Research and development operations serve as a cornerstone for businesses in a multitude of industries. Most executives who tap into the benefits of the R&D tax credit recognize that the process of experimentation doesn't always result in a "success" – and that's okay. Even "failed" research and development initiatives can qualify for the innovation tax credit.
Several Factors Can Hinder the Research and Development Process
What most people don't realize is that the end results aren't the only concern when innovating. The entire R&D process itself is often rife with unexpected challenges and disruptions. Even the biggest companies can find their efforts to advance products, processes, and protocols obstructed by myriad circumstances that go beyond finances. Here are a few of the biggest potential challenges to your research and development initiatives, as well as some tips on how to best resolve them before they grind your operations to a halt.
Lack of Resources
Both human and non-human resources play a vital role in supporting any research and development initiative. Most business owners assess the non-human resources required for a project's success, ensuring the teams have access to required materials. However, many fail to properly evaluate the bandwidth of available staff resources needed to support the research, innovation, and production components of the initiative, ultimately hindering the overall program. It’s important to remember that effective personnel management can directly impact research and development for companies of every size and in every vertical. Executives should carefully consider realistic workload expectations and productivity measures to identify the total number of resources needed to fully support a program before the launch.
Restrictive Managerial Style
The management practices within an organization can also obstruct innovation. Micromanagement, lack of worker autonomy, unclear strategies and goals, and promoting a work environment of "silos" are just a few of the many factors that may make the research and development process slower and less productive. The best way to ensure leadership isn't posing a risk to R&D programs is to take a strategic inventory of the company's overall management style, working to include several mission-critical practices into your organization, such as:
Establish a professional environment where workers are given both the independence and freedom to work at their own pace, with a sense of control over outcome and output.
- Clear Goals/Shared Vision
Many R&D companies only delegate tasks without sharing the corporate goals and vision with employees. Equipping employees with clearly defined objectives and an understanding of how they are contributing to the company's overall purpose can motivate staff members to elevate R&D practices.
- Executive Encouragement
Finally, a corporate culture where managers encourage, support, and value employees can prove a positive environment for research and development campaigns. Managers who lead by example, promote constructive communication, and encourage collaboration can help staff members create dedicated teams who trust each other throughout the innovation process.
Failing to Develop Both Short- and Long-Term Goals
Many technology and innovation companies have mastered either short- or long-term goal development. However, dynamic research and development companies recognize the importance of navigating through both within their operations. Business owners and stakeholders must designate a group of innovators who have the talents and capabilities of mapping out the next five to ten years. However, they must also appoint groups ready to design, develop, program, and release products in upcoming years and even quarters to keep the company on the cutting edge of innovation and ahead of the competitive pack.
Contact Acena Consulting Today
Acena Consulting specializes in R&D tax credit studies that maximize client benefit and overall ROI. Contact our team of financial specialists today to learn more.