State of Innovation Report 2021: Hybrid R&D Resourcing

Learning Centre > State of Innovation Report 2021: Hybrid R&D Resourcing

In this report, we will show that by outsourcing R&D activities, companies can realise significant benefits in terms of cost, quality, and time to market.

In this report, we will show that by outsourcing R&D activities, companies can realise significant benefits in terms of cost, quality, and time to market.In this report, we will show that by outsourcing R&D activities, companies can realise significant benefits in terms of cost, quality, and time to market.
Contents

Introduction

Although Research and Development (R&D) is key to most companies' innovation strategies, very few successful companies focus solely on in-house capabilities.

In this report, we will show that by outsourcing R&D activities, companies can realise significant benefits in terms of cost, quality, and time to market.

We will also explore the various roles R&D teams play in the innovation process and how outsourcing can support these roles. We will also look at the existing barriers and how these can be overcome by outsourcing this function.

Most companies rely on internal and external sources for new product development. Still, they also make judicious use of the strategic partnerships to help them fill gaps in their capabilities.

The race to innovate has never been more intense in the global economy. Increasingly, companies are turning to outsource as a way to remain competitive. Outsourcing is not a new phenomenon. For decades, companies have outsourced manufacturing, logistics, and other functions. However, there is a growing trend for companies to outsource R&D activities.

The government's role in promoting innovation has also been a significant factor in R & D outsourcing. As we debatably approach the worst economic crisis since the Great Depression, companies are retrenching and becoming more risk-averse. Companies must focus on their core competencies and outsource non-core functions in this environment.

The benefits of outsourcing R&D are many and varied. However, the most significant advantages are summarised below:

Access to world-class talent and resources: 

When you outsource R&D, you have access to a global pool of talent and resources; this is particularly beneficial for small and medium-sized enterprises (SMEs) that do not have the internal resources to support an in-house R&D team.

Improved quality and speed to market: 

By outsourcing R&D, you can tap into the expertise of experienced professionals who can help you improve the quality of your products and get them to market faster.

Increased flexibility: 

Outsourcing R&D gives you the flexibility to scale up or down your R&D activities according to your business needs; this is particularly beneficial for companies that experience seasonal fluctuations in demand.

Improved focus on core competencies: 

By outsourcing R&D, you can free up your internal resources to focus on your core competencies; this is beneficial for companies that want to focus on their strengths and leave the development of new products and technologies to specialists.

In the past, the main barrier to outsourcing R&D was the fear of losing control over the process. However, with the advent of new technologies, such as cloud computing and collaboration tools, this is becoming less of a concern.

Another barrier to outsourcing R&D is the fear of losing intellectual property (IP). However, organisations can mitigate this by signing non-disclosure agreements (NDAs) and other contractual arrangements.

The benefits of outsourcing R&D far outweigh the risks. Innovation brings the potential for increased market share, improved profitability, and sustainable competitive advantage. In today's global economy, the race to innovate has never been more intense. Increasingly, companies are turning to outsource as a way to remain competitive.

In a survey of more than 1,700 global executives conducted by Innovolo in 2021, we found that the most successful innovators take a balanced approach to innovation using internal and external resources. 

A team of researchers in the innovation industry, whom Innovolo sponsored, conducted the survey.

The objective of the survey was to understand the types and sources of innovation used by companies in the current business environment. In particular, the survey was conducted to compare companies that carry out R&D in-house only versus those that outsource it all versus those that take a hybrid approach.

The survey was conducted using Innovolo's online survey panel. The panel represents the global business community from various industries, geographies, and company sizes. The survey's methodology was designed to ensure a representative sample of participants.



Hybrid R&D Resourcing

Hybrid R&D Resourcing is a powerful method of bringing external partners into an organisation to work alongside internal teams. This hybrid approach generates both velocities and quality improvements through:

The hybrid R&D model is not a new idea. Still, it is gaining traction as businesses look for ways to innovate more rapidly and as organisations face reduced R&D spending.

Hybrid R&D is better than purely in-house or outsourced. (Gagliardi & Miles, 2018) Organisations can use the best hybrid R&D in place of pure R&D spending while increasing overall company returns. Hybrid R&D approaches combine the best aspects of in-house R&D and external capability. In some cases, organisations can make these approaches much more cost-effective than in-house and external capabilities alone.

In recent years, more and more companies have begun to realise the potential of hybrid R&D. While both in-house and hybrid R&D can produce valuable results, the characteristics of each approach are quite different. For example, when in-house R&D iterates and focuses on lowering costs, the results can be incremental. On the other hand, when hybrid R&D focuses on generating new insights rather than simply implementing existing technologies or techniques, the innovation potential is significantly increased.

Hybrid R&D allows a company to take advantage of both the expertise of internal and external experts while developing products and services. Companies can do it effectively at all stages of the product development lifecycle. The key is identifying the most effective hybrid approach to achieving your goals. In some cases, outsourcing enables very inexpensively deploying a solution developed internally. In contrast, it allows bringing expertise into the market at a lower cost in other cases.

Companies are evolving with the times, and so are their ways of R&D. Hybrid R&D involves taking elements of both in-house and outsourced R&D. Companies are looking for hybrid solutions that adapt to their unique needs while also delivering value to their shareholders. While it may sound like a simple concept, it can take time for an organisation to realise the potential of hybrid R&D. When done correctly, hybrid R&D can help companies improve their bottom line and brand perception.

Hybrid R&D can transform an otherwise static organisation into an innovative and forward-thinking growth engine. Hybrid approaches allow organisations to recruit talent from an extraordinary range of backgrounds while simultaneously leveraging the specialised skills of highly technical professionals.


Innovation Benchmark 2021

In a recent study, Innovolo found that more than half (51%) of organisations, irrespective of their turnover, believe that using both internal and external capabilities for R&D and product development increases their chances of success. Yet even as large companies move to outsource some of their R&D and product development, small business leaders remain focused on the advantages of in-house innovation.

When Innovolo surveyed large businesses with over 1,000 employees, the results revealed that around 70% of these companies have started outsourcing some elements of their R&D operations while retaining other aspects in-house.

There is a strong case for suggesting that, of all companies, irrespective of their turnover, about 1 in 2 companies use both internal and external capabilities to conduct research and product development.

As the size of the company increases, the number of companies retaining their R&D activities solely in-house decreases.

We can observe several differences between companies based on whether they keep R&D activities in-house or outsource them.

Using both Internal and Outsourced R&D resources

Companies using internal and outsourced resources to conduct R&D seem to be the most mature and advanced in their approach to innovation. In addition, most of these companies have clearly defined product development roadmaps and measurable targets.  

The place of the innovation function in organisations using a hybrid approach to R&D activities.

There is a growing trend when it comes to the implementation of VOC (voice of the customer) and prototyping. Instead of relying on chance, more and more of these organisations place them centre stage and test prototypes with their customers.

The customer's role in the innovation project in organisations using a hybrid approach to R&D activities.

More of these organisations are successfully steering away from non-viable innovation projects by adopting Agile principles and have been able to implement it, as a matter of course, successfully.

Companies that carry out R&D both internally and outsourced to external agencies typically appreciate that they have a good return on investment on the innovation projects (80%); in addition to having a solid project plan and notifying the team of the project's status at regular intervals, these companies base their decisions on sound business cases and proceed if they have a favourable Go/No Go decision in hand.

The measurement of innovation results in organisations using a hybrid approach to R&D activities.

There is a better-established innovation culture to be seen in companies that engage in R&D activities both internally and outsourced to external agencies: they share best practices, involve their leaders in the key projects, train their people in innovative thinking and innovation tools, and dedicate time to innovation during work hours. [2]

A total of 70% of respondents stated that their organisations have started outsourcing some elements of their R&D operations whilst retaining other aspects in-house. How do you feel about the prospects for innovation given this new trend?

ANDREW VORSTER:

I've been in the game for over 35 years - this isn't a "new trend". Every organisation I have ever worked with over my entire career has relied on 3rd parties for elements of their R&D - often the research and prototyping and the operations - most often via a specialised 3rd party that has a reputation for being a centre of excellence for R&D / innovation.

CHLOE HAMPTON:

IP gets tricky here. Also, when you want to improve things, it is difficult as the third party limits you.

SIMON JELLEY:

The most significant challenge for innovation is the demand for fast payback. Gatekeepers want quick payback, so the projects they fund give results before moving on. Businesses seem to place too little value on innovation work in progress. Given this low valuation of front-end R&D, it tends to be challenging to approve outsourcing it, resulting in short-termism in innovation; this results in the strategy of innovating by acquiring increasingly prevalent start-ups.

VIPIN PILLAI:

Most companies try to keep the core work and outsource the non-value-add work; this does drive focus. However, companies are often late in recognising the core skills and are usually caused by financial reasons to outsource rather than innovation.

WITHHELD CONTRIBUTOR:

Positive, true innovation relies on joining the dots...expert knowledge contributing to new opportunities across categories.

WITHHELD CONTRIBUTOR:

I think this is the right balance to have. When entering new, unchartered waters (such as trying to attract a new customer segment), we may not have a clear picture of the entire market and the existing products. Combining external agencies' broad knowledge and brand knowledge allows us to create a perfectly balanced product.

Would you consider outsourcing any element of the innovation and R&D function to a third party?

SIMON JELLEY:

This is our day job, so probably not much core innovation. We use associate specialists within broader R&D, e.g., for specific specialisms such as optics design or companies to perform market research or user studies.

JILLIAN MOFFAT:

Yes, adopting open innovation means bringing expertise into the business and speeding up innovation and R&D.

WITHHELD CONTRIBUTOR:

Yes - and simply because there are agencies and companies out there who have specific expertise and tools to achieve our objectives; this, in turn, saves a lot of time and assumptions on our end, and accounts for any gaps of knowledge we have in our team.

Solely Outsourcing R&D activities.

In the survey, the companies that only outsource their R&D activities were the least prepared and least advanced in their innovation cultures.

Overall, staff from all roles in these companies felt that they did not invest enough in long-term innovation projects, and the needs of their customers do not usually drive innovations.

Ensuring that a company's innovation projects are viable requires that the company hold a rigorous mission analysis to determine the extent to which the company's core mission supports the project; there may be times when you need to engage in robust conversations that will likely aggravate ownership emotions. However, the survey found that companies outsourcing all their research and development activities are not having that conversation and are not being quick enough to reject bad innovation projects and quickly scale the good ones.

On the other hand, even though these companies are outsourcing their R&D activities, they are the most likely to have a board of directors that oversees them.

Retaining R&D capabilities in-house

Companies that are using only their internal infrastructure for their R&D activities[3] are also less prepared in some respects and thus have a lower innovation culture maturity level.

While they use most multidisciplinary internal teams, these companies do not have a clear plan or roadmap to tie everything together and rarely use business cases to base their innovation projects.

These companies appear to be quite insular, and they rarely have external partnerships or mentors for their projects.

These organisations' employees are least likely to be incentivised to innovate. Given that they are relatively small, they do not have Innovation Boards, and there are no corporate innovation events.

In-house vs Outsource.

Innovation Place in the Organisation

Innovation does not happen by wanton happenstance. (Hui & Rajapathirana, 2018) Innovation is a process (Palazzeschi et al., 2018) that is a conscious effort for business leaders and others committed to seeking out and embracing new ideas and technologies. In some ways, it is a challenging enterprise. You often must put a lot of energy and resources into something new and innovative. In other ways, though, it is not too demanding. Suppose you take the right approach to innovation (often by looking at successful companies that have used structured innovative methods). In that case, the odds of success are high.  

Innovation plays a central role in organisations, with 75% of managers believing that they invest sufficiently in long-term horizon projects. These organisations typically have well-defined and ambitious innovation targets; they focus their innovation activities on the entire business model instead of just new products.

Whilst the role of innovation is changing, many businesses still see innovation as a top-down process that business leaders drive. As a result, the overall approach to innovation is often very structured and formulaic, with several stages of the innovation process laid out in advance. For example, a formalised innovation committee may report to the board. This committee will work with experts, including in-house R&D experts and external consultants.

Innovation is often seen as a high-risk activity (Jalonen, 2011). To mitigate this risk, many organisations increasingly have an innovation review board. This board is usually drawn from outside the organisation and assesses new ideas. The board's job is not to judge the concept itself but to judge the broader business case for the idea.  

Customer's Role in the Innovation Project

It is common knowledge that actively exploring the customer needs as a starting point to innovation is key to success in the product development process (Cooper, 1996). Our research found that 76% of companies studied do indeed actively consider customer needs in their innovation projects. The main reason for this recognises that the customer is king and that customer demand will be the primary driver of future success. In the face of increasing competition, it is more vital than ever for organisations to create innovative products that are attractive to customers. Doing so increases the chances of success and helps to fend off competition. (Purcell, 2019)

Alarmingly, however, it was found that 28% of companies do not actively discuss their new ideas with their customers. While this is an understandable and sometimes necessary step to protect a company's intellectual property, it is essential to remember that innovation is often exploratory. (Ferrari et al., 2009); this is particularly true in the early stages of product development when the company determines the product's broad parameters and how it will be used.

By putting the customer first and actively involving them in the innovation process, companies are more likely to be able to take advantage of a broader range of ideas. They are also expected to gain valuable insight into how the customer will engage with the product. (Jouyandeh, 2019)

The Innovation Process

The existence of a formal process for innovation is a vital part of creating any effective innovation strategy (Rivier University, 2017). Still, it is an area ripe for improvement for many companies globally.

However, data gathered from the study of over 430 companies revealed that the innovation process often entails multidisciplinary teams, allowing for an environment where short-term lead times and fast learning are at the forefront.

Having multidisciplinary teams in the innovation process is a fairly common practice (ECHOS | School of Design Thinking, 2018). Many companies report that they have these. The teams are increasingly made up of both internal and external experts. (Northwestern University | School of Education and Social Policy, 2020)

Approximately 25% of companies use a waterfall approach to their innovation initiatives, and 30% of the companies studied did not have a process in place that enabled them to quickly stop projects that show no viability and scale the viable ones; this could be seen as an area for improvement in many companies. The waterfall approach has been criticised for being too linear, rigid, and inflexible and ignoring the need for feedback and iterative improvement. However, it is an approach that is still commonly used and is particularly useful in specific industries, such as the medical device industry.

Innovation Results Measurement

The survey conducted by Innovolo has revealed that around 3 in 4 organisations report that they have what they consider to be a good outcome on their innovation investments and efforts; this contrasts with the common knowledge that many innovation initiatives fail. (Carmen, 2011)

But while they report good financial returns in terms of their innovation investments, clear and well-established KPIs to measure innovation are not well established within all companies. For example, only about 1 out of 3 Fortune 1000 companies have formal innovation metrics. (Kaplan, 2013); this points to a need for greater focus on KPI development and measurement, particularly the need to develop innovative KPIs that provide valuable and practical information.

Innovolo believes that companies should have KPIs for innovation. [4]. While innovative companies can be successful without KPIs for innovation, the existence of KPIs provides a framework for identifying and measuring innovation, driving improvement and growth in the company.

The consequences of not measuring innovation are dire. Companies that do not have explicit, well-defined KPIs for innovation are missing a vital tool for identifying and measuring their innovation efforts. Still, they are also missing an opportunity to drive innovation and improve their bottom line. "What gets measured get managed" (Drucker, 1954).

One in four companies does not create financial business cases when initiating innovation projects.

Because of this, around 25% of companies that are likely to be undertaking new product development projects or ventures are likely to be doing so with very little data to support their decisions or with no solid evidence to back up their choices.

Innovation Culture in the Organisation

Companies globally have a culture of innovation at varying levels of maturity. What is less apparent is how companies can foster innovation. Innovation is a process that involves people and ideas.

Innovation is a process that requires people to break out of their traditional ways of thinking and work outside their comfort zone. (Niinimäki, 2017)

Employees in the most mature organisations, present within 78% of companies surveyed, share best innovation practices within the organisation.

Although most companies surveyed have structures in place to support innovation, it often does not fall under the purview of a single individual and is usually left up to chance.

The survey revealed that the existence of Innovation Boards and organised innovation events are uncommon in most companies worldwide. As a result, most respondents had not been exposed to the many opportunities that come from the structured approach to innovation backed by an accountability framework.

The role of an Innovation Board is to provide a formalised structure that supports the organisation's innovation agenda and culture. Innovation Boards are practical tools for building a culture of innovation, reporting against innovation objectives, and measuring outcomes.

Research suggests that the process of innovation is becoming more complex and is not driven by a few individuals in isolation. Instead, innovation is a team effort and requires a cross-functional group of people held accountable for the outcome.

The survey results suggest that an Innovation Board can be a valuable tool for creating an environment where innovation is accepted as a core value and process, as shown in the Innovation Value Pyramid.

Organising innovation events such as hackathons and innovation challenges can be cost-effective in encouraging innovation and developing new ideas. Still, most organisations surveyed do not appear to be fully adopted.

Allotting specific time for innovation initiatives during the working day is well-publicised, with organisations such as Apple, Google, and Dell have made this point.

Google, for example, has a dedicated '20% time' scheme where employees are encouraged to spend at least 20% of their working day on projects of their choosing; this has led to innovations such as Gmail, Google News, and AdSense, and is intended to help keep the organisation nimble and innovative. (Murphy Jr, 2020)

Many seemingly innovative organisations have been reluctant to allocate time for innovation initiatives within the working day.

Innovation initiatives are typically considered experimental (The UN Refugee Agency | Innovation Service, 2017) and, therefore, risky and are not generally seen to be worth the time of a busy employee.

External Resources and Mentorship in Innovation Process

A majority (~80%) of the companies surveyed currently have a form of an external strategic partnership focused on innovation.

These partnerships can either be financial or non-financial and typically provide money, technology, or expertise to solve a specific problem.

The most common type of partnership is with a university, and the second most common partner is another company.

In about 9 in 10 companies, innovation projects are owned by a mentor — in most cases, they have both internal and external mentors who help them manage their portfolio.

Innovation projects that feature a mentor have a higher success rate than those that do not.

Barriers to Product Development and Innovation

In a recent survey carried out by Innovolo of ~1700 organisations in the UK, we revealed that the top 3 barriers to innovation and product development are a lack of resources (30%), too many meetings (28%), and poor communication (23%). Furthermore, 62% of all respondents mentioned at least one of the three problems in their top list.

Staff related constraints and poor communication are among the top frustrations for employees in R&D-related roles. People spontaneously mention they want to change.

Top Barriers in Product Development - Overall

How can these barriers be addressed by organisations looking to become more innovative?

ANDREW VORSTER:

Most of these obstacles can be overcome by shifting mindsets across the organisation's entire spectrum. Innovation is often perceived as "something done by a department, whereas opportunities to innovate exist within every aspect of an organisation. The senior leadership need to know, understand, and most importantly, articulate the "why" innovation is vital to the survival of an organisation. AND they MUST believe in the way (not just pay lip service to it) and act accordingly by enabling innovation to take place by cultivating the right culture, underpinned, and supported by appropriate governance and process.

CHLOE HAMPTON:

Make it your culture...continuous improvement, and it is everyone's responsibility. Create structures to hoover up everyone's daily insights of what could be better and then plan to implement it. Implement solutions quickly, and people get excited that they are heard, and their ideas are becoming real...then go bigger. Seek funding to aid with more significant innovative projects to ensure you work towards the goal without money or resource being the issue.

JILLIAN MOFFAT:

You must have the right culture and nurture innovation so that it becomes part of your DNA.

Role in the Organisation

While it is true that all organisations are facing similar issues and that different roles in the organisation face other problems, it is also true that different roles within the organisation feel that there are some differences in how they can tackle these issues.

Poor communication is the main barrier for Project Engineers, and it is closely correlated with inconsistent and poor management. As a result, project engineers are likely to have poor morale and motivation than their peers. They are also expected to experience a much higher stress level, leading to a significant reduction in their productivity and potential for innovation.

Product Development Managers are most strongly confronted with the fear of failure. They are often concerned about receiving negative feedback or criticism. These outcomes are most likely to be related to inconsistent management practices.

For R&D managers, people's skills are a critical issue - they are often unhappy about the poor training and development provided to their staff and their steep learning curves; this leads to a lack of creativity and poor decision making in the R&D department.  

Surprisingly, for Directors, the lack of a good strategic direction is the main pain point in the product development function. However, directors also find the lack of capabilities a significant issue. Could this be an overall lack of support for product development from the top leadership?

Industry Sector

When it comes to manufacturers of products other than computers, they tend to resent the fear of failure and face the lack of organisation and planning more than any other sector.

In addition to lack of staff and poor communication, respondents in the computer and electronics manufacturing industry are most affected by steep learning curves. However, some of these learning curves are associated with using poor documentation.

Manufacturing is an industry that is constantly evolving, and many companies are having a hard time adjusting to the changing demands of consumers.

Those in the service sector are subject to frustration and discontent because they are not held back by consistent management, leading to a lack of strategic direction, poor morale, and low motivation.

Number of Employees

The survey revealed that a lack of staff in a relevant R&D role is one of the most common barriers to innovation in medium-sized organisations [5]. It also noted that this was followed by fears of failure, particularly from a C-suite / director level.

This finding is fascinating when you consider that failure is not such a bad thing with the right kind of approach: it can be pretty positive. It can help you to innovate more effectively. (Edmondson, 2011); this raises the question: are larger companies more risk-averse than smaller ones? Appropriate risk management is a critical factor in the product development function of an organisation. A risk-averse attitude will lead to a lack of innovation, ultimately leading to a lack of market share.

Larger companies[6] struggle with poor communication (40%) in the R&D function. Communication is a crucial element of innovation (Beckett & Hyland, 2011). Therefore, it is not surprising that this is a critical barrier to innovation for larger companies. Bureaucracy is a significant issue in larger organisations, which can hinder innovation. (Ni, 2016)

Reservations about Outsourcing Product Development activities (overall)

In a recent survey carried out by Innovolo of ~1700 organisations in the UK in 2021, it was revealed that a high percentage (47%) have no reservations about outsourcing their product development activities either in part or in whole.

Top reservations about outsourcing theproduct development function

Of those companies that had reservations (46%) about outsourcing, it was revealed that the most significant objections were around confidentiality issues.

Confidentiality is a big issue for any organisation carrying out product development.  

Companies using open innovation platforms are concerned about the confidentiality of their information to the intermediary and the rest of the world. Even if the company's name is left relatively anonymous, it may be easy for competitors to guess who is behind the problem. Many companies are not comfortable putting out a problem online and broadcasting it to a priori unknown solvers. Online Non-Disclosure Agreements are not satisfactory as anybody can sign them without real engagement or verification.

Intellectual property management is another sensitive aspect of product development programmes.

Who owns the IP of solutions provided through an open innovation solver via an intermediary's Internet platform? The client company, also called seeker, wants to own the IP to use the solution without restriction and gain competitive advantages. However, if the solver wants to get paid, they typically must give up their IP rights.

Top Reservations about Outsourcing R&D and Product Development to Third Parties

The second-largest fear of outsourcing product development was revealed to be around costs. It is essential to understand what fees are being included in comparing outsourcing versus in-house. It is important to remember that outsourcing can often help save money by reducing the number of people on the payroll; this can, in turn, reduce the costs of the organisation in addition to the extra HR administration.

The following reservation is quality control. Organisations need much assurance that the quality of the deliverables is up to standard and regulatory requirements. Outsourcing elements of the product development process can pose the risk that the quality of the delivered product is not up to standard; product quality failure can be costly and highly damaging to the organisation's reputation.

The fourth reservation is whether the outsourced contractor has the necessary qualifications and expertise to carry out the task effectively. Although the outsourced product development contractor may have a strong track record, an organisation needs to be able to trust and verify that they have the required skills and the necessary qualifications for the job.  

Other reservations include a potential loss of ownership, which comes back to the IP issue.

Suppose an organisation is outsourcing the product development process. In that case, it is crucial to understand what their IP rights are in the process. For example, do they own the IP, or do they have a license to use it? If the IP is not their own, they need to ensure that the IP is adequately protected and licensed appropriately.  

The final reservation the survey revealed was around communication. With the constant flow of information and more stakeholders involved in the project, it can be easy to lose sight of the bigger picture.

It can be easy to get bogged down in the project's minutiae and lose sight of the final deliverable.

References


Acknowledgements

With thanks to the following for their valuable insights and contribution:

As well as Vipin Pillai, Jillian Moffat, and many others.

About Innovolo

Innovolo is the world's leading provider of Innovation-as-a-Service, helping accelerate product development projects for R&D teams globally through thorough, proven product development and strategic goal alignment process called the Innovolation Framework.

Innovolo works with organisations across a broad range of industries, including but not limited to medical products, industrial manufacturing, automotive, aerospace and defence.

Our team comprises highly experienced product development professionals with expertise in each stage of the product development process. In addition, our team is supported by a network of highly skilled researchers, chemists, and engineers, who enable us to deliver high quality and essential projects quickly.

We work with clients across the globe, including in the United States, the United Kingdom, Canada, Australia, New Zealand, and many European countries.

To find out more about Innovolo, please visit the website at www.innovolo.co.uk.


[1] The share of companies running in-house only decreases as the company size grows, going from 42% for smaller companies (1-50 employees) to only 10% for the most prominent companies (1000+ employees).

[2] An average of 78% of respondents agreed with the following statements, indicating a maturing culture of innovation within companies that carry out a hybrid approach to innovation with in-house and outsourced activities: 1) We actively share innovation best practices within our organisation, 2) The responsibility for innovation is well embedded in our organisation, 3) Our leaders are personally involved in key innovation projects, 4) Our people are well trained in innovative thinking and innovation tooling, 5) Our communication platforms enable and stimulate innovation, 6) Employees are incentivised and feel empowered to support and initiate innovation, 7) We recruit people with a diverse background to become more innovative, and 8) People in our organisation are given explicit time to brainstorm on innovation.

[3] Companies carrying R&D activities using their internal resources only have a lower mean turnover (39% <£5mil) and fewer employees (35% 1-5 employees)

[4] A list of KPIs for innovation and product development for consideration will be found in Appendix A.

[5] Organisations with 51-250 employees

[6] Organisations with 251-1000 employees.

No items found.

Introduction

Although Research and Development (R&D) is key to most companies' innovation strategies, very few successful companies focus solely on in-house capabilities.

In this report, we will show that by outsourcing R&D activities, companies can realise significant benefits in terms of cost, quality, and time to market.

We will also explore the various roles R&D teams play in the innovation process and how outsourcing can support these roles. We will also look at the existing barriers and how these can be overcome by outsourcing this function.

Most companies rely on internal and external sources for new product development. Still, they also make judicious use of the strategic partnerships to help them fill gaps in their capabilities.

The race to innovate has never been more intense in the global economy. Increasingly, companies are turning to outsource as a way to remain competitive. Outsourcing is not a new phenomenon. For decades, companies have outsourced manufacturing, logistics, and other functions. However, there is a growing trend for companies to outsource R&D activities.

The government's role in promoting innovation has also been a significant factor in R & D outsourcing. As we debatably approach the worst economic crisis since the Great Depression, companies are retrenching and becoming more risk-averse. Companies must focus on their core competencies and outsource non-core functions in this environment.

The benefits of outsourcing R&D are many and varied. However, the most significant advantages are summarised below:

Access to world-class talent and resources: 

When you outsource R&D, you have access to a global pool of talent and resources; this is particularly beneficial for small and medium-sized enterprises (SMEs) that do not have the internal resources to support an in-house R&D team.

Improved quality and speed to market: 

By outsourcing R&D, you can tap into the expertise of experienced professionals who can help you improve the quality of your products and get them to market faster.

Increased flexibility: 

Outsourcing R&D gives you the flexibility to scale up or down your R&D activities according to your business needs; this is particularly beneficial for companies that experience seasonal fluctuations in demand.

Improved focus on core competencies: 

By outsourcing R&D, you can free up your internal resources to focus on your core competencies; this is beneficial for companies that want to focus on their strengths and leave the development of new products and technologies to specialists.

In the past, the main barrier to outsourcing R&D was the fear of losing control over the process. However, with the advent of new technologies, such as cloud computing and collaboration tools, this is becoming less of a concern.

Another barrier to outsourcing R&D is the fear of losing intellectual property (IP). However, organisations can mitigate this by signing non-disclosure agreements (NDAs) and other contractual arrangements.

The benefits of outsourcing R&D far outweigh the risks. Innovation brings the potential for increased market share, improved profitability, and sustainable competitive advantage. In today's global economy, the race to innovate has never been more intense. Increasingly, companies are turning to outsource as a way to remain competitive.

In a survey of more than 1,700 global executives conducted by Innovolo in 2021, we found that the most successful innovators take a balanced approach to innovation using internal and external resources. 

A team of researchers in the innovation industry, whom Innovolo sponsored, conducted the survey.

The objective of the survey was to understand the types and sources of innovation used by companies in the current business environment. In particular, the survey was conducted to compare companies that carry out R&D in-house only versus those that outsource it all versus those that take a hybrid approach.

The survey was conducted using Innovolo's online survey panel. The panel represents the global business community from various industries, geographies, and company sizes. The survey's methodology was designed to ensure a representative sample of participants.



Hybrid R&D Resourcing

Hybrid R&D Resourcing is a powerful method of bringing external partners into an organisation to work alongside internal teams. This hybrid approach generates both velocities and quality improvements through:

  • Greater creativity,
  • Exploration of niche or emerging market technology, and
  • Access to more significant resources than the organisation could include internally.

The hybrid R&D model is not a new idea. Still, it is gaining traction as businesses look for ways to innovate more rapidly and as organisations face reduced R&D spending.

Hybrid R&D is better than purely in-house or outsourced. (Gagliardi & Miles, 2018) Organisations can use the best hybrid R&D in place of pure R&D spending while increasing overall company returns. Hybrid R&D approaches combine the best aspects of in-house R&D and external capability. In some cases, organisations can make these approaches much more cost-effective than in-house and external capabilities alone.

In recent years, more and more companies have begun to realise the potential of hybrid R&D. While both in-house and hybrid R&D can produce valuable results, the characteristics of each approach are quite different. For example, when in-house R&D iterates and focuses on lowering costs, the results can be incremental. On the other hand, when hybrid R&D focuses on generating new insights rather than simply implementing existing technologies or techniques, the innovation potential is significantly increased.

Hybrid R&D allows a company to take advantage of both the expertise of internal and external experts while developing products and services. Companies can do it effectively at all stages of the product development lifecycle. The key is identifying the most effective hybrid approach to achieving your goals. In some cases, outsourcing enables very inexpensively deploying a solution developed internally. In contrast, it allows bringing expertise into the market at a lower cost in other cases.

Companies are evolving with the times, and so are their ways of R&D. Hybrid R&D involves taking elements of both in-house and outsourced R&D. Companies are looking for hybrid solutions that adapt to their unique needs while also delivering value to their shareholders. While it may sound like a simple concept, it can take time for an organisation to realise the potential of hybrid R&D. When done correctly, hybrid R&D can help companies improve their bottom line and brand perception.

Hybrid R&D can transform an otherwise static organisation into an innovative and forward-thinking growth engine. Hybrid approaches allow organisations to recruit talent from an extraordinary range of backgrounds while simultaneously leveraging the specialised skills of highly technical professionals.


Innovation Benchmark 2021

In a recent study, Innovolo found that more than half (51%) of organisations, irrespective of their turnover, believe that using both internal and external capabilities for R&D and product development increases their chances of success. Yet even as large companies move to outsource some of their R&D and product development, small business leaders remain focused on the advantages of in-house innovation.

When Innovolo surveyed large businesses with over 1,000 employees, the results revealed that around 70% of these companies have started outsourcing some elements of their R&D operations while retaining other aspects in-house.

There is a strong case for suggesting that, of all companies, irrespective of their turnover, about 1 in 2 companies use both internal and external capabilities to conduct research and product development.

As the size of the company increases, the number of companies retaining their R&D activities solely in-house decreases.

We can observe several differences between companies based on whether they keep R&D activities in-house or outsource them.

Using both Internal and Outsourced R&D resources

Companies using internal and outsourced resources to conduct R&D seem to be the most mature and advanced in their approach to innovation. In addition, most of these companies have clearly defined product development roadmaps and measurable targets.  

The place of the innovation function in organisations using a hybrid approach to R&D activities.

There is a growing trend when it comes to the implementation of VOC (voice of the customer) and prototyping. Instead of relying on chance, more and more of these organisations place them centre stage and test prototypes with their customers.

The customer's role in the innovation project in organisations using a hybrid approach to R&D activities.

More of these organisations are successfully steering away from non-viable innovation projects by adopting Agile principles and have been able to implement it, as a matter of course, successfully.

Companies that carry out R&D both internally and outsourced to external agencies typically appreciate that they have a good return on investment on the innovation projects (80%); in addition to having a solid project plan and notifying the team of the project's status at regular intervals, these companies base their decisions on sound business cases and proceed if they have a favourable Go/No Go decision in hand.

The measurement of innovation results in organisations using a hybrid approach to R&D activities.

There is a better-established innovation culture to be seen in companies that engage in R&D activities both internally and outsourced to external agencies: they share best practices, involve their leaders in the key projects, train their people in innovative thinking and innovation tools, and dedicate time to innovation during work hours. [2]

A total of 70% of respondents stated that their organisations have started outsourcing some elements of their R&D operations whilst retaining other aspects in-house. How do you feel about the prospects for innovation given this new trend?

ANDREW VORSTER:

I've been in the game for over 35 years - this isn't a "new trend". Every organisation I have ever worked with over my entire career has relied on 3rd parties for elements of their R&D - often the research and prototyping and the operations - most often via a specialised 3rd party that has a reputation for being a centre of excellence for R&D / innovation.

CHLOE HAMPTON:

IP gets tricky here. Also, when you want to improve things, it is difficult as the third party limits you.

SIMON JELLEY:

The most significant challenge for innovation is the demand for fast payback. Gatekeepers want quick payback, so the projects they fund give results before moving on. Businesses seem to place too little value on innovation work in progress. Given this low valuation of front-end R&D, it tends to be challenging to approve outsourcing it, resulting in short-termism in innovation; this results in the strategy of innovating by acquiring increasingly prevalent start-ups.

VIPIN PILLAI:

Most companies try to keep the core work and outsource the non-value-add work; this does drive focus. However, companies are often late in recognising the core skills and are usually caused by financial reasons to outsource rather than innovation.

WITHHELD CONTRIBUTOR:

Positive, true innovation relies on joining the dots...expert knowledge contributing to new opportunities across categories.

WITHHELD CONTRIBUTOR:

I think this is the right balance to have. When entering new, unchartered waters (such as trying to attract a new customer segment), we may not have a clear picture of the entire market and the existing products. Combining external agencies' broad knowledge and brand knowledge allows us to create a perfectly balanced product.

Would you consider outsourcing any element of the innovation and R&D function to a third party?

SIMON JELLEY:

This is our day job, so probably not much core innovation. We use associate specialists within broader R&D, e.g., for specific specialisms such as optics design or companies to perform market research or user studies.

JILLIAN MOFFAT:

Yes, adopting open innovation means bringing expertise into the business and speeding up innovation and R&D.

WITHHELD CONTRIBUTOR:

Yes - and simply because there are agencies and companies out there who have specific expertise and tools to achieve our objectives; this, in turn, saves a lot of time and assumptions on our end, and accounts for any gaps of knowledge we have in our team.

Solely Outsourcing R&D activities.

In the survey, the companies that only outsource their R&D activities were the least prepared and least advanced in their innovation cultures.

Overall, staff from all roles in these companies felt that they did not invest enough in long-term innovation projects, and the needs of their customers do not usually drive innovations.

Ensuring that a company's innovation projects are viable requires that the company hold a rigorous mission analysis to determine the extent to which the company's core mission supports the project; there may be times when you need to engage in robust conversations that will likely aggravate ownership emotions. However, the survey found that companies outsourcing all their research and development activities are not having that conversation and are not being quick enough to reject bad innovation projects and quickly scale the good ones.

On the other hand, even though these companies are outsourcing their R&D activities, they are the most likely to have a board of directors that oversees them.

Retaining R&D capabilities in-house

Companies that are using only their internal infrastructure for their R&D activities[3] are also less prepared in some respects and thus have a lower innovation culture maturity level.

While they use most multidisciplinary internal teams, these companies do not have a clear plan or roadmap to tie everything together and rarely use business cases to base their innovation projects.

These companies appear to be quite insular, and they rarely have external partnerships or mentors for their projects.

These organisations' employees are least likely to be incentivised to innovate. Given that they are relatively small, they do not have Innovation Boards, and there are no corporate innovation events.

In-house vs Outsource.

Innovation Place in the Organisation

Innovation does not happen by wanton happenstance. (Hui & Rajapathirana, 2018) Innovation is a process (Palazzeschi et al., 2018) that is a conscious effort for business leaders and others committed to seeking out and embracing new ideas and technologies. In some ways, it is a challenging enterprise. You often must put a lot of energy and resources into something new and innovative. In other ways, though, it is not too demanding. Suppose you take the right approach to innovation (often by looking at successful companies that have used structured innovative methods). In that case, the odds of success are high.  

Innovation plays a central role in organisations, with 75% of managers believing that they invest sufficiently in long-term horizon projects. These organisations typically have well-defined and ambitious innovation targets; they focus their innovation activities on the entire business model instead of just new products.

Whilst the role of innovation is changing, many businesses still see innovation as a top-down process that business leaders drive. As a result, the overall approach to innovation is often very structured and formulaic, with several stages of the innovation process laid out in advance. For example, a formalised innovation committee may report to the board. This committee will work with experts, including in-house R&D experts and external consultants.

Innovation is often seen as a high-risk activity (Jalonen, 2011). To mitigate this risk, many organisations increasingly have an innovation review board. This board is usually drawn from outside the organisation and assesses new ideas. The board's job is not to judge the concept itself but to judge the broader business case for the idea.  

Customer's Role in the Innovation Project

It is common knowledge that actively exploring the customer needs as a starting point to innovation is key to success in the product development process (Cooper, 1996). Our research found that 76% of companies studied do indeed actively consider customer needs in their innovation projects. The main reason for this recognises that the customer is king and that customer demand will be the primary driver of future success. In the face of increasing competition, it is more vital than ever for organisations to create innovative products that are attractive to customers. Doing so increases the chances of success and helps to fend off competition. (Purcell, 2019)

Alarmingly, however, it was found that 28% of companies do not actively discuss their new ideas with their customers. While this is an understandable and sometimes necessary step to protect a company's intellectual property, it is essential to remember that innovation is often exploratory. (Ferrari et al., 2009); this is particularly true in the early stages of product development when the company determines the product's broad parameters and how it will be used.

By putting the customer first and actively involving them in the innovation process, companies are more likely to be able to take advantage of a broader range of ideas. They are also expected to gain valuable insight into how the customer will engage with the product. (Jouyandeh, 2019)

The Innovation Process

The existence of a formal process for innovation is a vital part of creating any effective innovation strategy (Rivier University, 2017). Still, it is an area ripe for improvement for many companies globally.

However, data gathered from the study of over 430 companies revealed that the innovation process often entails multidisciplinary teams, allowing for an environment where short-term lead times and fast learning are at the forefront.

Having multidisciplinary teams in the innovation process is a fairly common practice (ECHOS | School of Design Thinking, 2018). Many companies report that they have these. The teams are increasingly made up of both internal and external experts. (Northwestern University | School of Education and Social Policy, 2020)

Approximately 25% of companies use a waterfall approach to their innovation initiatives, and 30% of the companies studied did not have a process in place that enabled them to quickly stop projects that show no viability and scale the viable ones; this could be seen as an area for improvement in many companies. The waterfall approach has been criticised for being too linear, rigid, and inflexible and ignoring the need for feedback and iterative improvement. However, it is an approach that is still commonly used and is particularly useful in specific industries, such as the medical device industry.

Innovation Results Measurement

The survey conducted by Innovolo has revealed that around 3 in 4 organisations report that they have what they consider to be a good outcome on their innovation investments and efforts; this contrasts with the common knowledge that many innovation initiatives fail. (Carmen, 2011)

But while they report good financial returns in terms of their innovation investments, clear and well-established KPIs to measure innovation are not well established within all companies. For example, only about 1 out of 3 Fortune 1000 companies have formal innovation metrics. (Kaplan, 2013); this points to a need for greater focus on KPI development and measurement, particularly the need to develop innovative KPIs that provide valuable and practical information.

Innovolo believes that companies should have KPIs for innovation. [4]. While innovative companies can be successful without KPIs for innovation, the existence of KPIs provides a framework for identifying and measuring innovation, driving improvement and growth in the company.

The consequences of not measuring innovation are dire. Companies that do not have explicit, well-defined KPIs for innovation are missing a vital tool for identifying and measuring their innovation efforts. Still, they are also missing an opportunity to drive innovation and improve their bottom line. "What gets measured get managed" (Drucker, 1954).

One in four companies does not create financial business cases when initiating innovation projects.

Because of this, around 25% of companies that are likely to be undertaking new product development projects or ventures are likely to be doing so with very little data to support their decisions or with no solid evidence to back up their choices.

Innovation Culture in the Organisation

Companies globally have a culture of innovation at varying levels of maturity. What is less apparent is how companies can foster innovation. Innovation is a process that involves people and ideas.

Innovation is a process that requires people to break out of their traditional ways of thinking and work outside their comfort zone. (Niinimäki, 2017)

Employees in the most mature organisations, present within 78% of companies surveyed, share best innovation practices within the organisation.

Although most companies surveyed have structures in place to support innovation, it often does not fall under the purview of a single individual and is usually left up to chance.

The survey revealed that the existence of Innovation Boards and organised innovation events are uncommon in most companies worldwide. As a result, most respondents had not been exposed to the many opportunities that come from the structured approach to innovation backed by an accountability framework.

The role of an Innovation Board is to provide a formalised structure that supports the organisation's innovation agenda and culture. Innovation Boards are practical tools for building a culture of innovation, reporting against innovation objectives, and measuring outcomes.

Research suggests that the process of innovation is becoming more complex and is not driven by a few individuals in isolation. Instead, innovation is a team effort and requires a cross-functional group of people held accountable for the outcome.

The survey results suggest that an Innovation Board can be a valuable tool for creating an environment where innovation is accepted as a core value and process, as shown in the Innovation Value Pyramid.

Organising innovation events such as hackathons and innovation challenges can be cost-effective in encouraging innovation and developing new ideas. Still, most organisations surveyed do not appear to be fully adopted.

Allotting specific time for innovation initiatives during the working day is well-publicised, with organisations such as Apple, Google, and Dell have made this point.

Google, for example, has a dedicated '20% time' scheme where employees are encouraged to spend at least 20% of their working day on projects of their choosing; this has led to innovations such as Gmail, Google News, and AdSense, and is intended to help keep the organisation nimble and innovative. (Murphy Jr, 2020)

Many seemingly innovative organisations have been reluctant to allocate time for innovation initiatives within the working day.

Innovation initiatives are typically considered experimental (The UN Refugee Agency | Innovation Service, 2017) and, therefore, risky and are not generally seen to be worth the time of a busy employee.

External Resources and Mentorship in Innovation Process

A majority (~80%) of the companies surveyed currently have a form of an external strategic partnership focused on innovation.

These partnerships can either be financial or non-financial and typically provide money, technology, or expertise to solve a specific problem.

The most common type of partnership is with a university, and the second most common partner is another company.

In about 9 in 10 companies, innovation projects are owned by a mentor — in most cases, they have both internal and external mentors who help them manage their portfolio.

Innovation projects that feature a mentor have a higher success rate than those that do not.

Barriers to Product Development and Innovation

In a recent survey carried out by Innovolo of ~1700 organisations in the UK, we revealed that the top 3 barriers to innovation and product development are a lack of resources (30%), too many meetings (28%), and poor communication (23%). Furthermore, 62% of all respondents mentioned at least one of the three problems in their top list.

Staff related constraints and poor communication are among the top frustrations for employees in R&D-related roles. People spontaneously mention they want to change.

Top Barriers in Product Development - Overall

How can these barriers be addressed by organisations looking to become more innovative?

ANDREW VORSTER:

Most of these obstacles can be overcome by shifting mindsets across the organisation's entire spectrum. Innovation is often perceived as "something done by a department, whereas opportunities to innovate exist within every aspect of an organisation. The senior leadership need to know, understand, and most importantly, articulate the "why" innovation is vital to the survival of an organisation. AND they MUST believe in the way (not just pay lip service to it) and act accordingly by enabling innovation to take place by cultivating the right culture, underpinned, and supported by appropriate governance and process.

CHLOE HAMPTON:

Make it your culture...continuous improvement, and it is everyone's responsibility. Create structures to hoover up everyone's daily insights of what could be better and then plan to implement it. Implement solutions quickly, and people get excited that they are heard, and their ideas are becoming real...then go bigger. Seek funding to aid with more significant innovative projects to ensure you work towards the goal without money or resource being the issue.

JILLIAN MOFFAT:

You must have the right culture and nurture innovation so that it becomes part of your DNA.

Role in the Organisation

While it is true that all organisations are facing similar issues and that different roles in the organisation face other problems, it is also true that different roles within the organisation feel that there are some differences in how they can tackle these issues.

Poor communication is the main barrier for Project Engineers, and it is closely correlated with inconsistent and poor management. As a result, project engineers are likely to have poor morale and motivation than their peers. They are also expected to experience a much higher stress level, leading to a significant reduction in their productivity and potential for innovation.

Product Development Managers are most strongly confronted with the fear of failure. They are often concerned about receiving negative feedback or criticism. These outcomes are most likely to be related to inconsistent management practices.

For R&D managers, people's skills are a critical issue - they are often unhappy about the poor training and development provided to their staff and their steep learning curves; this leads to a lack of creativity and poor decision making in the R&D department.  

Surprisingly, for Directors, the lack of a good strategic direction is the main pain point in the product development function. However, directors also find the lack of capabilities a significant issue. Could this be an overall lack of support for product development from the top leadership?

Industry Sector

When it comes to manufacturers of products other than computers, they tend to resent the fear of failure and face the lack of organisation and planning more than any other sector.

In addition to lack of staff and poor communication, respondents in the computer and electronics manufacturing industry are most affected by steep learning curves. However, some of these learning curves are associated with using poor documentation.

Manufacturing is an industry that is constantly evolving, and many companies are having a hard time adjusting to the changing demands of consumers.

Those in the service sector are subject to frustration and discontent because they are not held back by consistent management, leading to a lack of strategic direction, poor morale, and low motivation.

Number of Employees

The survey revealed that a lack of staff in a relevant R&D role is one of the most common barriers to innovation in medium-sized organisations [5]. It also noted that this was followed by fears of failure, particularly from a C-suite / director level.

This finding is fascinating when you consider that failure is not such a bad thing with the right kind of approach: it can be pretty positive. It can help you to innovate more effectively. (Edmondson, 2011); this raises the question: are larger companies more risk-averse than smaller ones? Appropriate risk management is a critical factor in the product development function of an organisation. A risk-averse attitude will lead to a lack of innovation, ultimately leading to a lack of market share.

Larger companies[6] struggle with poor communication (40%) in the R&D function. Communication is a crucial element of innovation (Beckett & Hyland, 2011). Therefore, it is not surprising that this is a critical barrier to innovation for larger companies. Bureaucracy is a significant issue in larger organisations, which can hinder innovation. (Ni, 2016)

Reservations about Outsourcing Product Development activities (overall)

In a recent survey carried out by Innovolo of ~1700 organisations in the UK in 2021, it was revealed that a high percentage (47%) have no reservations about outsourcing their product development activities either in part or in whole.

Top reservations about outsourcing theproduct development function

Of those companies that had reservations (46%) about outsourcing, it was revealed that the most significant objections were around confidentiality issues.

Confidentiality is a big issue for any organisation carrying out product development.  

Companies using open innovation platforms are concerned about the confidentiality of their information to the intermediary and the rest of the world. Even if the company's name is left relatively anonymous, it may be easy for competitors to guess who is behind the problem. Many companies are not comfortable putting out a problem online and broadcasting it to a priori unknown solvers. Online Non-Disclosure Agreements are not satisfactory as anybody can sign them without real engagement or verification.

Intellectual property management is another sensitive aspect of product development programmes.

Who owns the IP of solutions provided through an open innovation solver via an intermediary's Internet platform? The client company, also called seeker, wants to own the IP to use the solution without restriction and gain competitive advantages. However, if the solver wants to get paid, they typically must give up their IP rights.

Top Reservations about Outsourcing R&D and Product Development to Third Parties

The second-largest fear of outsourcing product development was revealed to be around costs. It is essential to understand what fees are being included in comparing outsourcing versus in-house. It is important to remember that outsourcing can often help save money by reducing the number of people on the payroll; this can, in turn, reduce the costs of the organisation in addition to the extra HR administration.

The following reservation is quality control. Organisations need much assurance that the quality of the deliverables is up to standard and regulatory requirements. Outsourcing elements of the product development process can pose the risk that the quality of the delivered product is not up to standard; product quality failure can be costly and highly damaging to the organisation's reputation.

The fourth reservation is whether the outsourced contractor has the necessary qualifications and expertise to carry out the task effectively. Although the outsourced product development contractor may have a strong track record, an organisation needs to be able to trust and verify that they have the required skills and the necessary qualifications for the job.  

Other reservations include a potential loss of ownership, which comes back to the IP issue.

Suppose an organisation is outsourcing the product development process. In that case, it is crucial to understand what their IP rights are in the process. For example, do they own the IP, or do they have a license to use it? If the IP is not their own, they need to ensure that the IP is adequately protected and licensed appropriately.  

The final reservation the survey revealed was around communication. With the constant flow of information and more stakeholders involved in the project, it can be easy to lose sight of the bigger picture.

It can be easy to get bogged down in the project's minutiae and lose sight of the final deliverable.

References


Acknowledgements

With thanks to the following for their valuable insights and contribution:

  • Trudi Sully, Impact Director, Construction Innovation Hub
  • Andrew Vorster, Innovation Catalyst
  • Rob Bennet, Head of Innovation and Presales, MASS
  • Julien Hadley, Innovation and Design Director, Riot Studio
  • Dr Helen Crampin, Innovation and Technology Lead, UK Research and Innovation
  • Andrew Ferber, Chairman and Co-Founder, Vitiprints, LLC
  • Simon Jelley, Head of Innovation
  • Chloe Hampton, Innovation Projects Manager, Hanger19 Ltd

As well as Vipin Pillai, Jillian Moffat, and many others.

About Innovolo

Innovolo is the world's leading provider of Innovation-as-a-Service, helping accelerate product development projects for R&D teams globally through thorough, proven product development and strategic goal alignment process called the Innovolation Framework.

Innovolo works with organisations across a broad range of industries, including but not limited to medical products, industrial manufacturing, automotive, aerospace and defence.

Our team comprises highly experienced product development professionals with expertise in each stage of the product development process. In addition, our team is supported by a network of highly skilled researchers, chemists, and engineers, who enable us to deliver high quality and essential projects quickly.

We work with clients across the globe, including in the United States, the United Kingdom, Canada, Australia, New Zealand, and many European countries.

To find out more about Innovolo, please visit the website at www.innovolo.co.uk.


[1] The share of companies running in-house only decreases as the company size grows, going from 42% for smaller companies (1-50 employees) to only 10% for the most prominent companies (1000+ employees).

[2] An average of 78% of respondents agreed with the following statements, indicating a maturing culture of innovation within companies that carry out a hybrid approach to innovation with in-house and outsourced activities: 1) We actively share innovation best practices within our organisation, 2) The responsibility for innovation is well embedded in our organisation, 3) Our leaders are personally involved in key innovation projects, 4) Our people are well trained in innovative thinking and innovation tooling, 5) Our communication platforms enable and stimulate innovation, 6) Employees are incentivised and feel empowered to support and initiate innovation, 7) We recruit people with a diverse background to become more innovative, and 8) People in our organisation are given explicit time to brainstorm on innovation.

[3] Companies carrying R&D activities using their internal resources only have a lower mean turnover (39% <£5mil) and fewer employees (35% 1-5 employees)

[4] A list of KPIs for innovation and product development for consideration will be found in Appendix A.

[5] Organisations with 51-250 employees

[6] Organisations with 251-1000 employees.

Key Takeways

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Innovolo is a product development as a service provider. It offers R&D teams globally extra capacity, capability, and momentum in their product development and obsolescence management projects. Its services are used by clients in a variety of industries, including automotive, aerospace, consumer electronics, and medical devices. One of its clients is Kawneer, a leading manufacturer of aluminum products for the architectural and construction industries. Kawneer has been using Innovolo's services to help develop new products and to manage the obsolescence of its existing products. Thanks to Innovolo, Kawneer has been able to speed up its product development cycle and to reduce its costs. As a result, Kawneer has been able to bring new products to market faster and to better meet the needs of its customers.

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