8 Great Metrics that Showcase R&D Investment Performance
This program focuses on key performance indicators [KPIs] that utilize R&D spending in their calculation.
The metrics range from corporate metrics that are reported to Wall Street and/or used by analysts and investors, to measures that help CXOs and CFOs to divvy-up funds across business units of different purposes and performance levels, to measures that improve the ranking of investments, to measures that can be used to modulate over-spending or under-spending to maximize corporate and competitive performance.
We'll begin the program with a discussion of R&D intensity and how it differs across industries and examine some recent cross-industry findings regarding the specific spending of funds for Advanced Development activities. These subjects make for a good lead into the eight R&D spending metrics as industries are different, as are the quantified values of their metrics.
Bibliographic references are provided for the numerous cases and examples we cite to enable all participants to further their investigation on the subjects of specific interest.
There will be two polls.
This "8 Metrics" program is the second program of a three-webinar series on R&D Spending. The subjects are selected as "best case examples" from extensive research and literature study we conducted on conditions, decisions, and metrics affecting R&D spending and its ROI/RoR. Findings are grouped into three topically-alike programs that each stand on their own.
The Program
1. We begin the program with a discussion of R&D intensity and how it differs across industries.
2. The program then examines recent cross-industry research findings regarding the spending of funds for Advanced Development activities that precede Product Development.
3. We then go through each of the 8 KPIs, about 4-6 minutes per metric. We define each metric, put it in context, show representative values for it, and where possible illustrate the metric in a business or case study context.
4. There will be two polls during the presentation.
5. A question and answer session conclude the program.
8 Performance Measures Based On R&D Spending
- ROI
- RORC
- PRR
- PGF
- RDE
- RDP
- RDFPO
- RQ
Webinar Take-Aways
- The lay of the land on R&D intensity across major industries.
- Pre-publication findings on cross-industry spending on Advanced Development.
- 8 metrics that incorporate and quantify the performance of R&D spending.
- Case study examples of Fortune 500 companies for several of the spending metrics.
Date of Webinar: Thursday, December 6, 2018 - 2:00 PM Eastern Time
Agenda
R&D Spending Intensity & Trends
Performance Measures Based on R&D Spending
1 - ROI Return on Innovation
2 - RORC Return on Research Capital
3 - PRR Price to Research Ratio
4 - PGF Price/Growth Flow
5 - RDE R&D Efficiency
6 - RDP R&D Productivity
7 - RDFPO R&D to Final Product Output
8 - RQ Research Quotient
Lessons From Financial Reporting Practices
Biography: Author
Executive Summary
- Are we using good metrics for internal performance monitoring?
- Are our metrics sending the best message to investors and markets?
- Are we investing the right amount so we can maximize our performance?
This unique program focuses on R&D Spending Performance KPIs. It involves eight distinct Metrics that vary widely in their nature and purpose, while all using corporate R&D Spending in common in their calculation. All measures are aimed at capturing return on investment [ROI] or rate of return [ROR] from spending on innovation in some fashion.
The Program
1. We open the program by looking at the R&D Intensity of the 8 top industrial economies, and the EU as a whole. We then look at the R&D Intensity of the major industries in the USA, using the latest figures from the National Science Foundation (NSF) just released in September 2018.
2. There are some recent and eye-opening findings regarding spending on Advanced Development vs. Product Development that have been obscured because of the way data is collected by the NSF, which merges these two activities as a single Development category.
3. With the subject of spending now centered in everyone's minds, we then address each of the 8 R&D Spending Performance KPIs and introduce a "bonus" 9th metric that ties Advanced Development to business and financial performance.
4. The first group of KPIs consists of four efficiency/productivity metrics that divide profits, market cap, and other aggregate outputs by the amount of spending needed to attain them. A case study of Apple vs. Nokia illustrates the metrics using annual report financial statement data and market figures.
5. The second group of KPIs consists of four measures of very different purposes, a combination of both efficiency and effectiveness measures. The first helps to sort out how much money each business unit should receive. The second introduces the concept of "R&D maturity" into productivity. The third is a novel approach to normalizing complexity across an entire product portfolio, or benchmarking competition. The final metric helps to gauge optimal levels of spending. Many companies could improve profits if they spent less. A third of companies should spend more.
Methodology
Methodology
Each one-hour program is produced to standards consistent with top business and technical presentations at thought-leading industry conferences, and recorded live. The editing process removes any small errata that occur, pauses and the like, and adds music to professionalize the lead-in and trailer. There is no promotion, advertising, marketing, or sales elements to the programs, zero. Each program is 100% educational content that is underpinned by fact-based research, both primary (custom) research and secondary research.
Proper bibliographic references are provided for all cited content, directly on the page it occurs, enabling participants to see the source as the subject is presented; and then to be able to directly find the original source after the program completes. Each slide deck has a registered ISBN number and copyright.
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Speakers
Mr Brad Goldense,
CEO ,
GGIBrad Goldense has been focusing on the strategies, tactics, and operations of product management, development, and manufacturing since the 1980s.
He has authored over 300 publications and consulted to over 200 companies across the world. Some 500 companies have participated in his seminars and masterclasses. Mr. Goldense has a BSCE from Brown University and an MBA in Finance from Cornell University and four decades of experience in engineering and management.
Brad has spoken in hundreds of settings and was a faculty member in the graduate engineering executive program at Tufts University for two decades. Certified New Product Development Professional, Certified Manufacturing Engineer, Certified Production and Inventory Management, and Certified Computer Professional credentials underpin the presentation of the one-hour programs.
