Volume 5, Issue 11- December 1, 2004
GGI RapidNews is published approximately once a month.

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In This Issue

2004 METRICS SURVEY SELECTED RESULTS

NEWS & NOTES - Redesigned Wisdom iStore, Electronic Market Research Reports

MANAGEMENT PRODUCTIVITY - Corporate R&D Scorecard

2004 METRICS SURVEY - 2004 Survey Results Now Available

BOOK REVIEW - Hiring the Best Knowledge Workers, Techies & Nerds

FEATURED iSTORE PRODUCT - Proactive and Predictive R&D Metrics Expert Clinic [Presentation Slides]

NEW iSTORE PRODUCTS - New Market Research Reports

NEW WEB CONTENT - New GTK: Medical and Health; Updated Calendar

WEBINARS OF INTEREST - Sopheon's Winning Practices for Product Development

MANAGEMENT PRODUCTIVITY - APQC R&D Productivity Benchmarking Study

TELEVISION EVENTS - Alexander Haig's World Business Review

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2004 METRICS SURVEY SELECTED RESULTS

GGI's 2004 Product Development Metrics Survey has just been published. The 2004 Survey focused on the product selection process and tools, the IP management process and tools, and metrics. Each month over the next five months, GGI will share with RapidNews readers selected results from each section of the survey. This month we present selected results from the first section, "Product Selection Process."

- The more rigorous 2.5-Step (or 3-Step) product selection process was used by 47% of companies, more than the 2-Step process for the first time since GGI began surveying in 1998.

- 73% of companies using either a 2.5 or 2-Step process held formal reviews at their Step 2 meetings and 91% held formal reviews at their final approval to development step, versus informal reviews.

- The most widely used decision-making group for product selection was a "single council or steering committee reviews and decides," used by 39% of respondents.

Next month, look for results on the second section, "Product Selection Tools."

NEWS & NOTES

Redesigned Wisdom iStore: We have just restructured and renamed our Internet store, the Wisdom iStore. You will now find the iStore easier to use, with a user-friendly main page to help you find what you are looking for. Browse the entire product catalog, choose from product categories or make a purchase directly - it's now easier to navigate and find the right information to fit your needs. To see the new look of the Wisdom iStore, go to http://www.goldensegroupinc.com/iStore/store.html.

Electronic Market Research Reports Now Available: We have just restructured the delivery and pricing of all research offerings, including our latest 2004 metrics survey reports. In addition to the currently available hard copy versions, you can now purchase downloadable electronic reports for all of our metrics surveys. We are able to offer a great value by making this research available to your entire corporation and even to your suppliers, based on your choice of licenses. These electronic reports are in full color and are readily sharable within your organization. This new electronic option improves your firm's access to GGI's powerful R&D research, making the reports even more usable and helpful in your R&D process. Check the Product Development Metrics Research section of GGI's Wisdom iStore for more details: http://www.goldensegroupinc.com/cgi/catalog.cgi?display_p355

MANAGEMENT PRODUCTIVITY

Corporate R&D Scorecard

"Corporate R&D Scorecard: 2004", Technology Review, Massachusetts Institute of Technology: Volume 107, Number 10, December 2004, pages 60-71.

Technology Review has just published its 2004 Corporate R&D Scorecard in the December 2004 issue, reporting annual R&D spending of the world's top 150 technology companies for fiscal year 2003. Companies were assigned to one of 14 sectors, based on their primary business: Aerospace/Defense, Biotech, Chemicals, Computer Hardware, Computer Software, Consumer Products, Electronics/Electrical, Energy, Heavy Machinery, Industrial Conglomerates, Pharmaceuticals/Medical Devices, Semiconductors, Telecommunications, and Transportation. Although there has been a decline in U.S. R&D spending, especially in telecommunications and industrial conglomerates, there have been strong increases in the biotech and computer software sectors. Selected results are presented here.

The overall top spender for R&D once again was Ford with $7.5 billion, followed by Pfizer at 7.1 billion and DaimlerChrysler at $6.7 billion. Automotive, computer, and pharmaceutical companies make up the majority of companies with the highest R&D spending. The lowest-spending sector, dollar-wise, was Energy, which averaged $586 million for the 3 companies listed.

When the results are examined in terms of R&D spending as a percent of sales, Semiconductors and Biotech ranked tops at 22% and 21% average, respectively, for the sector. Broadcom (Semiconductors) spent 41% of sales on R&D. The lowest-spending sectors, percentage-wise, were Consumer Products and Energy with an average of 2% of sales spent on R&D in each sector.

2004 BIENNIAL METRICS SURVEY

2004 Product Development Metrics Survey - Product Selection, IP Management, and Top Corporate Metrics: The Summary and Highlights Reports for GGI's 2004 Biennial Product Development Metrics Survey have just been published and are now available for purchase by the public through GGI's iStore. The composite results across the entire survey population of this year's survey were first presented to the public by Brad Goldense at Management Roundtable's 9th Annual Metrics Conference on September 30, 2004 in Chicago. These reports are completely based on primary research performed by GGI researchers. The research includes 202 respondent companies. There was a 5% response rate.

Why would these reports be of value to you? The first two sections cover the product selection process and tools used. The companies that add rigor to their process make better decisions, leading ultimately to more successful products. The statistically accurate survey illustrates the current industry practice for selecting products, the degree of usage of 21 different tools, and the believed ability of these tools to generate innovation and/or generate registerable IP. The third and fourth sections of the survey are groundbreaking research in the processes and tools companies use to manage intellectual property. It is believed that the importance of IP in the next 2 decades will go from 10% of a company's valuation to perhaps as much as 90% of a company's valuation on Wall Street. This report, to our knowledge, is the first definitive survey of the processes, tools, and systems used for IP. The final section of the report specifically lists the metrics that are used by the top of R&D organizations in industry to measure the overall performance of R&D in pareto order. If you are trying to find the few metrics that your company should choose to measure overall R&D performance, you cannot be without this last section.

McKinsey & Company, Texas Instruments, Rockwell, Kimberly Clark, and Datacard are representative of companies that purchase market research from GGI.

The 2004 Survey focused on the following 5 areas of product selection and IP management:

•  Product Selection Process


•  Product Selection Tools


•  IP Management Process


•  IP Management Tools


•  Top Corporate Metrics Used in Industry RD&E

The 3 versions of the survey results reports that we offer for sale to the public are

1. 2004 SURVEY HIGHLIGHTS: A text-only report (75 pages), including the full text of all the results and analysis of the survey population analyzed as a whole,

2. 2004 SURVEY SUMMARY: A report of composite results, where the survey respondents are analyzed as a whole (149 pages, including a full set of graphics), and

3. 2004 SURVEY RESULTS: The most detailed report, complete with the composite results and "special cuts," where the survey population is segmented and analyzed in the following groups: Public vs. Private, Smaller vs. Larger, Process vs. Repetitive/Discrete vs. Job Shop, Higher Technology vs. Lower Technology, and More vs. Fewer Employees (TBD pages).

Please note that the 3rd report, Survey Results, is expected to be available in January, 2005.

For the first time, we are now offering individual sections of the research report, as well as combined product selection sections (process and tools) and combined IP management sections (process and tools). You can now purchase just a section of the whole report to meet your specific needs. A comparison of the product selection process and the IP management process is included only in the full 2004 Survey Summary report.

We have improved the quality and amount of descriptive information we provide for the public. The links below will be quite useful in understanding what was researched and why.

A brochure describing the survey in more detail as well as the reports available can be directly downloaded here: http://www.goldensegroupinc.com/04MktBro.pdf

A description of the survey including demographics, report table of contents and selected results can be directly downloaded here: http://www.goldensegroupinc.com/biennial/surveydesc/2004SurveyDescription.pdf

A detailed description of each section of the research, including the focus of the research can be found here: http://www.goldensegroupinc.com/2004ResearchDescription.pdf

These reports are available in the Market Research section of GGI's iStore (http://www.goldensegroupinc.com/iStore/store.html).

Each survey participant received a complimentary copy of the Summary Report. All participants should have already received an email letter regarding the complimentary copy of the Summary Report. Any survey respondents who did not receive this email letter from us should contact Richard James at rjj@goldensegroupinc.com or 781-444-5400, x202.

BOOK REVIEW

Hiring the Best Knowledge Workers, Techies & Nerds: The Secrets & Science of Hiring Technical People, by Johanna Rothman. Dorset House Publishing. 2004, 1st edition. 352 pages.

GGI has had an alliance with Johanna Rothman for over a decade. We are pleased to review Johanna Rothman's new book on hiring technical people, which covers the entire process, beginning with defining requirements and planning the strategy, through finding and selecting the best candidates, to managing a successful transition for the new hire. Mistakes in hiring cost firms huge sums of money and can drain energy, time and resources from employees. The process for hiring knowledge workers differs from that for skill-based staff because technical people "are not just the sum of their technical knowledge; they are the sum of both what they know and how they apply that knowledge to the product." This practical, step-by-step book provides the details that can help save time and money by hiring the right people.

The author recommends spending time up front to define the hiring strategy, which identifies why you are planning to hire people. Then you can analyze the job and define the requirements, technical and non-technical, which leads to writing a job description. A sample job analysis worksheet template is provided as well as case studies with completed worksheets. Many different sources are available to find the best candidates, besides job fairs and ads; consider using conferences and professional groups, customer networks and university affiliations to your advantage. The author offers many tips, real-world stories, and pitfalls to avoid for screening resumes and conducting interviews. It's especially effective to use a team approach for interviews, to gain deeper insight and broader perspectives about the candidate as well as to ease the future integration of the new hire. Alternatives and options are presented for when the hiring process does not go as smoothly as planned. A full case study is peppered throughout the book as well as collected in an Appendix. A complete set of customizable templates is provided, which can help you get organized and fully prepared for your next hiring process.

FEATURED GGI iSTORE PRODUCT

Featured Item: Each month, or every other month, GGI's iStore features one item that we discount 40%. The current Featured Item is "Proactive & Predictive R&D Metrics Expert Clinic [Presentation Slides]" (T41)

Learn how to identify and take advantage of proactive and predictive metrics that can help you see what's ahead. Use of high-level predictive metrics early in the R&D process can help avoid surprises, extra costs and being late to market. If Dell is a day late to market, they lose 2% of gross margin, as reported in public media. Time to market is especially critical for short cycle time industries such as computers with 12-18 month cycles, so if these metrics can keep you from being late by even one day, it could save you millions. Other proactive and predictive metrics could help you avoid wasting R&D investment on products that never launch. GGI's 2002 Metrics Survey found that the average project results in 3 saleable SKUs, but only 2 typically launch. Predictive metrics can help avoid wasting the hundreds of thousands of dollars spent developing this one third fallout that never launches, by killing less promising projects earlier or by ensuring that all developed projects do get launched. If use of these metrics saves you even one engineering change order (ECO), you will have gained back the cost of this presentation tenfold, since even the least expensive ECOs cost approximately $1500 to $3000.

This Expert Clinic presentation, first presented at Management Roundtable's 2003 8th Annual R&D Metrics Conference last fall, provides a definition of metrics frameworks and how they are used through the R&D process. An overview of GGI's Linked Metrics Portfolio Method (TM) is provided as a framework to measure performance. Numerous case studies are presented for proactive and predictive metrics, with examples in industries such as semiconductors, computers, and diagnostic instrumentation.

This presentation will help you understand and master this emerging category of measures, which can put your company in a position to manage out the variation in R&D investments and outcomes in advance. This can in turn lead to

•  faster time to market,


•  higher revenue and profits,


•  cost savings, and


•  ultimately greater success.

The price for the presentation, "Proactive & Predictive R&D Metrics Expert Clinic," has been dropped from $425.00 to $255.00 a deep discount of 40%. GGI's Featured Item changes approximately every other month and is always offered at a 40% discount. For more information or to purchase this valuable report, go to

http://www.goldensegroupinc.com/cgi/catalog.cgi?display_promo.

NEW iSTORE PRODUCTS

New Items: GGI's iStore has now been updated with 7 new Market Research reports. See details below, or go directly to GGI's iStore storefront:

http://www.goldensegroupinc.com/iStore/store.html

New Market Research Reports

MR32B "Section B: Product Selection Process" [48 Pages]

MR32C "Section C: Product Selection Tools" [44 pages]

MR32BC "Section B & C: Product Selection Process + Tools" [68 pages]

MR32D "Section D: IP Management Process [68 pages]

MR32E "Section E: IP Management Tools" [39 pages]

MR32DE "Section D & E: IP Management Process + Tools" [83 pages]

MR32F "Section F: Top Metrics for R&D" [39 pages]

NEW WEB CONTENT

GTK-Gateways To Knowledge: Your resource for industry and product development related information and contacts offers thousands of links to providers of technologies and services for line management functions. The main entrance to GTK can be found at:

http://www.goldensegroupinc.com/gateway/index.shtml

Calendar of Industry Events MEGA Gateway is one of our top 3 MEGA Gateways. It contains a listing of links to Conferences, Seminars, Distance Learning Centers, Webinars, Colleges & Universities, Executive Education, and Corporate-Sponsored Universities. The calendar has recently been updated with many of the events being held in winter 2004 and spring 2005. If you are looking for a conference or other learning opportunity, check out the Calendar first. This free service for our readers is now front and center on GGI's Home Page. Or, go directly to the Calendar of Industry Events MEGA Gateway at:

http://www.goldensegroupinc.com/gateway/calendar2.shtml

Medical-Health: Find it on the main Gateways page. This NEW Gateway provides links to over 20 different web sites with information on a variety of medical and health topics, such as clinical trials, research, and diseases. The URL is located at:

http://www.goldensegroupinc.com/gateway/med_health.shtml

WEBINARS OF INTEREST

Winning Practices for Product Development: This free, online seminar series is sponsored by Sopheon. These one-hour, online events feature experts and leading practitioners who will share process knowledge and practical advice about ways to improve your product development performance and results.

There is currently one webinar scheduled.

20 January, 2005 - (8:30 am Pacific/11:30 am Eastern/16:30 UK) - Product Champions: Crossing the Valley of Death, presented by Stephen K. Markham PhD, Director of the Center for Innovation Management Studies at North Carolina State University

For more information on these webinars, or to look at the archive of past webinars, go to http://www.sopheon.com/events_onlineseminars.asp.

MANAGEMENT PRODUCTIVITY

APQC R&D Productivity Benchmarking Study

The American Productivity & Quality Center (APQC) is conducting a consortium research and benchmarking study, entitled "Measuring R&D Productivity." Goldense Group, Inc. [GGI] is Subject Matter Expert for this study. This study breaks new ground in understanding the drivers of R&D productivity. Fifteen global sponsors from four continents will benchmark five best practice companies on two continents after a rigorous screening process.

The APQC consortium benchmarking study addresses the following three areas:

1. Identify the areas where improved attention, knowledge, and education would lead to higher R&D productivity. [What are the key areas for best practice?]

2. Use measurement to increase visibility and awareness, which in turn will facilitate enhanced performance in R&D. [What are the measures for these areas?]

3. Determine effective change management activities to support the realization of improved R&D productivity. [How did the best practice companies achieve their practices?]

The kickoff meeting took place on July 20, 2004, and the study was conducted with site visits during October, 2004. The Knowledge Transfer Session occurs in early December. Results remain confidential for 3 to 4 months and then will be available for purchase in February 2005 through the APQC web site.

For information about this study, go to http://www.goldensegroupinc.com/apqc.shtml. For general information about APQC, go to http://www.apqc.org. For general information about Goldense Group, Inc., go to http://www.goldensegroupinc.com.

TELEVISION EVENTS

Alexander Haig's World Business Review: Brad Goldense has made several appearances on Alexander Haig's World Business Review in the past year. Streaming video is available for all shows, which aired on August 4, September 29 and December 15, 2002 and on May 20, 2003. See below for details.

May 20, 2003 Broadcast of September 29th In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr5

December 15, 2002 In-Studio with Alexander Haig (7.5 minutes) on CNBC paid programming: Streaming video for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr3

September 29, 2002 In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment (as well as the entire 30-minute show) is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr2

August 4, 2002 On-Location at GGI (3.5 minutes): This On-Location field report is available in streaming video on GGI's website. To see the program, go to: http://www.goldensegroupinc.com/ggiontv.shtml#wbr1

The web page includes links to download a streaming video player, if you do not currently have one installed on your computer.

For more information on any of Brad's appearances on television, go to:

http://www.goldensegroupinc.com/ggiontv.shtml

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GGI RapidNews is an e-mail publication from Goldense Group, Inc (GGI). Its subject matter includes survey findings, company news, book and article reviews, key industry conferences and R&D information of interest to clients and associates. Please send communications to rn(at)goldensegroupinc.com. Thank you.