Three rules for a winning relationship between R&D and marketing
In companies that invest in innovation, the asymmetry of knowledge between R&D and marketing teams is striking:
On the one hand, R&D teams are made up of experts who have often been in their positions for many years, who have accumulated decades of knowledge and experience in specific fields, and established long-term collaborative relationships with market players, be they customers, suppliers, or competitors in the context of joint research programs. The experience and the network of relationships are such that you are tempted to believe that you know the market.
On the other hand, marketing teams are often younger in their position, smaller in size, a short or medium-term horizon of objectives, and a schedule that is jostled by business life: an important client presentation, a response to a competitor’s offensive, a trade show to prepare, website content to upgrade… the temptations to skirt the slow thinking required for long term strategy are strong.
Because of the complementary nature of their knowledge and their ways to operate, collaboration can yield tremendous value for the company:
- Only the marketing function can synthesize the position of the company within the market, take stock of what works in the market and what does not, identify trends, market segments, decrypt the strategic game of competitors, and go out into the market to collect information to support key decisions: maximum acceptable price, market size, priority customers and geographies, business models to be selected.
- Only the R&D function can enlighten the company about tomorrow’s winning technologies, the competitors’ patent strategies and R&D investments, the technological maturity of a solution, or the state of the art of design and production costs.
Time to improve the Collaboration
Following signals should alert to the need to improve the collaboration:
When R&D…
- talks about the “market”, or shares statements without explicitly referring to marketing and sales information,
- produces unrealistic business plans to justify return on investment,
- proposes a project portfolio that reflects more the personal motivations of the writer than business needs,
- expresses neither a need to upgrade skills, nor a need to add new skills to face new market trends,
- propose projects within the boundaries of inhouse skills and capabilities.
When Marketing …
- does not provide R&D with functional specifications upstream of an R&D project: what are the jobs to be done by the future product ? At what target cost? How will the product usage evolve in the future? How are customers’ priorities changing?
- plans an innovation market launch without factoring in the technical and industrial feasibility milestones,
- presents projected sales figures for the innovations, but without the margins or the development and industrial upfront costs,
- overlooks the competitors’ patent strategy in its competitive differentiation proposals.
Respect, Rules of the Game, Rigor
Based on my experience, Marketing and R&D make their company win by implementing three principles of collaboration:
- Respect: we do not step on each other’s toes. Each party understands the indispensable role of the other in the innovation process, which is a cross-company process, and to which they are only key important contributors.
- Rules of the game: promote a few collaboration routines during the year: R&D project reviews, strategic plan, presentation of market trends. Agree on systematic consultation to prepare decision-making milestones.
- Rigor: transmit information to the other party in due time. Dedicate time and efforts explain to the other party a sometimes-complex situation. The Cartesian doubt of scientists is welcome to clarify ambiguities, ask for more facts, detect hasty shortcuts or weak hypotheses. The holistic view of marketing is welcome to reveal the holes and the inconsistencies in the big picture, and to update R&D on what is strategically at play in the market place.
The two functions should not ‘give each other gifts’ in the sense that the collaboration should not degenerate into mutual complacency. It is not enough to share same dreams or a common vision. It is about having an educated conversation. Nor should one party overexploit its bigger influence on decision makers. Each must simply bring to the decision its specific, informed, and justified point of view.
Geoffroy de Grandmaison
GdeG Consulting
Three rules for a winning relationship between R&D and marketing
Geoffroy de Grandmaison
GdeG Consulting