Do You Innovate Like 50-Yr Old McLaren?

A nice long weekend post as I discover that Formula One racing giant McLaren celebrate their 50th anniversary at this year’s Monza Grand Prix. (In particular, check out their Tooned series of vids).

Their ability to constantly innovate is legend.

As goes generally for the circus surrounding F1, from engineering through to administration.

I was struck by quoted R&D stats;

Motorsport firms typically spend 30% of turnover on research and development, compared with 4% in engineering, 6% in automotive and 15% in pharmaceuticals.

I remember all those years ago as a student seeing a bar chart with a world log of country R&D ploughback. Japan were top of the charts, with around 12% back then. Just before their ‘lost decade’.

A cheeky websurf whilst writing this blog uncovered an official UK analysis (pdf) that among its fascinating reporting, includes this baffling finding;

Global R&D intensity (R&D expenditure as a proportion of
sales) stood at 3.6%.
Among the UK’s 1,000 leading companies
R&D intensity stood at only 1.7%.

That strikes me as shockingly low.

Even in retail, twenty years ago, a friend of mine ran what you’d today perhaps consider a seaside gastropub. His partner at the time insisted that each year they keep a substantial amount aside to renovate. Every year seemed a touch excessive to the men involved. But her instinct paid off handsomely. It was remarkable what even a lick of paint and new menus could lead to in terms of extra margin earned.

If you feel that R&D is not something restricted to spend on labs with benches (as I do) then investment in tomorrow should apply across the board.

The encouragement of this abounds in funky new beanbag-and-barfooty 2.0 style firms. Although recently, Yahoo revelled in Google Time (where employees could apparently spend 20% of time on ‘personal projects’) seemingly scaled back to nothing.

Sales teams tend to have no pot set aside for anything even vaguely resembling R&D. Where a sales support role, or the unicornly-rare genuine Sales Ops department, exists, resource always gets sucked in to live deal situations and gets stuck on admin drudgery.

So no future-proofing guarantee there.

And I’m not talking about just training either. Whilst often a winner, the web is full of surveys purporting to show how crazily absent salesteams investment in training is. That these tend to be conducted by sales training outfits themselves and so could be seen as muddying waters, shouldn’t distract from the fact that vested interest or not, their theme is spot on. (By way of illustration, this inc.com article from two years ago quotes such surveys, finding such horrors as 1 in 7 firms never do sales training, and the rest do pitifully little).

Some years ago I myself ran a twelve-week ‘re-vamp’ programme for one technology solution salesforce. The big boss recognised the urgent need with his new team. Yet the sales boss wasn’t interested. For all sorts of reasons. One of them was he moaned about the huge amount of training they’d had that year already. Which turned out to be product launch info and crm screens. That is nowhere near the kind of R&D so essential to long term sustainable sales results.

The above referenced inc piece imagines Tiger Woods saying ‘I don’t need to practice chip shots, I’ve already practiced that before’. The proper example would have been evoking the genius that was Seve. When he was ripping up golf courses in the late 70s, early 80s, in part it was considered down to his incredible focus. Such that whenever there was a rain break, magician Ballesteros would be alone in the locker room, practising chips.

If you’ve ever spent time in internal sales meetings, or car journeys with a rep racing to a call, you’ll know that salespeople as a species never practice their chips. That is a crying shame. And in my experience, tricky to remedy.

Yet leaving “training” aside, there’s plenty of other areas ripe for R&D treatment.

Let’s consider a definition of Research and Development. Here’s the broadest I found;

work directed toward the innovation, introduction, and improvement of products and processes.

So here, if we’re concerned with improving our process, then that opens up things that the prospect sees, and those that they don’t, behind our scenes. A kind of above- or below-the-line split.

How you go about this can be taxing. If you said to sellers spend a day a month on this kind of activity, then I can easily expect most would reply, ‘then reduce our quotas by five percent then…’!

Channelling the new boss of Yahoo, I’m reminded that she banned all homeworking because although people may be more productive working alone, they are less innovative or collaborative.

So some ‘RnD’ can be tackled in a team forum. When a day a month, or afternoon a week, is already devoted to an off-road get-together, then introduce an element of process refinement into its design.

I’d always argue that this should be done anyway, but here I’m thinking more of speculative ideas for the future, rather than the minutiae of reactive sales process sculpting for today.

I remember ten years ago first hearing the phrase ‘blue sky thinking’. A UK subsid of massive global US firm deliberately tasked a sales management committee to come up with unusual ideas. Imagineering, pushing the envelope and out-of-the-box thinking are all similar terms that we could do with a less despised synonym for.

So take (initially) small things. Like customer facing docs. A presentation slide. A way of handling an objection. How you uncover a need. A workshop agenda. A pre-meet questionnaire. A Proposal. A status report.

How else could they look? Why are they valuable? When are they used? What other things could we think of? Which prospects loved which items? Who gets what? Where are they best deployed?

Or you could adapt ‘McLaren’s feedback loop’ to help those legs paddle better beneath the waves. How do you ensure a deal remains on track? Where do alerts come from? Who enacts a remedy? Why are gateways placed such? Which actions are most critical? When is it right to use a certain piece of ammo? What must be done, every time?

I also think it vital to avoid doing any of these tweaks in isolation. They are part of a process, not a one-off hit. It won’t be the first time you visit them that pays off bigtime, it’ll likely rather be only when you start to motor, in potentially several iterations time, that enormo-returns flood in.

As many a firm bases actual annual working days (accounting for leave, public hols and sickness) around 220 days, then the two percent global R&D amount could translate as roughly 5 days.

Is it too much to commit to half a day a month for people to truly pursue R&D sales innovation?