established business vs. innovation

Meltsner, Kenneth Kenneth.Meltsner@ca.com
Wed, 9 Jan 2002 16:26:52 -0500


Chuck,

"...Think GE/IBM/DuPont and the like. I'd suspect a lot of copy in the middle 
tier, less on the upper. Think Computer Associates and the like as just 
below critical mass or just dumb ..."

Having been at GE Research and Development, I have to disagree.  GE used to be a corporate innovator.  That changed during the Welch chairmanship.

They throttled the "R" part of their R&D, and the horizon for the "D" part became shorter and shorter.  The hybrid approach worked well (research and development, as well as central vs. product area) in the past, but company-wide support for it faded away during the late '80s and 90s.  

Around the R&D center, feeling (ca. 1993) was that the company had to support *some* research so it wouldn't be viewed as a financial services company with a few high tech appendages.  The biggest problem,IMHO, was an accounting approach that charged substantially more for staff at the central lab than for staff at the product divisions.  Next biggest problem was that several GE product areas simply did not want any sort of R&D overhead charges -- there's a limited amount of innovation that can be afforded in highly cost sensitive businesses like Motor.

Since Computer Associates is my current employer, I'd just as soon not comment in public on our R&D efforts, except to say that I wouldn't be here if the amount were zero, or if we were "dumb."

Ken Meltsner