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Working across Time Horizons – Part 2

June 19th, 2012 · 1 Comment

To think beyond, it becomes important to have two key resources: money and a team. Money needs to be invested in product development that will not give returns for the immediate future, and hence could be a drag on margins. The way to look at this is as an R&D budget that does not impact EBIDTA. In this case, it is important to differentiate between incremental product enhancement features that continues as normal business, and the genuine breakthrough product development that becomes part of R&D.

A separate team needs to be created to look at new products. It will be hard to take existing team members and have them double as working on both the needs for the next month and for the next year.  The now and urgent will always take precedence, and little new development will happen.

Making bets on the future is always difficult, but these have to be done to create new avenues for growth. At some point, the revenue streams of today will start to slow down. If there is no new set of products, then the company will have difficulties maintaining its momentum.

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