R&D Leaves the Lab and Meets Business – Learn How to Manage Innovation Without Wasting Resources

We break them down to shift the discussion from abstract concepts to tangible actions that influence our everyday work. This article gives our take on research and development.

Meet Konrad — an innovation expert

Over the course of his career, Konrad Jarociński worked across the globe from the USA to New Zealand and had various roles, from an Analyst to a Technical Leader. He has gained expertise in different industries: healthcare, travel, and retail, among others, but one thing remained constant – he’s focused on applying the latest technologies to transform businesses.

As the Research and Development (R&D) Lead at Netguru, Konrad makes sure the company remains at the forefront of innovative technologies and advises customers on how to build market-winning products.

“When we see a growing demand in a specific technology we try not only to understand it, but also to see how it can solve business problems,” says Konrad. “Many interesting and innovative technologies failed because they didn't serve a purpose”.

Modern R&D is deeply immersed in business

Historically, R&D departments have focused on new technologies, trying out which of them would actually work, without having a specific business context. “It’s like searching for a problem once you have the solution. I think we are way past that,” says Konrad.

“R&D has the responsibility for increasing the chances of building products and services that succeed in the market.”

That’s why it needs to be connected not only with technical teams, but also marketing, sales, and customer service to build a deep understanding of existing challenges and opportunities. Otherwise, there are two possible failures that undermine companies' innovation efforts and deplete their budgets:

“1. Experimenting with a fancy technology, only because it’s fancy, to eventually discover there is no demand for it.
2. Innovating in an area without an identified business value only because seemingly everyone else is doing it."

Effective R&D process in a nutshell

Netguru’s R&D process is the same for internal projects and for cooperation with clients’ teams. The research part focuses on defining the right business problem or opportunity and performing quick tests to validate business value assumptions.

The more perspectives one can include in this step, the more complete a picture of a situation emerges. “Many corporate innovation ventures fail because they jump into work that has no clear business value confirmed with stakeholders,” adds Konrad.

The objective of the development part is to understand how to realize this value by running iterative experiments. Their goal is to deliver a prototype of the solution and improve it with each cycle. In this step, the short feedback loop between development and business teams is crucial for the effective delivery of business value.

“It minimizes the risk that the team will lose sight of the purpose of solving a business problem,” says Konrad. “There is a real danger that exploring the potential of technology becomes so enticing that it overshadows the actual goal of the project”.

R&D’s cooperation with non-technical departments doesn’t end here. “Our innovation consulting involves working with our customers on change management activities as well,” explains Konrad. “Effective communication of the value proposition is a massive driver in the adoption of the new products on the market as well as using enhanced processes within enterprises.”

Multipurpose of R&D at Netguru

The benefits of having an R&D team are clear for product companies, but may not be so obvious for a service company like Netguru. Nevertheless, they are equally meaningful. Konrad presents multiple ways his team brings value to Netguru:

• Developing new skills

“We keep ourselves sharp by developing our products. It helps to stay on top of technologies that actually can make a difference in digital transformation projects. We try out new solutions, processes, and tools on internal projects and safely transfer these learnings to our commercial engagements with customers. ”

• Steering strategic direction

“Everyone has to prioritize. Even Google doesn't have enough resources to commit to all the technologies worth investing in. The software radar is our internal technology roadmap where we assess innovative ideas from different perspectives, e.g. commercial feasibility, market demand, size, and maturity of the supporting community”

• Innovation consulting

“We advise our customers in their innovation journeys on making the right bets, applying battle-tested processes, scaling up new solutions, and succeeding on the market. Sometimes there is even no need to build new things and combining existing pieces in a different way is enough, but it takes experience and practice to do it effectively.”

External R&D engagements may vary, explains Konrad:

“It can be a hackathon with a customer’s team to define a business opportunity or prototype a possible solution, it can be taking over an innovative project to rapidly iterate on it in a constraint-free environment, or it can be close cooperation on a digital transformation program”.

An internal R&D project might involve building and releasing a Netguru product, like Kunster.

“We wanted to test the commercial readiness of applying style transfer in real-time, as no one did that before. At the same time, we could do something meaningful - provide a new way to experience art without leaving your living room, which happened to be very valuable after the pandemic lockdowns were imposed in many countries”.

The difficult art of innovation

“Having an R&D team is an overhead. One needs at least several people working full-time on projects which won’t bring expected results from day one,” warns Konrad and suggests mixing different approaches to manage the innovation portfolio of a company.

One of the options is to create an internal innovation lab or startup. However, Konrad points out that ”It requires a delicate balance between decoupling it from regular operations and keeping governance that will bring the results back to the core operations of the company.”

Having an external partner who can act independently can help to avoid this problem. Additionally, such a partner provides an outsider's perspective and opens possibilities to apply solutions transferred from different industries.

A hackathon is more appropriate for initiatives that explore emerging technologies. It is great for ideation, but is not a delivery mechanism.

“Obviously, it won’t solve your business problem in one or two days, but a hackathon can verify if the business problem is even solvable or what resources are necessary to continue working on it,” says Konrad.

There is a rising trend of open hackathons where companies invite vendors, startups, and tech communities to participate. According to Konrad “It can be an effective way to form a capable team and engage in a commercial project later on.”

4 Proven fundamentals of R&D

There is no silver bullet and each approach to innovation has its own challenges. Regardless of what you choose, Konrad suggests following these rules in any R&D work to maximize the chances of success:

• Start with a problem

“Run a workshop to understand the complexity and magnitude of a problem. Bring in external experts to provide an unbiased and fresh perspective.”

• Don’t confuse attractive solutions with effective ones

“It's very easy to get carried away by technological advancements. But one needs to ask whether they are actually fit for purpose. Simple and seemingly boring solutions often outperform those that receive the most hype.”

• Embrace agile development principles

“Form a hypothesis and test it iteratively. Don’t plan a big program of work without doing a small POC or prototype first. It’s always trial and error, so investing too much too fast might actually be a waste of resources.”

• Record and distribute lessons learned

“It is equally important to identify reasons for an R&D initiative’s success as the rationale for killing it. Sharing with stakeholders is one of the ways that R&D brings value to the whole organization’s project portfolio.”

Konrad shared his expertise at Disruption Forum Innovation Labs on 22nd October. Sign up to get recordings of the panels.