Chapter 3. CREATING A PRODUCTIVE AND EFFECTIVE R&D ORGANIZATION

In Chapter 2 we introduced the four key elements required for an effective R&D organization. In this chapter we will continue our discussion of these elements, emphasizing in greater depth those aspects that we believe are especially related to organizational effectiveness.

The productivity of an industrial operation usually includes the quantity of its output and its quality. However, in an R&D organization, many units of output are intangible and subjective in nature. Productivity also needs to relate to the objectives and goals of the organization. Consequently, to focus comprehensively on R&D productivity, the concept of "organization effectiveness" is proposed.

Organization effectiveness is a vector that includes quantifiable and nonquantifiable outputs and reflects the quality and the relationship of outputs to broad organizational goals and objectives. Organization effectiveness has a one-to-one correspondence to the general concept of productivity, but it also includes items not always included in productivity—for instance, quality and utility (i.e., relevance to organization objectives). Using this definition, if an organization is very effective, it is very productive, and if it is not very effective, then it is not very productive. Not only should an organization be productive, but it needs to be viable over a considerable period of time. This in turn requires that members be satisfied with the organization.