People working in New Product Development (NPD) or in R&D have a management problem. How do you hold people accountable for results when there is an immense amount of uncertainty about whether the project will ever work and, even if it does work, whether it will produce commercial results?
 

Take the Innovation display, which divides NPD/R&D projects into four types: Bread and Butter, Oysters, Pearls, and White Elephants. Management accountability differs dramatically among these segments.

Bread and Butter

These are projects which have a high probability of succeeding, but a relatively low value if successful – often product improvement or cost reduction type of applications. Essential to the near-term well-being of the company. Accountability for management of these projects can usually follow a common pattern i.e. does the project come in on time, within budget, and meet its stated goals?

Oysters

These are hard projects with a low probability of succeeding, but a high value if successful – often products or processes that will create new offerings to the company or revolutionize existing offerings. Essential to the long-term well-being of the company. Traditional accountability for management of these projects would lead to reduction in scope (value) of the project which would increase the probability that the project will come in on time, within budget, and meet its stated (reduced) goals, effectively becoming a

Bread and Butter project. If this is not possible, managers will flee from this type of project. A more effective type of accountability would encourage the manager to:

• Find out as early and inexpensively as possible if the project is going to fail (“fail early if you are going to fail”).
• Choose among alternatives that increase/decrease the scope/value of the project and its probability of success.
• Steer the project to meet (or enhance) the long-term strategic goals of the company.

Pearls

These are easy projects with large value – often Oysters that have come close to succeeding and may provide long-term benefits for the company. Bread and Butter type accountability works here, but care must be taken not to burden the project with unreasonable demands or expectations.

White Elephants

These are projects that are unlikely to succeed, and would not be worth much if they do succeed; low value expenditure of valuable resources, though sometimes mandated. Much like Oysters, accountability should emphasize “fail early if you are going to fail” and/or “try to improve the scope/value of the project”.

Source: http://smartorg.com/2012/01/valuepoint/

Source: http://smartorg.com/2012/01/valuepoint/