Performance measurement procedures that support innovativeness rather than hamper it

This paper addresses the contemporary challenges in increasing firm-level innovativeness and developing appropriate performance metrics. The authors discuss these challenges and provide a literature review on the innovation enhancing factors in service industries. They subsequently study the case of a multinational telecom company that tries to renew its innovative capabilities after a restructuring. An interpretative approach, based on employee focus group interviews and an extensive management workshop, is taken to co-develop context specific factors that enhance innovativeness. These factors include, amongst others, personal recognition and acknowledgement for an innovative achievement, available time, customer intimacy, and a clear innovation strategy. The identified factors will be used in a follow-up research aimed to develop performance measurement procedures that support the company to develop and exploit its innovative capabilities

R&D performance measurement: more than choosing a set of metrics

In this article the results are presented of an empirical study focusing on the effectiveness of R&D performance measurement practices in the Netherlands. First, a theoretical examination of the subject ‘R&D performance measurement’ is given within the context of performance control. A distinction is made between feedback and feed forward control and between the R&D function and the R&D organisation. Subsequently, a description is given of the current practices of R&D performance measurement in terms of measurement purposes, metrics, measurement techniques, norms setting, etc. Furthermore, the influence of contingencies on measurement system design is explored. The data for this research were gathered by means of a survey and nine in‐depth interviews. Generally, managers evaluate their measurement systems as being quite valuable, having a positive impact on performance. The findings described in this paper can be used as references for managers to benchmark their R&D measurement procedures: in this respect we distinguish highly and hardly effective measurement procedures. The most important characteristic that seems to distinguish the most effective systems from the less effective ones is customer focus

Design principles for the development of measurement systems for research and development processes

Based on a comprehensive literature review and the activities of numerous case study companies, it is argued in this paper that performance measurement in R&D is a fundamental aspect to quality in R&D and to overall business performance. However, it is apparent from the case companies that many companies still struggle with the issue of R&D performance measurement. Excuses for not measuring are easily found, but there are also empirical examples and literature available with suggestions how it can be done. In this article this literature is reviewed and placed within the context of general performance control and contingency theory. Furthermore, the main measurement system design parameters are discussed and some basic system requirements are described as well as several design principles that can be useful for those who accept the challenge of establishing a meaningful measurement system

Ethical dilemmas in performance measurement

In this article we discuss the ethical dilemmas facing performance evaluators and the "evaluatees" whose performances are measured in a business context. The concepts of role morality and common morality are used to develop a framework of behaviors that are normally seen as the moral responsibilities of these actors. This framework is used to analyze, based on four empirical situations, why the implementation of a performance measurement system has not been as effective as expected. It was concluded that, in these four cases, unethical behavior (i.e. deviations from the ethical behaviors identified in the framework) provided, at least to some extent, an explanation for the lower than expected effectiveness of the performance measurement procedures. At the end of the paper we present an agenda for further research through which the framework could be further developed and systematically applied to a broader set of cases

Performance measurement in industrial R&D

Currently, the need for R&D performance measurements that are both practically useful and theoretically sound seems to be generally acknowledged; indeed, the rising cost of R&D, greater emphasis on value management and a trend towards decentralization are escalating the need for ways of evaluating the contribution of R&D to corporate performance. However, although recent research and writing on the subject shows that the challenge of developing such sound measurements has been taken up by many academics and organizations, it is also clear that there is no generally applicable approach.\ud \ud In this review, we consider various approaches for measuring the performance in industrial R&D and identify their key characteristics. We also include a brief summary of the ‘history’ of performance measurement in R&D, which shows that although there are some new ways of looking at the issue there are many examples from the past that can contribute to our current thinking.\ud \ud The approaches found in the literature and practice are very varied in their application, some being more suitable for the project level, others for the R&D department, and some for the development process or for the organization as a whole. Furthermore, the uses of the approaches tend to be different. For example, some approaches are intended to justify the continuation of investment in R&D to upper management, whilst others are more suited to support learning and self-correction by empowered R&D teams. In this paper these uses, or ‘functions’, of performance measurement and a taxonomy of typical subjects of measurement in R&D environments are explored.\ud \ud Finally, we conclude the review with a discussion of some limitations of the growing literature on R&D performance measurement.\u

Organisation and management of research and development facilities - from cost to profit focus

In this publication, we present the main findings of a research project into differences in organisation, management and activities between R&D cost centres, semi-profit centres, profit centres, and independent R&D businesses. First, a theoretical framework is presented and then the empirical findings are reported. It is concluded that there are notable differences between cost and profit-oriented R&D structures relating to the degree of freedom in decision making on research management topics, the balance among types of R&D activities, strategy formulation, performance evaluation, marketing and management demands imposed on the capabilities and attitude of the staff. Furthermore, it is observed that semi-profit centres have the most challenging task as they are in an invidious middle position they have to bid for internal projects in order to cover their costs while their freedom to attract external customers or to use a cost plus transfer price is usually limited

Design of a Research Performance Measurement System: The Case of NIAB

At NIAB, a UK based company that provides research, services and information to the agricultural and food sector, a system has been designed that helps to assess and manage the growing research programme of the company. Since the company was ‘privatised’ four years ago, research activities have increased and moved away from solely applied research to a mix of applied and more fundamental research. Being a key element of the new developed company strategy, research now plays an increasing important role in broadening the scope of the company and keeping current services competitive by driving innovation. All research at NIAB is externally funded. In this paper we report on the process to design NIAB’s performance measurement system, for which the Performance measurement system Systematic Design Approach was used. The design process was started with an elaborate structured problem analysis of the research process and its inter and extra–organisational context. Based upon this analysis, firstly a conceptual and secondly a detail design of a performance measurement system was made. To maximise the leverage from research, the system has been designed to optimise the value delivered to the funder as well as the value delivered to internal customers in the form of knowledge that drives innovation

Creating and Justifying Research and Development Value: Scope, Scale, Skill and Social Networking of R&D

In this paper we describe a framework for analysing the creation and justification of Research & Development. The 4S framework is developed for analysing the scope, scale, skills and social network aspects of Research & Development value. The framework is based on social system theory, a process contingency model, and recent Research & Development metrics. We present a first empirical assessment based on a workshop using the 4S framework for leveraging Research & Development. Results that assist in the assessment of value creation utilising R & D within networks are very relevant in high tech industries. The multi–dimensional process approach of this framework seems promising for understanding and managing R&D value creation, but needs further operationalisation. Case studies are described and a Dutch network on leveraging R&D has been initiated