Managers at Work: You Can Measure External Research Programs

Abstract

External research projects at Air Products are delivering substantial benefits: * We are saving an average of two years of internal effort with each external project. * Most of our external projects save us hundreds of thousands of dollars of net research expenditures. * Our average external project provides novel technology using the unique skills and know-how of our partners and offers a potential revenue increase of tens of millions of dollars per year, or a profit increase of millions of dollars per year. How can we make such bold, sweeping statements? We have developed a simple tool to measure external research projects that provides us with a wealth of useful information. The tool consists of a table of rating scales that are used in conjunction with very brief, perhaps five-to ten-minute, interviews with the technical project champions to rate each project. We have evaluated 42 external projects to date with overall scores running from 8-34 out of a possible range of 2-34. We are confident that these projects will deliver the projected benefits, and we are particularly excited about reflecting the impact of that top-rated project in our bottom line! So far, we have only used this technique for our first annual snapshot review of our external projects, but the tool has provided such useful results that we are confident of its utility for other organizations. We expect to use it in the future to monitor changes in the projects as they go through the stages of development. Furthermore, we anticipate monitoring the follow-up commercial commitment and impact of these projects and look forward to replacing the estimates with actual project performance data. $5.5B Global Company Air Products and Chemicals, Inc. is a $5.5 billion global company producing industrial and specialty gases and chemicals. We perform about $130 million of RD our partners have found areas for research that have real value and uses along with access to additional funding. Our partners include industrial consortia, universities, government labs, and unique (often small) research and development companies. We were confident that we had gained competitive advantages through increased speed, improved probability of success, and reduced overall cost. However, we wanted to quantify these gains from our external technology projects, so we developed the table shown above, which provides a one-page-per-project rating tool. Rating Tool for Projecting the Impact of External Research Projects New Expertise, New Skills, Time Stage Idea Capabilities Saved External Technology Research (1) Internal Technology Research (2) Application/Process Development/ Commercialization Rating (3) Scientific World-class >Two 3 advance fundamental years understanding 2 Novel Unique skill 1-2 technology or know-how years 1 New Unique Months wrinkle capability 0 Idea Outsourced =$1 MM exclusive & royalty-free 2 $100 Ks Exclusive/low Extension royalty or non-exclusive/ free 1 $10 Ks Little or Incremental non-exclusive & royalty 0 $200 MM Offensive/ 5 3 or high critical breadth & depth 2 $20-200 MM Defensive/ 3 or high critical breadth or depth 1 $50 MM Block- 3 sales or buster $7 MM savings; e. …

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 6 citations exist upstream.