Performance measurement in industrial R&D

Abstract

Currently, the need for R&D performance measurements that are both practically useful and theoretically sound seems to be generally acknowledged; indeed, the rising cost of R&D, greater emphasis on value management and a trend towards decentralization are escalating the need for ways of evaluating the contribution of R&D to corporate performance. However, although recent research and writing on the subject shows that the challenge of developing such sound measurements has been taken up by many academics and organizations, it is also clear that there is no generally applicable approach.In this review, we consider various approaches for measuring the performance in industrial R&D and identify their key characteristics. We also include a brief summary of the`history' of performance measurement in R&D, which shows that although there are some new ways of looking at the issue there are many examples from the past that can contribute to our current thinking.The approaches found in the literature and practice are very varied in their application, some being more suitable for the project level, others for the R&D department, and some for the development process or for the organization as a whole. Furthermore, the uses of the approaches tend to be different. For example, some approaches are intended to justify the continuation of investment in R&D to upper management, whilst others are more suited to support learning and self-correction by empowered R&D teams. In this paper these uses, or functions', of performance measurement and a taxonomy of typical subjects of measurement in R&D environments are explored.Finally, we conclude the review with a discussion of some limitations of the growing literature on R&D performance measurement. Trends in R&D Arousing the Interest in Performance MeasurementSeveral studies have pointed to changes in the business environment that have taken place over recent decades, which have had a substantial impact on the way R&D processes are practised and managed, though it has also been noted that these trends do not apply equally throughout all industries (see, for

Performance measurement in the construction research and development

“…In this context, PM on R&D helps to creates links between the organisation's strategy and R&D by translating the organisation's strategy into performance measures which could, in turn, be linked to R&D activities. A number of studies have revealed that PM of R&D plays a vital role by influencing and helping organisations to implement their strategies (Bremser and Barsky, 2004;Pearson et al, 2000;Kerssens-van Drongelen et al, 2000;Kerssens-van Drongelen and Bilderbeek, 1999;Werner and Souder, 1997;Brown and Svenson, 1988). Yawson et al (2006) argue that PM for R&D activities provide the basis to assess whether the organisation is progressing towards its goals, identifies the strengths and weaknesses, decides on the future actions needed for improvements and provides data to request additional resources hence facilitating the implementation strategies.…”

“…Seaden and Mnseau (2001) and Hodkinson (1999) asserted that due to improper reporting mechanisms, the parties involved within R&D projects do not have a clear understanding of its status thus, the importance of creating clear and visible links between the R&D spending and their impact was highlighted. Kerssens-van Drongelen et al (2000) indicated that the accountability of R&D investments has increased due to the interest of investors and shareholders on knowing the utilisation of R&D resources. Therefore, as discussed above, PM would improve the reporting structure of R&D projects and would show how R&D investment is used hence, enhancing the success of R&D activities.…”

Life Cycle Perspective of R&D Investment Management: Case Study Approach

“…At the same time, the research and development phase is expanding (Back-Hock, 1992). The competitive advantage lies in resources that are not easily measured by traditional financial metrics, such as ongoing research and development (Brown -Svenson, 1998;Kerssens-van Drongelen et al, 2000;Pearson, 2010;Bremser, 2004). Therefore, R&D managers face challenges when making long-term R&D plans (Tierlinck, 2013).…”

Analysis on the Relevance between Synergistic Innovation and Innovation Resources and Ability of Auto Enterprises

“…In a way, auto enterprises' synergistic innovation is a process in which innovation resources ( RE ) is integrated, and in which various kinds of resources carriers urge innovation resources to serve synergistic innovation of multi-institution, of multi-department and of multi-areas in terms of co-building R&D institutions, constructing R&D virtual network [5] , cultivating R&D sharing platform and changing the ownership attribute of R&D resources. Auto enterprises' synergistic innovation needs extensive recourses, including not only such tangible innovation resources as R&D expense input (RE1), R&D equipment, software and laboratories (RE2), but intangible ones like schools, scientific research institutions [6] , suppliers ( RE3 ) and leaders' attention ( RE4 ) .…”