Newsletter No. 2 - August 2001

As we enter the "Knowledge economy" it is useful to consider the lessons of those businesses that have gone before, and succeeded.

IBM was once a traditional deeply vertically integrated company, and so was its research division. However by, 1992, this formula was obsolete as IBM Research watched some of its breakthroughs fuel the rise of corporations such as Sun and Oracle, while IBM's own businesses languished.

Under dire threat, IBM's research division restructured based on the following principles.

Common Principles for successful organization and management of research

• Understanding the importance of internal and external research sources for ideas, and internal and external paths to market for research discoveries.
• The management of intellectual property, both to ensure access to external ideas as well as to profit from one's own IP.
• Changing the role of research staff from not just generating knowledge but facilitating and brokering it as well. Researchers and their managers must have direct experience with customer problems as they formulate future research agendas.

Thus one classic monolithic R&D organization transformed itself in exciting ways. While we aren't all IBM, the principles are simple and relevant.