The problem is that our research (as well as work by others) shows that the R&D effectiveness in many companies leaves a lot to be desired:<\/p>\n
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- Most companies spend 70%-90%<\/strong> of their R&D resources on commodity, non-differentiating functionality.<\/li>\n
- For new functionality that gets built, at least half<\/strong> of that is used so seldomly, if at all, that it should not have been build in the first place.<\/li>\n<\/ul>\n
One of the key root causes for this is that many companies are unclear what their customers consider to be valuable<\/strong> and what is considered to be commodity. Especially when asked to describe the value that is delivered to customers in quantitative terms.<\/p>\n
We are convinced that companies are able to DOUBLE<\/strong> their R&D effectiveness, that is generate TWICE AS MUCH revenue from the same R&D investment, by changing the way the company conducts R&D, managed its products as well as its customer relations.<\/p>\n
To achieve this, however, we can’t make small changes to the way that we do things today. Instead, we have to go RADICAL<\/strong><\/a> and adopt a different paradigm. The paradigm is organized around three principles:<\/p>\n
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- Get clear on what is the real value delivery to customers and capture this in a quantitative value model that can be tracked in real-time.<\/li>\n
- Decrease investment in commodity functionality with at least 50%.<\/li>\n
- Adopt an iterative, experimental approach to developing new functionality where the relevance of the new functionality for customers is continuously established in quantitative terms.<\/li>\n<\/ul>\n
![\"\"](\"https:\/\/janbosch.com\/blog\/wp-content\/uploads\/2024\/09\/Screenshot-2024-09-05-at-10.37.55.png\")
Figure<\/strong>: Double R&D effectiveness<\/figcaption><\/figure>\n Over the last two decades, we have developed a set of tools that allow companies to achieve this outcome. These tools include:<\/p>\n
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- Hierarchical value modeling. See here<\/a> for an introduction into the concept.<\/li>\n
- Three layer product model to minimize investment in commodity functionality. See here<\/a> for a high level overview or read this short book<\/a>.<\/li>\n
- Iterative and data-driven development of new features such as the HYPEX<\/a> model. This short book<\/a> gives an introduction into the topic.<\/li>\n
- Tooling: we have started development of a tool that allows companies to track value delivery to customers in real time. We’d love to discuss this with you in more detail!<\/li>\n<\/ul>\n
- Three layer product model to minimize investment in commodity functionality. See here<\/a> for a high level overview or read this short book<\/a>.<\/li>\n
- Hierarchical value modeling. See here<\/a> for an introduction into the concept.<\/li>\n
- For new functionality that gets built, at least half<\/strong> of that is used so seldomly, if at all, that it should not have been build in the first place.<\/li>\n<\/ul>\n