Tuesday 25 February 2014

Should not your R&D be run by the Sales & Marketing Head?

More often than not, you think of an R&D Deptt in a commercial organisation, it is run by a genius. Why? R&D means development of new products or new features in an existing product. Why new products or new features, more so in an existing category of products; it is nothing but just to escape commoditization or to remain ahead of competitors. May be, it makes sense to some and perhaps this is one of many reasons, customers are flooded with new products or old products with new features. This condition does make a sense to customers or not, organisations are least concerned with as far as they feel successful???

But I would not be wrong if I say this tendency in organisations is helping only in the market-evolution and nothing more than that. But with all conviction I can also say, this is not helping organisations in building long lasting businesses for themselves which can survive onslaught from all corners. The sole goal of organisations today is to create a sustainable business. But, how can this be achieved if you are not connected with your customers. My reason of saying this is as I see there is a major disconnect between customers and their expectations from organisations. Organisations keep flooding the market with newer products with a hope to attract customers for possible longer period of time with the help of their genius R&D Developers and; on the other hand, customers are either getting frustrated or confused with 'new' products, having marginal value. This is happening as R&D is being done by ‘geniuses’ who are stationed at a place which is far away from real time customers. It seems it is due to the fact that there is huge confusion about what is Innovation?

Is innovation a new product or new features or technological development? Perhaps all are correct or may be none? To my understanding “Innovation is nothing but a set of activities directed towards achieving a new form of values for customers which customers can differentiate and appreciate.” Any new form, if not differentiated from existing product/s or appreciated by customer should not qualify for being a new product. Therefore, a connect should be established between customers and products.  There are many instances wherein many products in markets did not click with potential customers. Reason for this seems to be only one - missing connect.

Possible solution for this could be let the person/s having connection be in-charge of developing new products or even new features in an existing product. And, who is better than the Sales & Marketing professionals??  Further, as products are being innovated by a set of people who are having no common reference-points with market or for that matter with customers, failure is bound to happen.  This is happening as 'R&D Geniuses' do not see any need of being close to customers as part of their responsibility. Conversely, people who connect with i.e. Sales & Marketing as part of their role are not given this responsibility. A big Mismatch.

If I look at current practices, organisations create a separate R&D cost centre; keep provision for millions of dollars for new product or new features development. Scientists at their end, keep consuming these dollars – sometimes successfully, sometimes not. Failures are more to count, to mention here. These failures eventually lead to either business failure or become reasons for non-supportive in building long lasting competitive advantage in the market for an organisation. So, what is wrong if a Sales & Marketing person is put in charge of R&D?

I will say, nothing wrong with the proposition. Reason is simple, as mentioned above, it is Sales & Marketing personnel who are closer to their customers. They know the pain areas of their customers. Sales & Marketing function can work on these pains successfully. They can help customers in reducing hidden costs that a customer has to bear in buying and using a product or service. Every customer for any expensive to inexpensive product or service looks for ways & means for reducing hidden cost. Let me add here, every business transaction – big or small has a hidden cost.

Another reason of my recommending Sales & Marketing be in-charge of R&D is that it is Sales & Marketing people who can help customer in reducing hidden risks inherent in every transaction.

Sales & Marketing professionals can also easily look for reasons of their customers getting away from their products or services. More so, it is in the case of potential customers. They can also try knowing why potential customers are not buying their product whereas every single signal indicates that it should be other way round.

Conclusively, I can say that it is only Sales & Marketing personnel who can deliver product/s or service to their customers what they are looking for and not “R&D Geniuses”. Businesses are run on commercially viable products and not on ‘pure science’ products. Pure science discoveries help in innovating commercial products. Let your geniuses work in background on the solid relationship with Sales & Marketing function.

So, give your Sales & Marketing Head right arms to get for you, your dream of creating a long lasting business and competitive advantage over competitors. Make free your geniuses to concentrate on ‘Required Innovation’ to fulfill your customers needs & expectations. Try once, you would not repent.

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