Governance sets the stage for blockbuster+
Governance refers to the governing body or senior executives responsible for corporate R&D. This is functional governance with specific functional roles and responsibilities, as opposed to corporate governance with overall corporate responsibilities.
R&D governance generally has authority to make all major decisions about the R&D function: strategy, where to invest, organization, etc. It receives authority from the corporate board (or its equivalent) in a specific grant of authority. It maintains this grant of authority through its relationship with the corporate board: a relationship based on results.
Expand all | Collapse all Perhaps the most important challenge for the governance body is to set the stage for discontinuous discovery, where neither the time nor the place of the next breakthrough can be predicted beforehand.
Returns on investments in these products are discontinuous, and yet we seek continuous (and smooth) funding during the course of the hunt. A major task, perhaps the most important task, for the governance body is to smooth out the differences between these two (without resorting to numbers games). How do I cover the costs of my hunt(s) for blockbuster products during the interim years?
Another challenge for the officials in governance is to set the example of behaviors needed for improved R&D effectiveness: Do as I do.
This refers to behaviors of the governance body relating to evidence gathering (for investments), risk management (of investments) and behavior management (of themselves). Investment behaviors+
Finally, officials that make up the governing body need to think like investors and not researchers.
These individuals typically come out of research and have intimate knowledge of the research materials. They have a leg-up on a typical investor in that they can more accurately judge the scientific claims of the individuals requesting investment funds. But most governance officials today are rather hampered by their research origins. They default to research thinking rather than investment thinking. What is it about this investment that will make it a success or failure regardless of the underlying science?
More Core Arguments for Governance
