Better Ways to Green Light New Projects
Summary
Selecting innovative new projects for further investment and development is critical — and hard. The best R&D projects can renew an organization’s product lines, processes, and services, improving its performance and competitiveness. But deciding which new ideas are winners and which are duds is tough, because new initiatives are characterized by fundamental technological and market uncertainty. Research by Sloan Management Review shows that at many companies, bias and process issues can imperil good decisions.
To improve their track record of choosing the right innovations to bring forward, leaders must first understand where R&D selection panels go wrong. Based on their research, the Review authors have identified five main categories of such issues. Theysuggest specific steps that leaders can take before, during, and after the selection process in order to make more objective, fact-based decisions about which new ideas to green-light. While nothing can eliminate all risk from an inherently speculative endeavor, improving the process can tip the odds in companies’ favor.