I work in the telecommunications field a lot and the gold standard of corporate R&D labs has always been Bell Labs. These guys have created amazing things that we all take for granted today: transistors, fiber optics, etc.
Since most firms have no idea about what to do with their corporate research facilities, responsibility for the labs often falls under the control of the CIO (because most firms don’t know what to do with IT either). Great. So what’s a CIO to do when he/she is responsible for a corporate R&D lab?
The Times They Are A Changing
So why did companies set up their research labs in the first place? Simple, they needed a source of innovation that they could harness in order to become more successful. Unfortunately, the Internet came along and the wheels have fallen off this truck.
In the old days (the early 90’s), researchers used social networks to exchange information and drive their research forward. No, not Facebook or Twitter – we’re talking about the early 90’s here. They used the REAL social networks that formed when researchers went to conferences or met in the lunchroom.
The arrival of the Internet has turned this world upside down. If you can connect with anyone over the Internet, then why would you even bother to have a corporate R&D lab?
It turns out that there is still a reason for corporate R&D lab, it’s just that they are going to be much smaller and the value of even having an R&D lab will go down.
CIO’s And The New Era Of R&D
Steve Lohr over at the New York Times has been talking with folks in the corporate R&D world to find out what the future of R&D Labs is going to look like.
Pull the cover off an R&D lab and you’ll discover a machine that can turn ideas into products. In the future, the ideas that a business can turn into a product (which is what a business is in business to do) won’t come from a lab, instead they will be coming from all over. Wow, what a mess.
In the future companies aren’t going to be able to afford to have the old style R&D labs. These labs were paid for by corporate profits. Once again, that dang Internet thing has come along and leveled the playing field and those corporate profits are now under pressure from everywhere. Now that they are gone, there’s no way to pay for old-style R&D.
The new way (practiced by HP, GE, and IBM) is for CIOs to transform what a corporate R&D lab does. The new role for an R&D lab is for it to act as a communications hub between researchers who can all be located at remote locations.
The sources of new ideas can be universities, start-ups, other businesses, and even government labs. Researchers will have to start acting like human Googles and start sucking up all of the information that they need to create products that their firms can sell.
Final Thoughts
CIOs who find themselves in charge of a company’s R&D labs have a delicate challenge on their hands. No matter how successful the labs have been in the past, the past is the past and what worked then will no longer work. CIOs need to move aggressively to transform how R&D research is done.
Realizing the Internet changes everything, CIOs will have to create an R&D “hub and spoke” logical design where the corporate R&D team funnels communications between multiple parties in order to move innovation along. Ultimately, when enough information has been gathered to allow a product to be created, then a CIO will know that his / her R&D lab is doing what it needs to do.
My question to you is do you think that today’s CIOs have the skill that is need to pull this kind of R&D lab transformation off?
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What We’ll Be Talking About Next Time
Ok CIO wannabe, we’re right in the middle of a global financial crisis and your IT budget has gotten slashed so much it looks like Freddie Krueger has come back and had his way with it. What are you going to do about your spending on security programs: cut ’em, hold the line, or spend more. Whoops – that was a trick question: all of the answers will get you in trouble…