you’ve defined most R&D very well at large chemical companies.
Another point of note and could be a discussion. Business development “aka” technical sales in the industry is dominated by former engineers. I believe this is because they can see trends and troubleshoot customer challenges.
Very rarely are sales “dialing for dollars” in this industry now
I have noticed technical sales roles becoming more common as opposed to a "pure salesperson" without technical experience.
As for the cold calling, I have seen/discussed doing this with some marketing people and it's often done via new product in a new market project and I've even been on some of those calls (not the initial) as the "technical person"
One thing I didn't do here (maybe I will later) is that the job of R&D is ultimately to sell product however they can and the technical persuasion technique is just the de facto mode of selling that R&D people do by supplying data etc.
Pure cold calling is rough, targeted planned calling for new products is different and sounds more like what you were doing?
And you are technical. Even if not a PhD scientist in that focus area, you know enough to translate their need into a material spec.
Also, pure R&D diminishes margin in many cases. I believe that’s the concept of the innovators dilemma. Essentially a better product could mean less money you’d make. For example, 2x the coating lifetime means 1/2 the paint sold. Sure the end user spend less but then a paint company sells less paint. And generally they wouldn’t get 2x the price it would be 1.5x and less revenue/profit to be made. So instead we are at R&D to sell more product and pitch it as a benefit to a customer.
Then again maybe I’m too cynical. I generally hope the audience and people are waking up and solving this from a financial standpoint and really wanting to pay a premium for better products for our world even if less material usage.
yeah, I mean cold calling of targeted customers for sure.
I agree on the innovation dilemma, but this is why marketing people get paid the big bucks or why some tend to run away after a few years. If I come up with something that is 2x the value at 1.3x the cost then there should have been market demand for it already (voice of the customer, etc) before I even started working on it. Plus, no one knows if your 2x paint will actually lead to less paint sold, I suspect it results in more paint sold as customers flock to the obvious value for a marginal price increase. I don't think homeowners are doing MEK double rubs or crosshatch adhesion, but it just needs to kinda deliver in the field.
In the end it's just your plant's volume that matters and getting rid of low margin products.
Slight premium for higher performance is the direction we've been on for decades and to stick with our paint analogy if we think about total solvent in a can of paint in the 1960s versus now it's kind of amazing. I think Eastman has been busy on Polyesters for awhile and they have displaced many of the consumer polycarbonate applications.
<i>Essentially a better product could mean less money you’d make. For example, 2x the coating lifetime means 1/2 the paint sold. Sure the end user spend less but then a paint company sells less paint. </i>
Very true, but the picture is murkier when you have competitors in the space. So if there is going to be a product in the market that has 2x the coating lifetime at the same price, it had better come from your R&D lab, and not someone else's.
Totally agree, but it’s why SW, PPG, or any industry buys companies. Protect their markets if new entrants come while cash cowing their current markets.
I don’t have stats but I’d be most material innovation didn’t come from big companies they merged or acquired.
I think in some industries, buying the competitors / upstarts does work. My experience was in an integrated industry where the chemical product was one part of a larger system with mixing-and-matching almost impossible. Acquisition for the purpose of acquiring innovation / technology wasn't really part of the landscape, so far as I could see.
True, there are so many nuances to any market that make different models viable as well as different minds making decisions. Each of us will come from different perspectives too of which way works.
"Perhaps companies that are wholly composed of doing business in “bits” will get displaced by new entrants while those who have a footprint in the “atoms” will be harder to replace. It’s why I think we will still be using iPhones in twenty years, but perhaps Facebook will become synonymous with Geocities in the same time frame."
This basically describes my big-industrial-research-centre experience (about 10 years) quite well.
Some truly ground-breaking stuff and new idea generation (definitely not the majority of my time), lots of cost-down and product substitution work (probably the majority of my time), minor tweaks, keeping up with (or at least keeping track of) the Joneses, etc. The R&D was there as a technical service, but also to be sure that "if our business is going to be disrupted, we want to be the ones to be doing that disrupting" (basically these words uttered by the company's Chief Innovation Officer).
The R&D was also important in securing business in an indirect way -- bringing big potential customers through the research labs to show all the cool equipment (= "we are innovative") and also that there is an R&D presence here vs. importing the technology from other countries. I led lots of tours where these were the central messages and they did seem to help sell product / services (or so I was told).
you’ve defined most R&D very well at large chemical companies.
Another point of note and could be a discussion. Business development “aka” technical sales in the industry is dominated by former engineers. I believe this is because they can see trends and troubleshoot customer challenges.
Very rarely are sales “dialing for dollars” in this industry now
I have noticed technical sales roles becoming more common as opposed to a "pure salesperson" without technical experience.
As for the cold calling, I have seen/discussed doing this with some marketing people and it's often done via new product in a new market project and I've even been on some of those calls (not the initial) as the "technical person"
One thing I didn't do here (maybe I will later) is that the job of R&D is ultimately to sell product however they can and the technical persuasion technique is just the de facto mode of selling that R&D people do by supplying data etc.
Pure cold calling is rough, targeted planned calling for new products is different and sounds more like what you were doing?
And you are technical. Even if not a PhD scientist in that focus area, you know enough to translate their need into a material spec.
Also, pure R&D diminishes margin in many cases. I believe that’s the concept of the innovators dilemma. Essentially a better product could mean less money you’d make. For example, 2x the coating lifetime means 1/2 the paint sold. Sure the end user spend less but then a paint company sells less paint. And generally they wouldn’t get 2x the price it would be 1.5x and less revenue/profit to be made. So instead we are at R&D to sell more product and pitch it as a benefit to a customer.
Then again maybe I’m too cynical. I generally hope the audience and people are waking up and solving this from a financial standpoint and really wanting to pay a premium for better products for our world even if less material usage.
yeah, I mean cold calling of targeted customers for sure.
I agree on the innovation dilemma, but this is why marketing people get paid the big bucks or why some tend to run away after a few years. If I come up with something that is 2x the value at 1.3x the cost then there should have been market demand for it already (voice of the customer, etc) before I even started working on it. Plus, no one knows if your 2x paint will actually lead to less paint sold, I suspect it results in more paint sold as customers flock to the obvious value for a marginal price increase. I don't think homeowners are doing MEK double rubs or crosshatch adhesion, but it just needs to kinda deliver in the field.
In the end it's just your plant's volume that matters and getting rid of low margin products.
Slight premium for higher performance is the direction we've been on for decades and to stick with our paint analogy if we think about total solvent in a can of paint in the 1960s versus now it's kind of amazing. I think Eastman has been busy on Polyesters for awhile and they have displaced many of the consumer polycarbonate applications.
Anyways, great comments Phil! Thanks for reading.
<i>Essentially a better product could mean less money you’d make. For example, 2x the coating lifetime means 1/2 the paint sold. Sure the end user spend less but then a paint company sells less paint. </i>
Very true, but the picture is murkier when you have competitors in the space. So if there is going to be a product in the market that has 2x the coating lifetime at the same price, it had better come from your R&D lab, and not someone else's.
100% it’s better to kill your own products with a new one as opposed to waiting for someone else to do it.
Totally agree, but it’s why SW, PPG, or any industry buys companies. Protect their markets if new entrants come while cash cowing their current markets.
I don’t have stats but I’d be most material innovation didn’t come from big companies they merged or acquired.
I think in some industries, buying the competitors / upstarts does work. My experience was in an integrated industry where the chemical product was one part of a larger system with mixing-and-matching almost impossible. Acquisition for the purpose of acquiring innovation / technology wasn't really part of the landscape, so far as I could see.
True, there are so many nuances to any market that make different models viable as well as different minds making decisions. Each of us will come from different perspectives too of which way works.
‘Bet
"Perhaps companies that are wholly composed of doing business in “bits” will get displaced by new entrants while those who have a footprint in the “atoms” will be harder to replace. It’s why I think we will still be using iPhones in twenty years, but perhaps Facebook will become synonymous with Geocities in the same time frame."
Couldn't agree more.
This basically describes my big-industrial-research-centre experience (about 10 years) quite well.
Some truly ground-breaking stuff and new idea generation (definitely not the majority of my time), lots of cost-down and product substitution work (probably the majority of my time), minor tweaks, keeping up with (or at least keeping track of) the Joneses, etc. The R&D was there as a technical service, but also to be sure that "if our business is going to be disrupted, we want to be the ones to be doing that disrupting" (basically these words uttered by the company's Chief Innovation Officer).
The R&D was also important in securing business in an indirect way -- bringing big potential customers through the research labs to show all the cool equipment (= "we are innovative") and also that there is an R&D presence here vs. importing the technology from other countries. I led lots of tours where these were the central messages and they did seem to help sell product / services (or so I was told).