Getting returns on R&D investments is a tough challenge, but success largely depends on appropriate value creation.
MOST INDUSTRIAL COMPANIES end up squandering their R&D resources. Interestingly, quite a few enterprises actually know that more than half of their R&D money is going down the drain. Numerous studies show that 50-75 per cent of R&D budgets get wasted on unsuccessful new products. And unlike advertising, where no one knows which 50 per cent is wasted, companies know which half of the R&D spending has not been effective although they realise it after the actual expenditure takes place.
It does not mean R&D labs are filled with non-technical people incapable of finding the right answers. They are just being asked the wrong questions. Questions that are unimaginative, being asked at too many other labs and, if solved, create too little value. In essence, these questions are too obvious.
Such questions can be grouped into two sets – wrong-market and wrong-need. The former occurs when researchers are asked to develop products for market segments that are unviable. It is an outrageous waste of resources, but most companies end up doing it.
On the other hand, most companies we know lead the footrace with wrong-need questions. Here is an all-too-familiar scenario faced by many manufacturing companies. An important customer tells your sales representative what it wants. It would have informed the same thing to every other supplier who is your competitor. That starting pistol shot begins the race, and your sales representative quickly drops the request off at R&D’s doorstep, properly packaged and labelled, of course. R&D may ask the person to go back and ask more questions, but once the person has handed the baton to R&D, his/her leg of the relay is pretty much done.
هذه القصة مأخوذة من طبعة July 29, 2018 من Business Today.
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هذه القصة مأخوذة من طبعة July 29, 2018 من Business Today.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 8500 مجلة وصحيفة.
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A Man of Multitudes
IN A NEW BOOK, CAPTAINS OF INDIA INC. AND OTHERS PAY TRIBUTE TO RAHUL BAJAJ, THE TITAN OF INDIAN INDUSTRY
HOUSE OF THE RISING SUN
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FROM GREY TO GREEN
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ECO CHAMBER
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THE GREEN BARRIER
THE EU'S CARBON BORDER ADJUSTMENT MECHANISM COULD MAKE INDIAN EXPORTS UNCOMPETITIVE, UNLESS EFFORTS TO REDUCE CARBON EMISSIONS ARE ACCELERATED
HUMANISING SUSTAINABILITY
THERE IS A NEED TO MOVE BEYOND INDIVIDUAL WELL-BEING AND FOSTER A SENSE OF INTERCONNECTEDNESS AND SOLIDARITY
DE-RISKING THE BOOKS
INDIAN BANKS ARE BEGINNING TO TAKE BABY STEPS TOWARDS ADDRESSING CLIMATE-RELATED FINANCIAL RISKS IN THEIR BOOKS. BUT THEY MUST PUT THEIR FOOT ON THE PEDAL AND ENHANCE PREPAREDNESS
PAYING FOR CHANGE
WITH EXTREME WEATHER INCREASINGLY PUTTING THE COUNTRY AND ITS ECONOMY AT RISK, INDIA SHOULD EXPLORE CLIMATE FINANCE PATHWAYS TO FUND ITS NET-ZERO JOURNEY TOWARDS A GREENER FUTURE
BEYOND THE BLIP
ESG HAS BEEN UNDER SCRUTINY GLOBALLY AMID ALLEGATIONS OF GREENWASHING AND RECORD REDEMPTIONS FROM ESG FUNDS. BUT THAT MAY JUST BE ONE SIDE OF THE STORY, SINCE SUSTAINABLE PRACTICES HAVE BECOME CORE COMPONENTS OF COMPANIES' STRATEGIES
PROFITING FROM ESG
INITIALLY DRIVEN BY REGULATORY COMPLIANCE REQUIREMENTS, BUSINESSES ARE INCREASINGLY VIEWING ESG AS A TOOL TO ENHANCE PROFITABILITY. BUT THERE IS STILL A LONG WAY TO GO