Can You Get Better at Research?

It's pretty widely accepted that people's innate intelligence doesn't change much. Youth, health, and a positive environment can help people make better use of their brains, but they can't do much to make the brains significantly better — at least on the weight of the evidence so far.

But an organization's brains can change. A new measure — RQ — that I presented in my HBR article out this month allows you to assess your R&D effectiveness quite precisely. I applied this metric to a sample of 668 publicly traded firms that reported R&D budgets each year between 1994 and 2010. On average, these firms increased RQ by a pretty significant 5.8 points, from 95.3 in 2000 to 101.0 in 2010.

The bad news is these changes appear to be random. I plotted the RQs from both 2000 and 2010 on the attached chart. If change were systematic, we'd expect the points to form a clear diagonal from lower left to upper right. Instead, we get a relatively random distribution (click to see larger image):

I think, however, that this picture will change. It's an old saying that what gets measured gets managed. And until the RQ measure came along, there was no measure for R&D effectiveness that was closely linked to shareholder value. Now that we have such a measure, firms can start to work out what sorts of practices and capabilities are positively correlated with it. If firms start to use RQ actively, I'd expect to see a very different looking chart in 2010.

The first step in improving your RQ is to know it. If your company is traded in the U.S. and does R&D, you can look up its RQ using this tool. (You may find it useful to look up the RQs of your competitors or other prominent firms as well.)