The Smart Organization: Creating Value Through Strategic R&D

Why do some firms continually make poor R&D decisions while others can deliver a stream of successful products and services? According to the Mathesons, successful firms have internalized the nine interlocking principles of smart R&D--the building blocks of a corporate culture that emphasize making the right strategic decisions at the right times, and aligning organizational practices to support these decisions and sustain their results. The nine principles include embracing uncertainty, opening information flows, and encouraging systems thinking. Once in place, these values enable companies to make appropriate choices about their R&D planning, portfolio management, and project strategies. The authors stress the importance of evaluating trade-offs, investigating alternatives, and getting buy-in across functions to ensure that decisions will be viable from both technological and managerial perspectives. They use best practice examples from companies including General Motors, Pilkington Glass, and BankOne of Ohio to demonstrate that the methods used to enrich R&D planning can be applied more broadly to create, in effect, the smart organization.

David Matheson is a principal in Strategic Decisions Group's London office and director of the research efforts that identified the best practices and the Nine Principles of Smart R&D. Jim Matheson is a world-recognized authority on decision analysis and its application. He is a co-founder and director of Strategic Decisions Group, an international management consulting firm headquartered in Menlo Park, California, and director of the firm's R&D practice.