Renewing the Corporate R&D Laboratory

Abstract

In a world of exploding technology and imploding organizations, the oldest industrial research lab in the U.S. focuses on cost, performance, speed, and quality. OVERVIEW: How can a corporate-level RD corporate R&D people will have endless opportunities to be not only technically excellent, but also vital to the survival and prosperity of the company. How can a corporate-level R&D lab renew its role as a vital part of a winning business team? My answer is summed up in four words: cost, performance, speed, and quality. In the past, innovation often began with a performance breakthrough made at the corporate lab. The idea would be thrown over the wall to the design and engineering teams in the business operation. The designers and engineers in the business operation then took up the challenge of improving quality and reducing costs. The result was relatively slow development of often costly products that nevertheless might prove winners in the marketplace because they offered capabilities no competitor could match. That does not work today. Now the corporate lab must be part of the team that achieves low cost, high quality, high speed, and performance, simultaneously. What Has Changed Speed and cost used to be much less critical for the corporate lab. Eighty years ago, GE's William D. Coolidge could carry out a systematic development of the modern X-ray tube, confident that GE had a collection of relevant research skills that hardly anyone else in the world possessed. Even 20 years ago it still worked. When the British company EMI invented CAT scanning in 1970, GE was one of the few companies that could leap in and improve on that initial device. The Japanese companies, for example, did not have the capabilities in software and computer technology required. We thought we were pretty fast in those days. But we didn't really have the mindset needed for speed. And we certainly did not have the mindset needed for low cost. Usually, we didn't worry about cost at all the first time around, operating on the assumption that, If we build it, they will come. Often we spent years making the product truly manufacturable. That was a good way to win in the 1970s. But it won't work in the 1990s. It won't work because technology is exploding worldwide. Dozens of labs are at the forefront today whereas yesterday there might have been only one or two. Technology is almost a commodity. Leadership in performance is much harder to attain, and is sustainable only briefly. Today's challenge to corporate labs is to achieve low cost, high speed, world-class quality-and continue to stretch the boundaries of the technology performance, just as corporate labs did in the earlier, simpler days. The outcome can be both higher productivity and business growth. How do you get high performance, high speed and high quality simultaneously? The main tools are truly boundaryless cross-functional teams, planning for two or three product generations, exploiting synergy, designing up front for low cost, and reducing manufacturing variability. Eliminating Boundaries Eliminating boundaries is the most important tool. Everyone should be on a single innovation team--marketing, manufacturing, engineering, service, R&D, even vendors and customers. Whenever possible, these people should be located in the same place. …