3 Things R&D Leaders Can Do to Improve Business Acumen Skills


One of the most interesting things that I have observed during the past few months of working with r&d-improvement.jpglarge global organizations is that too many of them are trusting their R&D leaders to make critical business decisions without providing them with the Business Acumen skills and tools they need to make the right business choices.  Think about the pharmaceutical company, the technology company, or the chemical company who is investing billions of dollars into R&D and product development by empowering teams to bring new products to market without the skills or tools to know if their decisions and actions will be successful.

I recently had the privilege of conducting an Advanced Business Acumen session for a group of high potential R&D leaders and am pleased to share some of the specific outcomes of that engagement with readers of this blog.

Here are three key learnings that participants shared with their managers and executive sponsors at the conclusion of their learning journeys.

Drive shareholder value

The most significant thing an R&D leader can do with enhanced Business Acumen skills is drive shareholder value.  Shareholder value is a function of revenues, profit, product portfolio, asset utilization, pipeline, and cash flow; all of the things that R&D leaders touch but typically don’t directly impact.  Ultimately, the drivers of shareholder value start with delivering the right value proposition to the right customers and R&D leaders who have enhanced Business Acumen skills are about to develop the right portfolio of attributes and benefits that customers want and will pay for as opposed to pushing over-engineered products into a market that customers may not want to buy.

Cut projects before it’s too late

R&D leaders who improve business acumen skills can assess markets and competitors during the development process and if they determine that a potential new product doesn’t have commercial viability, they can cut a project before it’s too late.  Traditional organizations invest in R&D who give completed product designs over to manufacturing to make, and then over to the Marketing and Sales functions to sell.  R&D leaders who can proactively engage in the process and make these decisions can save their organizations many millions of dollars.  By doing this, they are helping the Marketing and Sales functions in multiple ways.  They help Marketing by being better partners in the process of managing the portfolio and they help sales by developing new products that have a higher likelihood to succeed.

Manage a Budget and Optimize Return on Capital

Terms like Budgeting, Capital Budgeting, Return on Assets, and Return on Capital Invested are typically not in the vocabularies of R&D leaders.  But R&D leaders with enhanced Business Acumen skills embrace these concepts and more importantly know how to optimize them for the strongest impact and returns.  By seeing the big picture of what drives profitability and being able to translate that knowledge into actionable decision-making, R&D leaders can create alignment and lead their teams and their organizations to success.

why business acumen matters

Robert Brodo

About The Author

Robert Brodo is co-founder of Advantexe. He has more than 20 years of training and business simulation experience.