Justifying R&D expenditure
to shareholders and executive boards
can be tricky.
Benefits might not be seen for years,
if they are seen at all.
In Leigh Gallagher’s article,
DuPont CEO Ellen Kullman shares
“”We do spend $2 billion a year on R&D,
and that’s a lot of money,”
she said.
“Investors say,
how do you know
if you’re getting a return from that investment?'”
She said she gives them “mileposts,”
proof in the form of margin expansion,
products that didn’t exist four years ago,
and other metrics.
“I spend a lot of time understanding
we’re getting a return for it,”
she told the audience,
adding she has to explain to investors
the company hits a lot of singles and doubles
as well as home runs.
“But that’s what’s fun for me.
That’s what drives me.”
Develop these mileposts.
Justify your R&D spend.