And I don't know what I'm doing...
Thu, 10 Jan 2002 10:03:30 -0500
Steve Spacil's observation: "By the time we build a lab for a new business opportunity, the opportunity will be gone."
He cited GE examples that included an alternative fuel research lab, an electronics systems manufacturing lab, and another one that I forgot. Each one was launched with a fanfare, only to be completed after the boom was over.
It's the fault of the "game changing" breakthrough search, I think. Unfocussed research to find the next big thing, regardless of its relevance to the current business units or the overall economic climate. It's a game that only big companies could play until recently -- some of the Internet bubble was related to this sort of thinking, I believe, except the VCs were managing a portfolio of companies rather than a single company managing a portfolio of projects.
A number of companies: GE, DuPont for certain, others as well I think, used to have the approach that research was best performed in order to find the "game changing" breakthrough. For DuPont it was Nylon and, later, Tyvek (after a lot of effort to find a use for it...). GE had similar breakthroughs, including malleable tungsten wire -- at one point an anti-trust suit against GE was dismissed because they legitimately controlled *all* of the relevant patents for light bulb manufacturing.
But breakthroughs are hard to plan. 60 years or so after Coolidge figured out how to make tungsten filament, they were still making it the old-fashioned way. They hadn't even changed the wood used for the paddles that mixed up the tungsten powder. And the R&D folks had come up with a string of innovations that were mishandled or unappreciated by the GE business units. Welch fixed a lot of this with a ball-peen hammer: a new funding scheme (so that R&D had to get its money from the business units directly). I was a peon at the time of the big change -- freshly minted PhDs don't really understand what's going on. But by the time that I was asked to leave five years later, the message was clear:
* Sponsored research was the only worthwhile research
* Spend your "exploratory" funds to get more sponsored research
* If it didn't fit at an existing business unit, don't bother
You can still do a lot of good work in this sort of environment. But as several of the top guys told me, (roughly) "If I had wanted to spend my time hunting for funding, I would have gone to a university." And, in fact, a number of the best ones did just that.