How to Sell R&D in Your Organization-Without Begging

Elmquist, Steven A.
Organization: Society for Mining, Metallurgy & Exploration
Pages: 5
Publication Date: Jan 1, 2004
INTRODUCTION R&D activities are needed, at a minimum, for a company's competitive survival followed in importance by the growth and diversification of the company. For most industrial companies, however, R&D is the business area that has been the most difficult relative to confident long-range financial commitments and effective control and relative to its value as a long-term investment. Investors look not only at the current profitability of the company but increasingly at the plans, actions, and quality of the personnel in position to improve the market position and profitability of an organization. "The strongest predictor of investment value is the degree of innovation of the 'company.' I believe this is true of both strategic planning and R&D activities." R&D is the lifeblood of a company's future. If this basic premise-R&D for survival and growth-is believed to be true, why is it necessary to "Sell R&D in your organization? My personal experience, in a number of organizations, is that R&D budget is perceived as a business element area that could be delayed or reduced to improve the bottom line during difficult business conditions. I believe the following quote speaks volumes about this subject-"There is only one thing I know for certain about research, and that is it costs money-lots of it." -Unnamed, Hard- headed Financial Executive. A business must make money and be profitable in order to maintain and create jobs, pay taxes, cover working capital and costs of goods sold, and most importantly, create value for its shareholders. The foremost element of selling R&D, therefore, is to consistently demonstrate the R&D group's contribution to the bottom line.
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