3 Tips for Keeping Your R&D Budget Healthy

The last five years have been uncertain and tough ones for federal research and development spending. In the wake of the Recovery Act and constant budget battles, many programs experienced cuts or at least flat spending. Only in the last year have things been looking at all better. No matter what the macro trends are, there are a few things any program can do to improve their odds of shoring up or increasing their budget.

1. Stay focused. The best federal R&D programs stay focused on what they are good at and avoid building far-flung empires. Knowing what you are good at and sticking to it is one of the hardest lessons a leader can learn. There’s a great story Walter Isaacson documented about Steve Jobs telling the new CEO of Nike: “Nike makes some of the best products in the world. Products that you lust after. But you also make a lot of crap. Just get rid of the crappy stuff and focus on the good stuff.” There’s always the temptation to extend the empire but don’t build your castles on sand.
2. Link your investments to clear customer needs and/or required capabilities. How many times have you funded somebody’s pet project without a clear story and connection to how that investment might make a real difference in a customer’s world? It’s true that some customers can’t envision future requirements so you can’t limit yourself solely to articulated requirements in R&D. There are techniques like scenario planning and others to overcome that obstacle. Just make sure you can identify the capability you are seeking to create and know how it will make a significant impact. That story is an essential part of maintaining your budget. Without it, key decision-makers (i.e., Congress, the Office of Management and Budget) will move your resources to an area that can tell that story.
3. Understand the trends and drivers. Your world is going to get disrupted so just expect it. What you funded five years ago might be irrelevant now. You can’t predict the future, but you can keep an eye on where things are going in your mission area. Your stakeholders are going to want to know how your investments account for the latest buzzword or trend. You need to figure out how to stay focused (see Tip No. 1) while having a story about the disrupters in your environment.

Keeping a federal R&D budget healthy is a challenge these days. Government leaders need to stay focused and tell better stories about how they are impacting customer needs and staying relevant with the trends driving change in their world. What do you think federal R&D managers need to do to shore up their budgets?

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