Having a killer strategy for your research and development (R&D) is essential but planning how to manage your R&D delivery is equally important. So, in the second of our two-part blog series, we explore why focusing on R&D delivery at the start of a new financial year drives success for your business. We also unpack the best systems, processes and activities to unlock your R&D’s potential and share a nifty five-step process to deliver your R&D strategy with ease.
1. Define where you are on the commercialisation journey
As simple as it might sound, the very first step to delivering your R&D successfully, is pinpointing where your business is on its commercialisation journey. The R&D strategy that you learned how to create in the first part of this blog series sets the direction and destination of your R&D. Identifying your commercialisation stage tells you where your business is today. This enables you to plan how you will go from A (your current position) to B (delivering your R&D strategy).
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Early-stage ideation
If you’re at an early-stage start-up, your R&D will likely need to focus on anything from idea generation and concept screening to experimental proof-of-concept R&D. These are the nuts and bolts required to assess whether your innovation(s) have potential. So, your R&D delivery needs to fuse agility with harsh objectivity. And it also must include deadlines, so you don’t end up fixating on fruitless projects.
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Prototyping to product-market fit
Equally, if you’re still at an early stage, but you’re developing a prototype, minimum viable product or seeking product-market fit, your R&D implementation will be quite different from the ideation phase. It will be weighted towards continual testing and learning — through the lenses of customer demand and commercial viability.
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Late-stage and product launch
If your start-up is ready to go to market and planning a product launch, with scaling just over the horizon, then your R&D delivery will need to be highly systematic. Quality control and sustainable scaling will be two of your key targets.
2. Set achievable milestones and deliver on your KPIs
Your R&D milestones and KPIs will depend on your commercialisation stage. And they could include partnering with a collaborator, hitting an innovation rate metric, creating a prototype, filing patents, or launching a product or service by a certain date.[1] Beyond that, it’s vital to ensure your R&D milestones and KPIs are SMART (specific, measurable, achievable, relevant, and time-bound). SMART goals can help your team keep their eye on the R&D prize, maintain momentum and even engender a more innovative approach to delivering your R&D strategy. Crucially, the achievable component will ensure that you and your team avoid chasing pie-in-the-sky outcomes and timeframes that could demotivate and detract from real progress.[2]
3. Identify your funding and other resources
Recognising which resources you need and in what quantities is where the rubber really hits the road for your R&D implementation. You could have the best strategy in the world. You could know where you are in your commercialisation journey and have set SMART milestones and KPIs. But if you have no capital (financial or human) to fund your R&D delivery, you won’t get far. Once again, your commercialisation stage and R&D goals will inform the resources you need to deliver your R&D. Building a diverse capital stack that suits your commercialisation stage is essential.
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Funding fix
Having a mix of sweat equity, bootstrapping, grants, incentives, debt financing, and equity funding is a great way to maintain cash flow and keep your R&D programs on track. Registering for the R&D Tax Incentive (R&DTI) program is a must wherever you are on your commercialisation journey. And if you’re eligible for the R&DTI refund, accessing your tax refund early with R&D financing is a capital and cash-flow savvy move. For more information about how to create a diverse capital stack and match it to your business stage, read our articles, How to build the best R&D capital stack for your business and Funding tips for every stage of the start-up journey.
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Building your team
People make a business. So, it’s crucial to have the right number of people to work on your R&D. But they also need to have the right skills to deliver it effectively. Take a look at our article for tips on building a team for start-up and scale-up success, Build the start-up team your innovation needs to succeed.
4. Elevate your record-keeping
Don’t be deceived. Although record-keeping is the fourth step, it’s one of the most important. Successful R&DTI refund claims, seamless R&D financing approvals and successful pitches to investors have one thing in common: kick-ass admin. Well-documented and in-depth R&D is the cornerstone of attracting funding. And it’s also essential to all types and stages of R&D. The saying if you can’t measure it, you can’t manage it holds true for R&D delivery. The positive flow-on effects of good record-keeping for maintaining cash flow and sustaining successful R&D set up virtuous circles and will underpin further success for— and investor interest in — your venture. For more information on the importance of record-keeping for the R&DTI and how to attract investor funding, check out articles, Contemporaneous records and the RDTI: what you need to know and Find investors and create a winning pitch for your start-up
5. Select systems for success
As your start-up grows, so will your need for systems and processes or Structural Capital. Putting in place systems and processes will benefit your business, whatever its stage. But early-stage ventures need to balance the potential benefits of systems against the high-degree of flexibility they need. Circle back to where your company is on its commercialisation journey. Next, consider the R&D strategy you’re seeking to deliver. If you have a late-stage start-up or a scale-up, you’re more likely to want to augment your systems to optimise the delivery of your R&D. Assess where you could potentially bring in more processes, systems, and standard operating procedures that will save your business time and money and boost the quality of your R&D outputs. Consider getting certification and accreditations in place, such as ISO 9001 certification, and, if applicable, sign up for the National Association of Testing Authorities (NATA) R&D program.
If you want to start FY 2025 with a roar rather than a whimper, make sure you read both parts of our blog series on R&D. Check out part one, Build a solid R&D strategy for your business in FY 2025 on how to create a solid R&D strategy. Then, follow our five-step process to bring your R&D strategy to life. And remember, funding is the fuel that will drive both your R&D strategy and delivery. So, map out your capital and cash-flow requirements for the new financial year without delay.
[1] www.linkedin.com. (n.d.). Innovation KPI Series: Research & Development (R&D) KPIs. [online] Available at: https://www.linkedin.com/pulse/innovation-kpi-series-research-development-rd-kpis-david-tang-3mnne
[2] www.larksuite.com. (n.d.). Smart Goals for Research and Development Teams. [online] Available at: https://www.larksuite.com/en_us/topics/goal-setting-techniques-for-functional-teams/smart-goals-for-research-and-development-teams