Innovation Management Watch Summary: “Demonstrate the ROI of R&D With Compelling Value Stories” by Gartner
Apr 08, 2025
The Gartner report, “Demonstrate the ROI of R&D With Compelling Value Stories,” addresses a critical challenge faced by today’s R&D leaders: how to effectively communicate the value of R&D investments in a way that resonates with executive stakeholders and drives strategic alignment. Rather than relying solely on traditional ROI metrics, the report advocates for a blended approach of data-backed storytelling and strategic metric alignment to highlight R&D’s contribution to business success.
Despite the centrality of R&D to innovation and competitive advantage, many organizations struggle to quantify its impact. A 2023 Gartner survey found that 35% of R&D teams do not use explicit ROI metrics, and 23% track only one — a reflection of how difficult it is to capture the long-term and intangible outcomes of R&D in a simple formula. The complexity is further heightened by the cross-functional nature of new product development, making it hard to isolate R&D’s specific role.
The report offers a three-part framework for overcoming this challenge:
- Identify R&D-Relevant Corporate Mandates
Rather than defaulting to generic performance metrics, R&D leaders should start by understanding the strategic goals of the business — such as revenue growth, cost savings, innovation leadership, or customer centricity. These goals should then be translated into R&D-specific objectives, ensuring the function focuses on high-impact areas.
Key tool: Gather “voice of the stakeholder” data to reveal what different departments expect from R&D, and tailor initiatives accordingly.
- Align R&D Metrics With Business Imperatives
Gartner emphasizes the importance of using multi-level metrics — from project and functional KPIs to enterprise-wide outcomes — to show how R&D supports strategic priorities. These metrics must be meaningful, outcome-focused, and resistant to gaming.
Examples include:
- Vitality index (new product revenue as % of total)
- Time to market
- Cost savings attributable to innovation
- Net Present Value (NPV) of the R&D portfolio
Metrics should reflect both short-term wins and long-term contributions, and be flexible enough to evolve with strategic shifts.
- Tell Compelling R&D Value Stories
Beyond data, the key to influencing stakeholders lies in narrative. Gartner encourages R&D leaders to craft value stories — structured accounts that combine metrics and qualitative insights to explain how R&D drives business value.
These stories should:
- Be tailored to the priorities of the audience (e.g., revenue, efficiency, risk)
- Use both quantitative metrics and contextual evidence
- Highlight how R&D helped deliver on core business goals
A strong value story transforms data into meaning, giving executives a clear, persuasive reason to invest in and trust R&D.
Example Value Story Frameworks
Gartner provides templates linking corporate goals to value stories and supporting metrics, such as:
- Goal: Increase revenue
Value Story: Strategic R&D investment lifted vitality index from 10% to 15%.
Metrics: Vitality index, NPV, product success rates
- Goal: Improve efficiency
Value Story: Process innovations improved throughput yield by 15%.
Metrics: Cost savings, scrap rate, design change count
Final Takeaway
R&D’s impact is too complex to be captured by a single metric — and too important to be overlooked. Gartner makes a compelling case for moving beyond spreadsheets and using storytelling to secure R&D’s place in the strategic conversation. By identifying high-impact mandates, selecting relevant metrics, and crafting stakeholder-specific value stories, R&D leaders can turn abstract innovation into measurable, meaningful business results.
To explore the full research and strategic tools, visit Gartner for R&D Leaders.
This summary is based on the original Gartner report. All rights to the original content remain with Gartner, Inc.
