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Volume 6, Issue 11- November 2, 2005
GGI RapidNews is published approximately once a
month.
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In This Issue
MANAGEMENT PRODUCTIVITY - Brains Beat
Spending On R&D - Wall Street Journal
UPCOMING PUBLIC SEMINAR - Product Development
Metrics Summit Dec 05
UPCOMING PUBLIC SEMINAR - Prod. Dev.
Innovation Summit Jan 06 - Still Early Bird!!!
BOOK REVIEW - Thinking For A Living
- Thomas H. Davenport
2004 METRICS SURVEY RESULTS - 2004
Survey Results Available
FEATURED iSTORE PRODUCTS - 2004 Survey
Research Articles 6-Pak - Spans Survey!!!
CONFERENCES OF INTEREST - MRT 10th
Metrics, Frost & Sullivan NPD Executive Summit
GATEWAYS TO KNOWLEDGE - A Monthly Feature
CALENDAR OF INDUSTRY EVENTS - A Monthly
Feature
TELEVISION EVENTS - Alexander Haig's
World Business Review
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MANAGEMENT PRODUCTIVITY
In the October 5 issue, RN Editors quoted a recent benchmark
study [Cumin, Journal of Economic Growth, December 2004] indicating
that a country's R&D spending has
a significant impact on overall productivity. However, the
key finding of the study lowered the long held estimate that
R&D drives almost 70% of country productivity to a more
moderate 10-20%. Even the critics agree that this study
removed a lot of agreed errors of prior studies.
Maybe we have a metric for R&D's relation to country
productivity that is somewhat reliable at this point! Now,
how about company spending on R&D. What is its impact
within an industry? Company spending and government spending
together comprise country R&D spending. With the government
piece of the puzzle, the makings of an initial road map to
answer the elusive economic question as to "R&D's
impact" would be near at hand. Finding metrics that are
exactly adjacent is never easy, but this month's featured
productivity finding is a step towards that end.
Brains Beat Spending On R&D
"In R&D, Brains Beat Spending In Boosting Profit",
by Gary McWilliams, Wall Street Journal, October 11,
pages A2 and A13.
On October 11, the Wall Street Journal cited a recent Booz
Allen Hamilton, Inc. study that analyzed "six years of
financial results by 1000 publicly traded companies that are
responsible for the bulk of R&D spending" around
the globe. These top 1000 global companies
spent proportionately greater sums of money than their industry
peers but did not enjoy greater revenue gains or better
profits. In fact, 2004 operating profit was slightly
less by the top 10% of spenders. The bottom 10% of spenders
operating profit was significantly worse however, almost half.
"The finding flies in the face of academic studies and
accepted wisdom on the value of corporate research. It also
comes as researchers warn that U. S. companies need to increase
spending or risk falling behind rivals in China and India,
which are rapidly industrializing."
Conclusion: "once
a minimum level of R&D spending is achieved, better oversight
and culture were more significant factors in determining financial
results"
Conclusion: "no
statistically significant difference when comparing the financial
results of middle-of-the-pack companies with those in the
top 10% of their industry"
Conclusion: "result
was the same when viewed within 10 industry groups or across
all industries evaluated."
There was another finding that was of interest. From a management
and a financial perspective, it is perhaps the most interesting
finding. "R&D spending was positively associated
with one performance measure: gross margins."
Conclusion: "Median
gross margins of the top half of companies measured by R&D
to sales spending were 40% higher than those in the bottom
half."
The WSJ did not elaborate further. One might pontificate
that the difference between gross margin and operating margin
is a measure of a company's ability to efficiently manage
the scale of its operation. This last
finding does seem to indicate that there is a strong relation
between R&D spending and bottom-line results, if only
the scale of the operation is efficiently managed.
UPCOMING PUBLIC SEMINAR - METRICS SUMMIT DECEMBER 2005
Our Sep 05 Metrics Summit resulted in five company teams
of 3-4 people each drafting a proprietary set of R&D metrics
for their company. Two additional teams, composed of individuals
from a dozen companies, created sets of metrics believed suitable
to cause "Innovative" versus "Balanced"
R&D strategies and outcomes. Please join us in our Dec
05 Metrics Summit to realize these tangible and useful outcomes
for your company.
There are three comprehensive and powerful metrics seminars
- MPDII, PPRD, and PDMP - now all integrated into a single
comprehensive offering in a 3-Day format, the Dec
05 Metrics Summit. On Tuesday, zero in on several
specific key metrics subjects of management interest. On Wednesday,
improve your dashboard with metrics that predict outcomes.
Finish the week by creating a set of metrics for R&D in
your company. This set of seminars launches you on the way
to improve your performance through metrics.
The seminars offered are
- Measuring Product Development II (MPDII) - December
6 - This one-day seminar gives you powerful techniques
to measure your product development process. These advanced
techniques and processes cover those areas of product development
that are hardest to measure but deliver the most value by
measuring them, such as loading the product development
pipeline, hurdle rates, tradeoff analysis, and risk and
complexity analysis. Click to view
the abstract for MPDII, or download
the table of contents.
- Proactive and Predictive R&D Metrics (PPRD)
- December 7 - In this one-day seminar you will understand
and create meaningful, forward-looking metrics for R&D.
The seminar helps you move from reactive measures of past
activity to planning, proactive, or predictive measures
that improve the predictability of R&D activities and
projects that lead to bottom-line results. Four metrics
topic areas are covered: planning, proactive, predictive,
and reactive metrics. Click to view
the abstract for PPRD, or download
the table of contents.
- Product Development Metrics Portfolios (PDMP) -
December 8 - In this one and a half-day seminar you
will learn and use the Linked Metrics Portfolio (TM) Method,
a powerful, step-by-step methodology to a create linked
metrics portfolio. A linked metrics portfolio is a key tool
for managing the R&D organization overall as well as
the projects, functions and improvement initiatives within
R&D. Click to view
the abstract for PDMP, or download
the table of contents.
All seminars feature case studies and examples from a range
of industries and the practical tools you need to implement
metrics in your organization.
Discounts are available for teams of three or more people
attending from the same company.
If you are planning on attending, register
for the Metrics Summit.
For more details on the Product Development Metrics Summit,
go to GGI's
web site.
To download a brochure containing more details, schedule
and pricing, click on download
brochure.
UPCOMING PUBLIC SEMINAR - INNOVATION SUMMIT
GGI will sponsor its first ever Product
Development Innovation Summit on January 17-19, 2006
in Norwood, MA. Please join us for eight comprehensive modules
that surround the subject of Innovation in R&D and Product
Development.
The Innovation Modules that will be offered are:
All modules feature some level of case study discussion and
examples from a range of industries. There will be at least
three significant group exercises where attendees will "try
out" well regarded innovation methodologies. As with
all GGI Summits, we will pave the road for you to implement
practical tools in your organization.
Discounts are available for teams of two or more people attending
from the same company.
If RN readers are planning on attending, please register
now for the Innovation Summit. The
Early Bird Registration Period concludes November 21, 2005.
Be an Early Bird and save up to $150 per person.
For more details on the Product Development Innovation Summit,
please go to GGI's
web site.
BOOK REVIEW
Thinking For A Living: How to Get Better Performance and
Results from Knowledge Workers, by Thomas H. Davenport.
Harvard Business School Press. 2005, first edition. TBD
pages.
Tom Davenport's latest book offers more useful management
tools and techniques for the 21st century. Since his early
reengineering days at Index Group in Cambridge, Massachusetts
where he, Michael Hammer, and Brad Goldense were members of
the group of the team that pioneered process engineering and
reengineering, Tom has gone on to write some of the most useful
texts available for the knowledge economy. His first book,
which was the first text that really dissected the subject
of process reengineering, is the basis of most improvement
activities in corporations for the past decade. His subsequent
books addressed the issues of managing organizations that
run by processes. His latest book offers spot on approaches
and techniques for the ever more elusive ability to manage
professionals that are truly knowledge workers. Certain categories
of knowledge workers, Dr. Davenport offers, are processes
in themselves.
Tom is methodical and structured in many of his writings.
He again shows his ability to distinguish between fine lines
in organization structure and behavior through his articulation
of frameworks that can be applied analytically and managerially.
Tom is out in front. He is about what is coming or should
be already, and not about what has been. For anyone that is
directing or leading professionals that are knowledge workers,
this book is probably a must read.
Among several useful findings in this book, and the survey
data that underlie the findings, was a list of ten attributes
of that underlie one of the most important attributes of good
knowledge workers -- they have mastered personal information
management.
1. They avoid gadgets.
2. They limit the number of devices they use.
3. They invest effort in organizing information.
4. They aren't missionaries.
5. They get help.
6. They use assistants -- to some degree.
7. They haven't gone fully electronic.
8. They decide what information is most important to them
and organize it well.
9. They use lists.
10. They adapt the use of tools and approaches to the work
situation.
You can find more information about this book or purchase
it through Amazon.
2004 BIENNIAL METRICS SURVEY RESULTS
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 are now available for purchase by the public
through GGI's
Wisdom iStore. These reports are completely based on primary
research performed by GGI researchers. The research includes
202 respondent companies. There was a 5% response rate.
McKinsey & Company, Texas Instruments, Rockwell, Kimberly
Clark, JDS Uniphase, Shure, Curtiss Wright Flight Systems
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
We have already shared many results with GGI RapidNews readers
since we began this line of business in 1998. 2004 Survey
results ran in six RN issues, RN V5I11 - RN V6I5, which may
be found in the RN
archives, along with results from prior years.
Some additional complimentary information about the survey
is available:
The 2 commercial versions of the survey results that we currently
offer for public purchase 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, and
2. 2004 SURVEY SUMMARY: A report of composite results, where
the survey respondents are analyzed as a whole (149 pages,
includes a full set of graphed answers for every survey question).
Individual sections of the research reports, as well as logical
combinations of sections are also available. All reports are
available in printed or electronic versions.
These reports are available in the Market Research section
of GGI's
Wisdom iStore.
FEATURED GGI iSTORE PRODUCTS
Discounted Item: Each month, or every other month,
GGI's iStore features one item that we discount 40%. The current
Featured Item is "2004 Product
Development Metrics Research Summary Article 6-PAK"
(B001),
a package of six one-page articles. All articles were published
during the first six months of 2005 in the well regarded 2PLM
ezine.
Page 1 gives an overview of the focus areas of GGI's 2004
Product Development Metrics Survey and acts as an introduction
to five subsequent authored Articles corresponding to the
five focus areas of the survey.
Page 2 presents results in the area of the product selection
process. The rise in use of the more sophisticated multi-step
process is explained and analyzed. The level of formality
of product selection decisions and the most common decision-making
group are detailed. Based on the results, conclusions are
drawn regarding trends in the product selection process that
can greatly benefit companies.
Page 3 presents results in the area of the product selection
tools and techniques in use. Out of a list of 21 popular product
selection tools, respondents chose their top tools used for
product selection. Also discussed are the most common product
selection tools that are believed to generate innovative thinking
and intellectual property that can be legally protected through
formal registration. Key opportunities are presented for companies
to gain more value from their product selection process.
Page 4 presents results in the area of the intellectual property
(IP) process. Learn about the growing importance of IP and
the process companies use to make decisions regarding IP management.
Results from GGI's 2004 research provide details on the number
of steps in the process, the number of people involved in
decisions, and the frequency of IP registration. The maturity
of the IP management process is compared to the product selection
process
Page 5 presents results in the area of intellectual property
(IP) tools. In the context of the growing importance of IP,
learn about the tools and systems companies use to protect
and manage their IP. Results from GGI's 2004 research provide
details on the most common forms of IP protection as well
as the most commonly used systems to manage the inventory
of IP. The significant barriers are also discussed, including
the costs and lead times associated with IP registration.
Page 6 presents results in the area of corporate R&D
metrics used in industry. Top corporate metrics currently
in use are listed and compared to prior surveys to indicate
trends. The rise in use of metrics used to measure R&D
as a whole is explained and analyzed, and predictions for
developments in the next twenty years are offered.
The price for this article package, "2004 Product Development
Metrics Research Summary Article 6-PAK," has been dropped
from $170.00 to $102.00, 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 order this material, please go
to GGI's
Featured Item.
Newly Released Item: While not a featured item, we
want to make you aware of a newly released technical paper,
"The CEO's View On Measuring
R&D" (T55).
This paper describes several areas of interest to CEOs when
measuring R&D. Metrics that are used to capture return-on-innovation,
manage capacity, manage functional departments, and drive
project outcomes are highlighted along with emerging intellectual
property metrics. The paper contains the Top 60 R&D metrics
used in industry today along with the research indicating
the number of measures used by corporations and separately
R&D organizations to measure themselves. The paper contains
a significant amount of detailed results from GGI's most recent
primary research, the 2004 Product Development Metrics Survey.
For more information, or to order this new technical paper,
please go to GGI's
Wisdom iStore.
CONFERENCES OF INTEREST
MRT 10th Annual Metrics Conference: Management Roundtable
will hold its 10th annual conference, "Product Development
Metrics: Achieving the Full Value of R&D," on November
7-9, 2005 in Chicago, IL. The conference will examine
strategies, best practices, methods and tools leading companies
are using to increase overall R&D performance. This year's
program features an exceptional line-up of metrics gurus,
thought leaders, advanced practitioners and folks in the trenches
bridging theory with reality and making it work. This year's
conference keynote speakers are GGI's Brad Goldense, Dr. Robert
Cooper (author of "Winning at New Products"), Don
Reinertsen (author of "Managing the Design Factory, Developing
New Products in Half the Time"), Watts Humphrey (founder
of Software Process Program at Carnegie Mellon University's
Software Engineering Institute), and Robert Schur (Senior
Vice President of STATS Inc.).
Brad Goldense will deliver the keynote address, "The
Future of Product Development Metrics: Corporation, Projects,
& Functions," to explore past, present
and emerging trends in the evolution of product development
metrics. Brad will also conduct a full-day, pre-conference
workshop on Monday, November 7, 2005 on "Product Development
Metrics Portfolios."
For more information or to register, go to MRT's
web site.
Frost & Sullivan Executive Summit: Frost &
Sullivan will hold its Executive Summit, "Innovations
in New Product Development, Management & Marketing 2005,"
on November 6-10, 2005 in Miami,
Florida. The summit will present new ideas and
creative strategies for portfolio and product planning, management,
and marketing vital to propelling product profitability and
market performance.
Brad Goldense will deliver the keynote address, "Innovation
Management: From Ideation to Commercialization,"
on Thursday, November 10, 2005. Thursday's program features
a special focus on emerging technologies.
For more information, or to register for the Executive Summit,
go to Frost
& Sullivan's web site.
GATEWAYS TO KNOWLEDGE
GTK-Gateways To Knowledge is a DIRECTORY OF THOUSANDS
OF LINKS to providers of engineering, purchasing, and manufacturing
technologies and services. If you hit the right subjects,
it is more useful than a search engine! The "main entrance"
to GTK can be found at:
http://www.goldensegroupinc.com/gateway/index.shtml
For those of you that do not want to risk going through the
main entrance above, some of the Gateways that we believe
you will find useful or entertaining are highlighted below.
CALENDAR OF INDUSTRY EVENTS
GGI's Calendar of Industry Events contains an up-to-date
listing of links to Conferences, Seminars, Distance Learning
Centers, Webinars, Colleges & Universities, Executive
Education, and Corporate-Sponsored Universities. The calendar
has just been updated with more conferences and seminars throughout
2005. The categories we follow are:
The categories of conferences, seminars, and distance learning
are further organized into the following subject areas:
- Strategic, Knowledge & General
Management
- Marketing & Sales - Mechanical,
Electro-Mechanical, Electrical, & Electronic
- Marketing & Sales - Pharmaceutical,
Biotechnology, & Life Sciences
- Product Development - Mechanical,
Electro-Mechanical, Electrical, & Electronic
- Product Development - Pharmaceutical,
Biotechnology, & Life Sciences
- Manufacturing & Automation -
Mechanical, Electro-Mechanical, Electrical, & Electronic
- Manufacturing & Automation -
Pharmaceutical, Biotechnology, & Life Sciences
- Software, Internet & IT
- Project Management
- Metrics
If you are looking for a conference or other learning opportunity,
check out the Calendar. This free service for our readers
is front and center on GGI's
Home Page. Or, go directly to the Calendar
of Industry Events MEGA Gateway.
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 on GGI's
web site.
December 15, 2002 In-Studio with Alexander Haig (7.5 minutes)
on CNBC paid programming: Streaming video for this segment
is available on GGI's
web site.
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 on GGI's
web site.
August 4, 2002 On-Location at GGI (3.5 minutes): This
On-Location field report is available in streaming video on
GGI's
web site.
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.
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