“they have trained brains and therefore their wits alone will suffice”

Management structure and location of R&D

There is much variation in how R&D is organised and funded, according to the type of company. Typically nowadays the R&D laboratory operates as a profit centre which gains seventy per cent of its funding from the operating divisions and thirty per cent from corporate funds. Operating divisions tend to fund incremental work. Corporate management tends to fund radical, fundamental and compliance work of interest to the company as a whole. There is often a rule that the R&D department may add a surcharge of ten per cent to its contracts in order to be able to fund work of its own devising, which may include building new capability or generating ideas that will turn into proposals to the company and the divisions.

It is often argued that R&D should be located physically close to operations in order to prevent an ivory tower mentality developing. The converse is that if R&D becomes drawn into too much firefighting work, its proper long-term work suffers.

“very good R&D people tend to become dissatisfied”

R&D Staffing

R&D staff are technical professionals. Many join a company because it provides an environment in which they can practice their congenial vocation. They are likely to adhere to standards of conduct set by their profession rather than by the company. They may aspire to recognition in their technical field rather than by their company directors. Industrial scientists can publish in the scientific literature, appear at conferences and win Nobel prizes. They can also determine the futures of their companies.

Scientists and engineers are trained in their technical disciplines but almost never in the management of their own activities. A good proportion of industrial researchers have a PhD degree, which implies a research training and a deep if possibly academic understanding of one narrow field. They usually have no management training at all and often have an antipathy to management. A few believe that they have trained brains and therefore their wits alone will suffice. There is some evidence that commercial orientation among R&D staff is highly conducive to the success of a company. It is therefore important to involve R&D staff at an early stage of their development in the operational and management activities of the company. It is wise to feed them with a diet of real problems and to take them well into the company’s confidence over the business issues.

An element of business training is also useful. Only a few days study is sufficient to be able to appreciate of the financial and marketing principles that underly the joint stock enterprise which isso powerful in bringing science to market and creating our technological world. The subject of intellectual property provides an example of the shortfall in the education of R&D staff. Even though their job includes making inventions, they do not have the least training about how to secure ownership of inventions. However, general management cannot be smug about this because their training too neglects patents, copyright and design rights.

R&D staff tend to be fairly uniform in qualifications but to vary markedly in their R&D ability. A very small proportion are highly creative and greatly outperform their colleagues in discoveries or inventions made. For some reason these people often have personalities that antagonise their less able peers and their managers. Handling talent provides management’s greatest challenge in a technically-based company.

It is widely asserted that scientists burn out at a young age. This is a myth, and it is more likely that they need to be mature before they can advance to work on the most significant problems. There is a trend for people to start in R&D when young and then either move out to other functions or move up to an R&D management function, at which point they cease to be productive. It is very rare for individuals in R&D to be very well paid, in the way that individual lawyers or managers can be. For this reason even very good R&D people tend to become dissatisfied and move towards other work. Some companies provide a dual ladder career structure that allows the technically able to advance without assuming management responsibilities, but this is rarely implemented effectively. One good idea is to say “thank you” when a good piece of work has been done. GEC gives gold medals each year to its three or four most productive R&D people.