Improve R&D Spending and Productivity With the Research Quotient Model

DECIDING the best level of spending each year for research and development (R&D) and product development has challenged management for decades. It is a complex subject with many variables. One of the challenges is to tie spending to results. Projects get funded, development proceeds, products launch, and commercialization takes place. Years go by before the full set of data is in place to find out if the money was well spent. Companies have dozens to hundreds of projects going on simultaneously. As the relationship between spending and results is complex to determine, top management often varies R&D spending to modulate variations that occur elsewhere in the business-without knowing the impact on R&D and innovation levels over time.