What's your strategy for balancing risks and rewards when pursuing disruptive R&D ideas?

My crude stepwise process: 1. Market Research 1. Assess Total Addressable Market & Growth 2. Performance features & pricing analysis of current solutions 3. Understand unmet customer or consumer needs 2. Product Design 1. Hypothesis on performance benefits vs existing benchmarks 2. COGS KPI to ensure adequate margin 3. Operational analysis to assess production feasibility & raw material availability 4. Stage Development Plan, starting with rapid prototyping 5. Resourcing Request across stage development 6. Go to market strategy strawman, assessing cannibalization effect on existing sustaining commercial products 7. Build a proposal w/ financial projections & investment 8. Find a sponsor with a P&L!

"If you are not failing often then you are not trying something new'. Companies investing in the research and development ideally thinks about creating disruptive products and technologies. I believe emphasize in solving customer problems and be customer centric without changing customer behaviour. Even if you have a disruptive product or technologies but requires lot changes in its usability or usages. Its adoption rate is very slow. In order to get a better risk reward ratio, solve a burning customer problem which increase there productivity/reduce time/ increase profits/reduce risks it will increase your reward points without changing there behaviour or without extensive training. This will reduce the risks points.

Disruptive R&D is linked to low TRL. And low TRL is synonymous of risk and cash burn. In France, innovative companies can benefit from public fundings. More especially , low TRL R&D developments can be partially funded by public subsidies.

Research is only valuable if it can be reproduced in some forms, helpful to others atleast. Investment vs result or output must be evaluated at start. Investment could be time, resource, capital etc. Output represents investors expectations, final product, final output

From my limited experience the disruptive innovation is achievable with discipline and patience. I have learned the rapid iterations give the team a better opportunity of completing that challenge. Therefore, we planned smaller steps with predictable outcomes. The cross-functional alignment on the vision provides for engagement and productive team work. Along with outcomes it leverages expectations with our stakeholders, partners, and customers. The comprehensive vision is important. It fuels our motivation and creativity. Every case of disruptive innovation is different, because of our unique goals, constraints and temperament. Keeping those in more optimal balance comes from our experience, from our successes and failures.

I worked on a consulting project while providing market research to a client for disruptive technologies in the sustainable energy sector. For disruptive R&D ideas, it is important - to know the landscape of that specific problem - to visualize the impact it brings to the users - to speculate any negative impact on the environment and society - to be aware of potential competitors - to know the blueprint for implementing it - to predict the pitfalls as closely as possible - to know how swiftly you can switch to plan B - to ensure at least a good ROI (better if it is stellar) - to have a team with aligned vision and interest

Key strategies for balancing risks and rewards when pursuing disruptive R&D ideas can include establishing a clear decision-making framework that thoroughly evaluates potential gains against possible losses, thus ensuring that informed choices are made at each critical juncture. Disruptive innovation is closely associated with innovation and change. Fostering an R&D culture that encourages open sharing, learning from failures, and adaptation nurtures self-organization. This, in turn, fuels gains as teams, aided by feedback loops and a scientific approach, collaboratively navigate disruption's changing landscape, harnessing collective wisdom and agility to drive transformative progress.

If you're serious about innovating you should be doing environmental scanning - a term futurists, and innovation futurists like me use. STEEP. Look for emerging that can impact you, your industry or your customers by asking: What emerging Socio-cultural trends can impact us? What emerging Technological/ scientific trends can impact us? What emerging Economic trends can impact us? What emerging Environmental can impact us? What emerging Political/ legal trends can impact us? And let's not forget your customer, not JUST their needs, but their frustrations, aversions and desires.

Beyond Spreadsheet Constraints Innovation is an art, not a spreadsheet. Embrace creativity, take risks, and envision extraordinary outcomes. A spreadsheet mindset limits the potential of innovation—break free for genuine, game-changing results.

It involves navigating challenges while exploring opportunities. Key tactics vary and could include evaluating risks, creating prototypes, getting input, and having an exit plan if necessary. The aim is to chase groundbreaking ideas while reducing possible obstacles.

Furthermore, it's invaluable to engage in discussions about R&D ideas with industry experts who weren't directly involved in their creation. This approach offers a fresh perspective on these concepts. For instance, when dealing with a medical device, it's crucial to involve clinical affairs, medical professionals, and end-users in the conversation. Additionally, remember to thoroughly review the requirements outlined in regulations and standards.

Let's make it simple. Before you do any prototyping whatsoever... Validate you have a problem worth solving (something the market or users want to have solved). Then validate that the market or users are willing to pay for the solution (and no you do not need to build a prototype to do this). If you have validated those two, then and only then should you start to look at validating that you can effectively solve the problem. Do not waste time and money unless you have validated the first two validation stages.

Handling Critique Effectively Innovators often face a dual challenge: either entirely dismissing insights from critics or giving them excessive weight. On one end of the spectrum, complete dismissal of critics could potentially impede growth. Conversely, an overemphasis on criticism might dilute the originality of the innovation, eroding its distinct essence. The key lies in finding a middle ground—acknowledging constructive criticism while remaining aligned with the vision. It involves discerning valuable input without compromising the fundamental essence of the ideas.

There is a famous saying - if you cant compete in the existing market, then change the market and make others irrelevant It is also crucial to develop your products in lowest possible time. The product lifecycle till it sees the market should be minimum as possible, uf you want to rule the market. There can also be focus to develop in advance and let it decorate your portfolio and wait for the correct time to launch. Timing, market acceptance shall be the priority.

I don't agree with this. You do not have to have radical or risky ideas. You only need to have validated ideas. Some may require more technical input, but if there's a willing market, you'll find a way. And really, why waste money and time on a lame innovation? That's a sure-fire way to lose a job, and a truck load of the company's money.

Idea Portfolios: Cultivating a Nursery of Innovations Think of idea portfolios as our nurseries of innovation. Much like tending to a garden, we nurture a variety of seeds—some may sprout quickly, others need time and care. Each idea is a unique seed, potentially blooming into a beautiful, impactful creation. By diversifying our idea portfolio and giving them the right environment, attention, and resources, we increase the likelihood of harvesting a rich crop of groundbreaking innovations.

I completely agree that collaboration or co-creation increases chances for success, elevates potential for innovation and leverages skills across collaborators. I would add that especially when stakes are high, collaboration adds more eyes on evaluating risk and helps spread the risk, too.

There could be also the principal agent problem where one is trying hard and others on different front having interest not aligned. What if organisation creates a roadmap which probably would be having best ideas to cater the protfolio but doesn't have a team to initiate. What if organisations roadmap is actually a biased roadmap where itself they feel wow what a strategy planning we have done but later they found market shift is totally on a different tangent. Hence it is crucial to align what is in house and hownit can be used to facilitate the roadmap.

Getting other people in does not guarantee successful collaboration. Asking someone what they think of your idea, can mean diddly squat if they have no idea of the context or who the customer is. If you want collaboration. You need to know what type of collaboration you want. Is it to help identify a bottleneck or pain point? Is it to help brainstorm? Is it to help validate or strengthen? If you are looking for collaboration help. Best to focus your joint attention on the areas with the biggest uncertainty and biggest implications.

Amplifying Individuality in Collaborative Innovation Recognizing that each idea originates from an individual promotes a culture where unique perspectives are valued in collaborative innovation. Rather than diluting individuality, collaboration amplifies the strengths and creativity of each contributor, resulting in a collective output that surpasses individual efforts. This approach cultivates a sense of ownership, motivates active engagement, and ultimately leads to more comprehensive and impactful innovations.

Celebrating is also a motivation for the next time. Team if valued for their contribution towards organisation vision then they should be rewarded.

First, identify and quantify the potential risks involved. Technological hurdles? Market uncertainties? Market demand? Do you have a problem worth solving? High risks should be met with high potential rewards. Conduct thorough feasibility studies to assess the viability of your ideas. Break down your R&D process into manageable phases, allowing you to reassess and adjust your strategy as needed. It's all about calculated risks, where each step forward is an informed decision. What's your hypothesis?

In disruptive R&D, balancing risks and rewards requires identifying clear objectives, thorough market research, and evaluating potential risks. The allocation of resources should correspond to the project's risk profile. Moreover, an iterative approach with cross-functional teams is required. It involves prototyping, adaptive management, and risk mitigation methods. Continuous review, long-term vision, and open communication while ensuring regulatory compliance and intellectual property protection.

There are some good insights from humans in the article sections on all types of innovation. However the AI prompts framing the conversation don't describe disruptive high-risk high-novelty innovation, they describe sustaining innovation. From my own experience, research targeting high risk disruptive innovation often produces unexpected results. To take advantage of unexpected results requires a team with diverse convergent expertise/experience and a few good collaborative generalists (sometimes called polymaths). A diversely expert team will recognize the potential of unexpected tangential results instead of shelving them.