Imagine a young boy searching through the December edition of Intertoys, the Dutch version of the Toys-R-Us magazine. The magazine has over 150 toys, including molding clay, step bikes, board games, M.A.S.K and G.I Joe action figures, Transformers, ThunderCats, and tons more.
His eyes are focused on the pages dedicated to LEGO. The boy finds himself overcome with joy, thinking about all the possibilities to expand his LEGO city. Will he ask for the police station, the gas station, or maybe the medieval castle? He tries to imagine how each enhances his city and the additional stories they can bring.
This young boy was me back in 1986.
LEGO delivered on its mission to inspire and develop the builders of tomorrow. How do I know that to be true? Well, here I am as a product leader who is curious and enjoys experimenting and trying new ways to devise, innovate, and to meet and exceed customer needs.
LEGO is a prime example of a company that recognizes the value of being customer-obsessed, researching, observing, experimenting, and trying over and over again to build what excites and inspires generations to come. It truly harnesses the power of research and development (R&D).
In this guide, we’ll explore what R&D is, the different types of R&D, and how it can inform product development. We’ll also show you how research and development influence go-to-market and help determine whether a launch is successful.
Table of contents
- What is research and development (R&D)?
- Research and development (R&D) vs. product development
- R&D and the product development lifecycle
- 3 types of R&D
- How to incorporate R&D into the product development process
- How to analyze and interpret the results of R&D
What is research and development (R&D)?
Research and development (R&D) refers to activities and investments directed toward creating new products, improving existing products, streamlining processes, and pursuing knowledge.
The main purpose of R&D is to promote innovation and, in doing so, drive growth and increase competitiveness. Additionally, by improving processes and finding efficiency gains, R&D can lead to cost savings.
In some industries, R&D is necessary for regulatory compliance and to maintain or improve product quality.
For an example of how R&D can impact a company’s growth, let’s look a LEGO’s research and development process.
LEGO works to create new building block shapes and designs and endeavors to improve their performance and safety on an ongoing basis. One of LEGO’s primary R&D efforts aims at developing sustainable production methods.
In 2015, the company invested nearly $150 million into sustainable materials R&D. It’s important to its mission to leave a positive impact on the planet for future generations to inherit.
We’ll refer to the LEGO examples throughout this guide to show what research and development efforts look like in the real world.
Research and development (R&D) vs. product development
It’s tempting to say that R&D and product development are one and the same, but while they overlap, not all product development is R&D.
To qualify as true, authentic, and real R&D, an activity must meet specific criteria that make it SUPA (yes, I just created that acronym).
SUPA stands for:
- Systematic — R&D must follow a systematic approach to solving problems or creating new products
- Advancement — R&D must involve either the creation of new knowledge, a significant improvement to existing knowledge, or a significant advancement in overall understanding
- Purpose — R&D must have the primary purpose of creating new knowledge, improving existing products radically, or creating new ones
- Uncertainty — There must be an element of uncertainty or risk involved in the work. This means you can’t always anticipate the outcome with confidence
As a product manager, most of the above should be familiar. As Marvin Gaye would have said, R&D and product management work together just like music.
R&D and the product development lifecycle
Research provides you with the necessary information and insights to inform and guide your product design. Development helps you bring ideas to life, validate them and then build and commercialize them.
The product development lifecycle is as follows:
- Ideation and concept development
- Design and prototyping
- Launch and commercialization
Let’s zoom in on each stage to see how R&D plays a role in every aspect of product development.
The research phase involves systematically gathering market data, understanding the competitive landscape, and assessing customers in their current use of your product and their unmet needs. R&D helps you find the next big thing or game changer that gains you more market share.
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2. Ideation and concept development
This step focuses on generating new ideas and concepts that push the boundaries of what you know. It requires looking at new ideas at a high-level and evaluating their potential feasibility.
3. Design and prototyping
Dip your toes further into the development waters — but make sure not to step on a LEGO while doing so.
The design and prototyping stage is where you create your hypothesis, conduct experiments, create designs, and prototype solutions to validate the assumptions made.
During the development stage, any prototypes that fail to deliver advancements are abandoned. Those passing the validation are ready for development consideration.
5. Launch and commercialization
The activities described above will aid in making informed decisions about the product launch, pricing, and go-to-market strategy.
Example: How does R&D influence go-to-market?
Let’s refer back to our example:
LEGO was hugely successful through R&D when bringing the LEGO Mindstorms line to market.
This line empowers users to build and program robots using LEGO bricks and a microcomputer. The creation of the product line involved a multidisciplinary approach. It combined expertise in product design, software engineering, and electronics.
The R&D process started with research that identified the need for a product that allowed users to experiment with and learn about robotics.
LEGO then went through intensive ideation iterations and decided to work with experts in the field to design a system that would be easy to use and accessible to people of all ages and skill levels.
The design and prototypes were thoroughly tested and proved to validate assumptions.
The resulting product was a great success.
3 types of R&D
There are several types of research and development that you can pursue. Each type requires different approaches, resources, expertise, and generates different outcomes.
You can choose to focus on one or more R&D types, depending on your strategic objectives, resources, and capabilities.
Let’s have a look at the three major types of R&D:
Basic research aims to increase knowledge and understanding of a particular subject, with no immediate application in mind.
LEGO continuously explores new methods for connecting building blocks to each other. This research could involve looking into new materials or design principles that could improve the strength and stability of the connections between the blocks.
Applied research focuses on solving specific practical problems and developing new or improved processes, services, or products.
To reduce its carbon footprint, LEGO is researching a new plant-based plastic for its building blocks. This new material, made from sugarcane, replaces traditional petroleum-based plastic.
Experiment research involves designing, building, and testing a prototype to evaluate the feasibility and potential of new processes, services, or products.
LEGO is developing building sets that incorporate augmented reality (AR) technology. The R&D effort combines applied research with experimental development, as the company seeks to create a new product that utilizes AR to enhance the building and play experience.
How to incorporate R&D into the product development process
So you want to incorporate R&D into your product development process. Kudos to you!
Practice makes perfect. Before looking at a few ways to do this, it is important to remember that incorporating R&D into your product development process is a continuous endeavor and requires adjustments along the way.
The following strategies will help you incorporate R&D:
- Prioritize R&D
- Foster a culture of innovation
- Embrace experimentation
- Build user-centered
- Collaborate with external partners
The obvious one here is to ensure that R&D is a priority within your company and resources are freed up. This could include dedicating a portion of the budget, allocating capacity, or setting aside dedicated R&D time.
Foster a culture of innovation
Encourage a culture in your company that values and supports innovation, experimentation, and risk-taking. It could include encouraging employees to pursue their own interests and providing them with the resources to do so.
Embrace experimentation, prototyping, and testing
R&D-ers love experimenting and testing their assumptions through building hypotheses, prototyping, and testing. It allows you to validate ideas, refine designs, identify and address any issues or limitations before bringing a product to market. As a product manager, you probably already have incorporated some of these practices. If not, I highly encourage you to do so.
To find an opportunity you will need to discover and unravel a need. User-centered building helps ensure that products and services are designed with the end-user in mind, leading to better, more effective problem-solving, and solutions to meet the needs of the people who will be using them.
Collaborate with external partners
Consider partnering with external organizations, such as universities, research institutes, or other companies, to help drive R&D. This can provide access to additional resources, expertise, and perspectives.
Example: How does R&D influence product development?
Referring back back to our example:
LEGO places a strong emphasis on user-centered design. It conducts user research to understand their needs, preferences, and behaviors and incorporate those findings into product design and development.
LEGO also collaborates with a variety of external partners, including universities, research institutions, and other companies, to drive innovation and R&D. For example, it has worked with the Massachusetts Institute of Technology (MIT) on several projects.
LEGO uses rapid prototyping and testing to iterate and improve its products and encourage employees to be creative and innovative. It does this through the LEGO IDEAS program, which provides a platform for employees to submit and vote on new product ideas.
How to analyze and interpret the results of R&D
It goes without saying that analyzing and interpreting the results of research and development is crucial. How else will you validate or disprove hypotheses, determine the success or failure, and inform future R&D decisions?
Here are some steps that will help you out:
- Define the objectives and hypothesis
- Gather and organize data
- Analyze the data
- Interpret the results
- Validate the results
- Communicate the results
- Use the results to inform future R&D decisions
1. Define the objectives and hypothesis
When you want to analyze results, it’s crucial to have a clear understanding of what you set out to achieve and what you expected to see.
2. Gather and organize data
Collect all relevant data and organize it in a way that allows for easy analysis and interpretation.
3. Analyze the data
Use appropriate statistical methods to analyze the data, such as hypothesis testing, regression analysis, or analysis of variance (ANOVA).
4. Interpret the results
Based on the analysis, interpret the results and draw meaningful conclusions. This may involve identifying patterns, correlations, or relationships between variables.
5. Validate the results
Validate the results by checking for consistency, accuracy, and reliability. It may also be necessary to perform additional tests or experiments to confirm or refute the results.
6. Communicate the results
Communicate the results of the R&D project to stakeholders, including management, investors, customers, and employees. This may involve presenting data, charts, graphs, or other visual representations of the results.
7. Use the results to inform future R&D decisions
Use the results of the R&D project to inform future R&D decisions, including what to research next, what to improve, and what to commercialize.
Proper analysis and interpretation of R&D results are crucial to make informed decisions and drive innovation and growth.
There are various strategies you can implement in your product process. It is key to define your objective and expected results and have a structured process to validate R&D success.
Featured image source: IconScout
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