsc R&D Research Development Filter Filter Filter Marketing Filter
  • Information Drifts (1/2)
    • Availability Drift: Looking for convenience
      • You give more weight to information that’s more readily available to you.
    • Experience Drift: Influenced by personal prejudice
      • You tend to see things in terms of your personal or professional interest.
    • Conflict Drift: Struggling with beliefs
      • Your natural tendency is to reject information that conflicts with your beliefs.
    • Recall Drift: Trusting your memory
      • You more easily recall information about things familiar to you.
  • Information Drifts (2/2)
    • Selectivity Drift: Picking your priorities
      • You screen out information and observations about things that do not interest you.
    • Anchoring Drift: Weighing answers too heavily
      • If you lack experience in a specific area, you hang on to or anchor to the first information you hear.
    • Recency Drift
      • You place greater emphasis on what has just happened to you.
    • Favorability Drift
      • You are more likely to look harder for information that supports your beliefs rather than input that is obvious in front of you.
  • A3. Reverse Marketing What we can vs. What we need
  • What we needed
    • The birth of Malaysia’s 1 st Tongkat Ali Ginseng Coffee
  • 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 IKEA Apple Nestle Asus
  • 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
    • Leader vs. Innovator
    • Bloom vs. Prune
    • Breakthrough vs. Incremental
    • Horizon
    • Timing vs. Quality
    • Internal, External, Outsourced
    • TopDown vs BottomUp
    • Blockbuster vs. Multiplier vs. Pyramid
    Philosophy
  • Strategy: Framework
    • Org Structure
    • Job Design
    • C&B
    • Policies & procedures
    • Decision making
    • Job fit
    • Management Systems
    • BSC and KPIs
    • Decentralized & Empower
    Structure
  • Strategy: Framework
    • Technology
    • Equipment
    • Information
    • Channels
    • Partnerships, Alliances
    • Brand
    • Funding & Allocation*
    Resources
  • *Funding & Allocation CNI’s Performance Market Potential
    • Sell Outside
    • Sell IP
    • License out IP
    • Sell IP
    • Drop
    • Re-invest
    • Exchange IP
  • Strategy: Framework
    • Vision/Mission/Philosophy
    • Leadership Style
    • R&D importance
    • Delegation & Empowerment
    • C&B, Promotions
    • Sense of Urgency
    • Speak regularly about customers
    • Appetite for Risk
    Leadership
  • Strategy: Framework
    • Specialist Career Ladders
    • Competencies**
    • Co-habitation
    • Team vs. Individual
    • Standard or Creative?
    • C&B, Retention
    • Toys
    • In-source? Co-source? JV? BPO?
    Person
  • 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
    • Garnier
    • Digi
    Design Point 1: Designed to SELL Design Point 2: Before-After R&D
  • R&D Today -> RD&D
    • CNI Waterlife
    Design Point 1: Designed to SELL Design Point 2: Before-After R&D
  • R&D Today -> RD&D
    • R esearch, D evelopment & DESIGN
    • Features
    • Benefits
    • Differentiation
  • R&D Today -> RD&D
    • R esearch, D evelopment & DESIGN
    • Function
    • Aesthetics
    • Logistics
    Design Point 1: Designed to SELL Design Point 2: Before-After R&D
  • New Product Development Matrix
    • Marketing (4.0)
    • Production (2.0)
    • Finance (2.0)
    • Manpower (1.0)
    • Procurement (1.0)
  • C. Issues and Challenges Problems, Problems, Problems
  • The Product/Service Innovation Challenge
    • Add 10 value increasing properties to each product or service every 90 days
    • Reduce jointly held inventories and lead time required by 90% in 24 months
    • Reduce new-product/service development cycle time by 75% in next 2 years
    • Copy 10 ideas every 60 days form competitors and noncompetitors
    • Target % Revenue from New Products (previous 24 months ) - start with 50%
    Source: Thriving on Chaos , Tom Peters; Alfred A. Knopf Inc.
  • Thank You. soft copy of slides: http://totallyunrelatedrandomanddebatable.blogspot.com/