Chapter 8: Research and Development
As you will recall from the Marketing, “Product” is the second component of your Marketing Mix. When you wrote your Product Strategy, you defined your products and services from your customer's perspective. Here in Operations, you will define them from your company's perspective. Now that you know what your customers' needs are, you can create products and services to fulfill those needs in the best way possible.
As we all know, the world never stands still. This means that in order to compete, your business cannot afford to stand still either. Nowhere in your business is this concept more self-evident than in Operations. Your products and services must continuously evolve or eventually you will be left behind by a continuously evolving world. The key to becoming and staying a front-runner in this vital area of business is Research and Development.
The purpose of your Research and Development department is to develop creative new outputs for your production department. In other words, its purpose is to continuously develop and improve your products and services. This is done through a consistent devotion to innovation, rather like the process of reviewing and updating your Strategic Objectives on a regular basis. Think of Research and Development (R&D) as a long-term, ongoing investment into the future of your business.
Research and Development is an evolutionary process of “constant and never-ending improvement.” This is true whether your business is service based, product based, or a combination of the two. Even if you are a reseller of existing products such as a clothing store, you can still improve packaging, presentation, organization, guarantees, customer service, and product selection. If people come to you for your unique inventory, for example, perhaps you should be continuously striving to expand and improve it.
“When a business ceases to be creative, when it believes it has reached perfection and needs to do nothing but produce — no improvement, no development — it's done.”