TVP – Metric 9 Projects with Business Marketing Approval
- Resource Type
- Tool
- Authors
- Alan Fusfeld, Innovation Research Interchange
- Topics
- Innovation Metrics, Stage-Gate, Tools and Techniques
- Associated Event
- Publication
Background | User Guide | Program Contents | Stakeholders | List of Metrics
1. Metric Definition
Percent of projects in the total R&D portfolio with explicit business unit and or corporate business management sign-off.
The intent of this metric is to provide an indicator of the degree of alignment with business and corporate strategy and tactics. The metric is closely related in some corporate structures to metric 12, “Percent Funding by the Business.”
2. Advantages and Limitations
Several studies have suggested that close alignment of R&D to marketing and to business and corporate strategies increases the odds of success for new products and processes. Thus actions which drive this metric to higher values can be expected to improve the amount of R&D spent on successful projects and the predictability of the outcome from R&D efforts.
The metric will be valuable to the extent business/marketing management and R&D management jointly develop strategy and plans. Use of the metric to drive R&D without such teamwork will likely lead to short-term projects and suboptimal use of R&D resources. In those companies where R&D is corporately funded, business/marketing management may also be tempted to give approval to projects in their market segments to insure that they receive “their share” of R&D resources. Finally if the corporation uses a formal innovation process which requires business/marketing approval at some stage, the metric runs the risk of becoming a measure of compliance with use of the process or a measure of the percent of project past the approval stage.
3. How to Use the Metric
Explicit approval may be sought at any point in the innovation process. Seeking approval early in the innovation process probably provides maximum value. One form of approval is the provision of a sales forecast from marketing management for each new product and agreement to commercialize if the product meets technical requirements in a timely manner.
The level of approval from the marketing/business management and the point where approval should be sought should be explicitly defined if the firm uses a formal innovation process. If not, the level should be commensurate with the amount of R&D resources and commercialization resources which will be required.
4. Options and Variations
For projects having broad corporate strategic value, approval of a director of corporate planning or director of corporate business development might be an appropriate substitute for the business/marketing management approval. For corporations where out-licensing of technology is a major thrust, approval of a director or vice president of licensing may be an appropriate substitution.