A Workflow for R&D Tax Incentive Projects
How we use an R&D Canvas and Upperstory for managing our R&D Tax Incentive projects
- We use an R&D Canvas to quickly design an R&D plan
- We then use Upperstory to manage it every week
Let’s get into it.
The Australian government’s R&D Tax Incentive is still one of the most outstandingly useful support options for Australian innovators.
Anyone that has participated in the program will know that there is some admin involved and this can be a frustrating translation process between actual work and how it needs to be expressed as an R&D project for the program.
Here are the problems I encounter.
Planning Procrastination and Clarity
When issued with a complex Word document from our accountant with “WRITE UP TO 4,000 CHARACTERS HERE” spread throughout it, I don’t know where to begin. I procrastinate. By the time I am done, I have lost the something of the project’s goals in translation.
When running the project, I struggle to stay connected with the Project Plan that is such an important part of the R&D Tax Incentive. There is an overhead in translating how my team translates activity/tasks to the R&D activities.
The Good News
The good news is, managing an innovation project is BETTER when done through an R&D framework. Integrating the R&D mindset into the operations of a project focusses the work without creating extra work.
Here’s what we do. You will still need to work with your accountant to understand what each component is and how to best address each one.
Design a Plan Using an R&D Canvas
First, we work as a team to develop an R&D Canvas, in the same way we would build a business model — using a canvas. This way we can see our main focus, across all activities, clearly. In the spirit of radical sharing, here is ours for Upperstory.
Here, we capture the big themes of the R&D Project Plan.
At the top:
- What are the OBJECTIVES of the project?
- What new NEW KNOWLEDGE do you need to acquire in order to be successful?
Smack in the middle:
- What is the CORE ACTIVITY that you will be doing to deliver on the objectives.
Surrounding the core:
- Are there SUPPORTING ACTIVITIES that will feed insight into the CORE ACTIVITY?
With all the information on one page, this keeps our team focused on what is important. It becomes a document that we can come back to and easily adjust as the project unfolds. It is much less likely to stay in the ‘bottom drawer’.
Run the Project Using Upperstory
Upperstory is a new app that we are developing, designed to support an evidence-based approach to innovation. As it happens, it works very well to manage an R&D Project without needing to translate tasks into new formats.
For each activity, create a GOAL in Upperstory
Inside each GOAL, design and run experiments to get your new knowledge
One of our Core Activities is to Create Recipes/Variables. For our project we will need to build a large dataset of variables that our machine learning systems can look at for patterns. We need to figure out what these variables are by building a series of ‘recipes’ that all of our users can use.
Each experiment begins with a HYPOTHESIS — an assumption that we think is true which we are going to test. Here is an example from our Create Recipes/Variables goal.
- Hypothesis: Strong evidence of product<>market fit is an indicator of success for startups.
- Test: Create a series of recipes for easy to run experiments that users can run to test product <> market fit. Encourage creation of Discovery Notes to build body of data. Build machine learning models and run offline tests. Use ‘supervised learning’ with human startup coaches to train the system.
- Expected Outcome: The system will be able to detect patterns as well as a human coach and trigger machine created suggestions.
This is an ever-growing list of experiments which we create as a team as we learn our new knowledge. Feel free to take Upperstory for a spin to try this for yourself.
Explicit Creation of New Knowledge
As a team, each time we collaborate on designing an experiment, observe what happens and decide pass/fail outcomes, we build our new knowledge deliberately and store it as a single source of truth. There is no mapping to another report and we become smarter as we work.
Easy Audit of R&D Process (for us and the tax office!)
If we want to look back on our discoveries or bring on new team members to quickly learn what we have discovered, Upperstory provides a quick source of information. As it happens this is also a great format for any tax office audit to show our R&D process.
Give it a try and let us know how it goes in the comments.