Here are some key considerations to keep in mind to have successful, profitable outcomes from your research and development (R&D) initiatives. This assumes that you have an R&D budget. However, when companies are in a growth period, they sometimes forget that it’s important to lay the groundwork that will sustain your growth in the future. Don’t let that happen to you.

Getting Started with Project Goals

The first step in any R&D project is to clearly define your initial goals. You can get the ball rolling by setting specific goals (such as developing an innovative product) or by outlining an overall mission that fuels your team’s creativity. When defining goals, set both long and short-term objectives. Short-term goals (three to six months) will have more of an “immediate” payback. Longer-term goals can last a year or more. Goal management is absolutely critical to success.

Pay attention to results. The lack of meaningful output can decrease motivation. If this happens, it may be a good idea to swap out/in new team members to inject fresh ideas and excitement.

Set an R&D Budget and Assign a Project Manager

A good rule of thumb for an R&D budget is to spend 3 to 5% of annual revenue. It is critically important to keep track of costs so that you know how much to eventually charge for your innovation so that the investment becomes profitable. You must also take into consideration how much a customer would be willing to pay for your development.

It is also a good idea to perform a risk assessment with all stakeholders (including those who are not on the R&D team) to weigh in on what will work and is worth the investment.You also need to assign a project manager to manage the budget and keep the team on track. In addition to keeping the team focused on the goal, he or she will be responsible for monitoring progress and making sure the budget is on target.