R&D: Vital Element during the Pandemic
Research and development (R&D) is an investigative and creative work intended to lead to discoveries or improvements in existing products or processes. Some companies, in areas such as computer software and pharmaceuticals, depend on scientific research to bring about technological breakthroughs and keep themselves on the cutting edge of their industry. Others apply R&D to improve existing products.
In some cases, the direction of R&D is driven by market research findings that uncover a gap in the market, as it did for the cereal manufacturer Kellogg’s. Market research showed that there was a desire in the UK for a sweeter breakfast cereal made from nuts, which people perceived to be healthy. To meet this need, Kellogg’s instructed its R&D department to design a new breakfast cereal; the result was Kellogg’s Crunchy Nut, which has become the second most popular cereal in the UK. There have been some cases in which market research pointed companies in the wrong direction. A prime example can be seen in the creation of Sony’s Walkman. This portable audio cassette player was invented in 1978 by Nobutoshi Kihara, an audio engineer working for Sony. According to market research, the Sound about (the name for the prototype Walkman) would never sell because focus groups declared that listening to music was a social rather than a solitary activity. However, Akio Morita, Sony’s co-founder, told his R&D department to continue its work and ignore these findings. The Walkman went on to be one of Sony’s most successful products.
More production more success
Intense competition resulting from globalization, alongside rapid technological advances, has shortened the selling lives of many products. To stay in business in this tough trading environment, companies need to launch new products more regularly; those that are complacent and fail to innovate will be overtaken by their rivals. Satellites orbiting the Earth can provide data on time and location to a variety of GPS receivers based on or near the planet. It could be argued that managers who do not invest in R&D are setting up businesses to fail.
Companies such as BMW devote a sizable percentage of their turnover to R&D for motives that extend beyond self-preservation. Those that launch a new product first can charge premium prices and will benefit from monopoly profit =until the competition arrives. Also, consumers’ brand loyalties are usually established early on. Companies that underinvest in R&D, fine to imitate rather than innovate, may have problems establishing a strong customer base. There is more to effective R&D than spending money on technical breakthroughs. According to Akio Morita, converting these advances into products that provide value and benefits for consumers is more important than the breakthrough itself. Therefore, it makes sense for R&D to be done by a multidisciplinary team that includes a representative from marketing, who understands the way the consumer’s mind works.
Importance of R&D in COVID-19
For exploring the implications of the COVID-19 pandemic for the R&D function and identify the imperatives that R&D leaders should be considering in their response to the pandemic and beyond. Here are some tips:
Over the near-to-medium term, this response spans three concrete horizons
Immediate crisis response (Resolve). In this horizon, the focus is on safeguarding employee and patient safety and beginning the path forward. Most companies are in the tail-end of this horizon.
Charting a recovery (Resilience, Return). While the risk of infection and associated localized disruptions continue in this horizon, adaptations to the product development process are introduced to chart the recovery. Most companies report that they are just starting to think through their recovery plans.
Shaping the next normal (Reimagination, Reform): This final horizon builds on the innovations that have been rapidly introduced during the crisis to create a new and more sustainable, patient-centric development paradigm.
Decide on an approach to ongoing and upcoming trials. A challenging part of managing the crisis is making sound decisions about company policy on trial operations. Pharma companies are reporting significant disruption to trials: patients are missing hospital visits, health systems and sites are overwhelmed with care for COVID-19 patients, and companies are experiencing challenges with clinical supplies. They are eager to continue essential trials for life-threatening indications but at the same time want to avoid putting more strain on already stretched health systems or asking immuno-compromised patients to visit test sites. Either way, the implications of interruption to ongoing trials are substantial—both for patients and for the company’s longer-term R&D productivity. Most companies have moved swiftly in revising core components of their trial policies (such as delaying new trial starts or pausing new enrollment) and have actively triaged the feasibility of keeping the trials deemed “essential” running. Our recent survey of clinical operations leaders, while showing variability across therapeutic areas, clearly highlights that sponsors are working diligently to keep trials in high acuity therapeutic areas—such as oncology and rare disease—minimally disrupted.
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