R&D Strategy: Don’t Miss This Opportunity

read on Forbes

This January, NVIDIA and Eli Lilly announced a new co-innovation lab for drug discovery. The partnership connects computational science and wet lab science into a continuous loop. AI and robotics are embedded directly in the research process so that experiments, data generation, and model development inform one another in real time. As NVIDIA CEO Jensen Huang described it, the goal is to let scientists explore biological and chemical spaces digitally before a single molecule ever gets made.

The scale of the partnership is impressive, but Eli Lilly is doing more than improving how development works inside its company. It’s reinventing how drug discovery happens. Because of that, the R&D team is changing the way they work, fund, and measure results. And they’re not the only ones.

When the pace of technological change accelerates, R&D becomes indispensable. Some companies that previously saw it as a cost center to be managed are beginning to understand it as a resource to see what’s coming. The role of Research and Development in a large enterprise is in a time of flux. Many R&D managers are struggling to adapt. But some future-focused leaders see this moment as an opportunity.

A Tale of Three Companies

Recently, my teammates and I have been working with three different R&D organizations. One is at a giant technology firm. A second supports a large consumer-packaged goods company. A third operates within a financial services company.

All three are feeling the pressure. What separates them isn’t their sector, their budget, or their talent. It’s how each team, and the enterprises they work within, understands the role of R&D.

The team at the tech company is besieged. The company has laid off nearly a third of its staff to fund sizable AI investments. R&D is being asked to focus on cost savings and efficiency. Product teams are being directed to do their own “vibe coding.” The company is working with an outside technology partner, and the internal team seems increasingly shut out from the conversation. Here, the enterprise is still looking to figure out the future, just not with the R&D team. They’ve been sidelined, and their work has become less about shaping the future and more about surviving the quarter without losing relevance entirely.

The consumer-packaged goods R&D team isn’t being asked to focus on cost savings. Instead, leadership is looking to them to answer what might be possible over the next ten years. But that team is wary of getting too far ahead of the rest of the company. They want a clearer vision from the top, be it from the CEO or the head of marketing. Their hesitation is understandable. Experience tells them that whatever they’d propose would be interesting but disconnected from where the business is actually prepared to go. But that hesitation is preventing them from stepping into a leadership role. Technology is in flux, and they have a chance to show what’s possible.

The R&D team at the bank is neither accepting nor reluctant. When they look around the organization, they see too many people who are anchored in an older version of the industry. They hear confident assumptions from other functions that things like wealth management and advisory will remain similar to how they’ve looked for the last twenty years. Yes, people acknowledge AI. Yes, they nod at blockchain. But they insist the human relationship will stay central to the game. The advisory model will stay recognizable. The technology will only lower costs and make existing processes more efficient.

Faced with that kind of past-focused thinking, this R&D team believes that they don’t have the luxury of waiting for the rest of the enterprise to catch up. They’re not arrogant. They just feel in their bones that someone has to start the work of pulling the future into focus before the organization can meaningfully respond to it. The team has initiated a process to formulate an R&D strategy for the next ten years. They’re trying to envision how technology and market dynamics will evolve and define platforms for further investment.

The Transformation of a Function

The different reactions across R&D leaders aren’t surprising. They’re the result of how R&D has been shaped over time.

In the good old days, R&D could operate like Xerox PARC or AT&T Bell Labs, where budgets were large, and researchers could work on whatever they wanted. R&D was something many companies treated as an isolated function. It had its own people, its own processes, and often its own buildings. It generated ideas, technologies, and prototypes for the rest of the business to evaluate, absorb, or ignore. Those organizations produced world-changing breakthroughs like the internet and mobile phones. But their parent companies were often unable to profit from what they produced. There was brilliance, if not an enterprise-level understanding of what to do with it.

Over time, the pendulum swung in the other direction.

Without a clear return, too many companies started to overmanage R&D. Exploration couldn’t be the point. They loaded development down with short-term metrics and cost-cutting mandates that made it harder to do the real work. To be sure, cost-cutting matters. If you dig through your couch cushions from time to time, you’ll find a few nickels. But you’re not going to put your kids through college with that.

The deeper problem is that companies started asking R&D to justify itself in the language of the present, even when its real job is to help the enterprise become fluent in the future.

Faced with new challenges, the role is once again in flux. People are starting to remember that R&D is often where the earliest signs of change show up: new technologies, new capabilities, and new possibilities. The people closest to those signals have a kind of power. They can see things before others do. They bridge the gap between the current business and future opportunities.

Cracking The Chocolate Genome

Years ago, I had the privilege of advising Ralph Jerome at Mars. Mars makes all sorts of different food products, including candy like M&M’s and Snickers. Mars is a private company, and the family that owns it cares deeply about where it will be in decades, not quarters. As their global head of R&D, Ralph understood instinctively that his role was bigger than his functional title.

At the time, Mars was facing a problem that most people outside the business couldn’t see. The cacao plant that chocolate is made from was under mounting pressure from climate change, disease, and political instability.

Ralph spent time envisioning the future of chocolate. Not the quarterly future. The real future. The one that asks what happens if the underlying conditions of an industry begin to fail. Continuing down the path the industry was on, it was not impossible to imagine a world, fifty years out, in which chocolate as we know it might go away altogether.

So, Ralph did something extraordinary. In 2008, he set out to map the genome of the cacao plant. The human genome had only recently been mapped. If Mars could decode the cacao genome, they might begin to breed a more robust plant, one strong enough to survive the future that was coming.

Recognizing the scale of this kind of ambition, he reached out to the USDA to collaborate. He soon realized that neither Mars nor the government had the kind of computing power they needed. This was a system problem, and system problems require broad coalitions. So, he invited IBM to join the partnership and bring its supercomputers to bear on the problem. The team finished their first map in 2010.

Ralph couldn’t stop there, however. They needed more help to truly solve the problem. In a move that surprised everyone, he shared the genome with Mars’s competitors, including Nestlé, Hershey, and Cadbury. After all, if the cacao plant went away, they were all in trouble.

Today, while competitors are reformulating products to use less cacao, Mars is still building on the platform Ralph started. Mars has partnered with biotech firms to gene-edit a more climate-resistant cacao plant, and committed a billion dollars over ten years to sustainable cacao production. The crisis he saw coming in 2008 has arrived. And Mars was ready.

In a time when plenty of snack food companies thought innovation meant stuff like adding bigger flavor crystals, Ralph played a completely different game.

Future Focused Leadership

Most companies ask R&D to save money, move faster, or support what already exists. Over time, R&D learns to stay close to what the business is ready to hear. But some teams are redefining what R&D needs to be right now. Companies like Eli Lilly and Mars have an expanded view of what R&D can do. Eli Lilly is reinventing drug discovery. Mars used R&D to face down a critical doomsday scenario. Both companies are discovering ways to reinvent their business models. Done well, R&D’s real job is to notice what is changing early and help the company get ready before it’s obvious to everyone else.

Of course, this dynamic isn’t unique to R&D. Every leader has to choose whether to spend their days protecting the boundaries of their role or helping the company face the shifts that are coming. Even when the organization isn’t ready, they stay future-focused. They explore what might change, what could break, and what the company will need next. They make the future clearer before others are comfortable with it.

Because if they wait until everyone agrees, it’s already too late.