Chemical R&D does not have to be a black box

Build an organization to release the source of value. In order to determine the correct organizational structure, executives need to clearly understand the role of the central R&D team, where resources should be placed, and which capabilities are most necessary. First, transform the innovation strategy into a small set of specific principles, such as extending existing technologies to new markets, making full use of global capabilities, or improving cross-functional coordination. These design principles form the basis for evaluating organizational structure alternatives.
Benefit from R&D transformation

Chemical R&D does not have to be a black box. Chemical companies that invest time in evaluating and transforming R&D will reap significant benefits, including:

Have a stronger ability to promote organic growth;
Reverse stock losses without increasing investment;
Clarify which R&D projects need to be shelved and which projects need to be promoted;
More effective commercialization throughout the organization; and
Stronger decision-making power and accountability system to ensure customer-centricity.
It takes time to improve R&D work, the commitment of senior leaders, and perseverance in order to achieve the greatest potential. But this is a journey that every chemical company should consider.


The application of agility in chemicals

The basic principle of agile is simple: seize the opportunity and form a small, cross-functional, empowered and self-managed team to focus on it. This method originated in the software industry, and it increased the productivity of tens of thousands of software development projects by 39%. Other industries have also adopted this method, but the speed of popularization in the chemical industry is very slow.

The planning leader of an agile team usually extracts from business functions, uses techniques such as design thinking to build a catalog of promising ideas or features, and continuously (relentlessly) based on the potential value to the customer and the company Prioritize the list. The team divides the highest-priority tasks into small modules, decides how to deal with them, and then starts to build a working version in a short period called a sprint.

The most important success factors for applying agile methods in R&D in the chemical industry include:

Pay attention to customer needs. Agile teams must continuously optimize their priorities to ensure that they are working on the right opportunities. Sometimes this means saying no to executives who ask to jump in to do their favorite projects. Success depends on the authorization team saying "no".
Add the right functions to the team. Must include the general manager and product line leader, but also sales staff, which brings the voice of the customer to the team. Marketing helps to measure the size of the market, beyond current customers, manufacturing and supply chains can judge whether products can be produced at the correct cost and time, and R&D defines what is technically possible.
Establish an agile operating model. Agile teams can move quickly, but in order to bring products to market faster, companies often have to change the larger organization. For example, support functions such as planning and procurement will need to become more agile to keep up with the productivity growth of R&D.