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of technology that we can and should count on getting from outside—either [from] university research or outside companies, but there are also some areas where we need to, or have an opportunity to, create new technology ourselves.” (Memo, p. 5, also see Slide 2)
What is Research? (Thoughts on the Research Continuum)
“One of the key distinctions which has to be made is the difference between doing advanced development, product development and research. Many companies confuse these issues to their detriment. We believe that Microsoft needs to have a full spectrum of development.” (Memo, p. 5, Slides 3-4)
Great Failures Don’t Mean Research Is a Bad Idea
“There are many examples of good research which does not benefit the company involved, often to extreme proportions,” Myhrvold wrote. “Xerox is an example of a company that did the right stuff at the right time with the right vision, and still lost. They invented the GUI [graphical user interface], and yet it never did Xerox any good.”
But, he cautioned, “research is no different than any other corporate activity—there will always be some spectacular failures. Every aspect of business is mismanaged by somebody, and it is not at all surprising that research is among them. When people focus on the question of ‘why doesn’t corporate research work?’, and use examples like those mentioned above, they are almost always overlooking the fact that you could equally ‘prove’ that finance, marketing, advertising etc don’t work either.” (Memo, p. 7, Slide 5)
Deliverables of Research
Myhrvold identified three key advantages that research can provide a company: a time advantage in introducing new products and technologies; better access to strategic technology; and knowledge and intellectual property for the company.
“You shouldn’t start research in an area unless there is a strong chance of getting a unique edge in one of these three ways.” (Memo, p. 9)
The Technology Transfer Problem
“Once you have created some great technology, there remains the problem of effectively transferring it to the development organization. Failure to do this effectively is a primary reason that research work is ineffective at many companies.”
Myhrvold identified four imperatives or guidelines for overcoming this challenge (Memo, p. 12, Slides 6, 8):
High level strategic support is vital
Selecting the right research agenda is more than half the battle
Proper program management keeps the agenda relevant
Communication with product groups is essential
Why Research Should Be Centralized and How It Should Be Structured and Funded
Myhrvold noted that others had argued that research expertise should be distributed throughout a company, but he argued for a central lab for four reasons (Memo, pp. 13-19):
The best researchers won’t come to work in a product group
You can’t create the right atmosphere for research in such business groups
Synergy between researchers would be impossible to attain
Product groups are not equipped to incorporate researchers working on different time horizons and with different goals than the rest of their staff.
Draft Research Agenda
Myhrvold laid out a draft research agenda which was pretty spot on for the next five years—and longer.
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Bob is Xconomy's founder and chairman. You can email him at email@example.com.