DR. BLOCH: On a slightly different question, you are running one of the remaining central laboratories in the United States. What do you see as the future of the central laboratory—not yours, but the generic central laboratory—and how does it compare to what it was 20 or 30 years ago?

DR. McGRODDY: I do not think there is a generic answer. I already talked about the disconnection between the layers and the value chain. In a big company you start off with the disadvantage of some degrees of bigness—the bureaucracy and the slowness that goes with it—but the fact that you are operating all those pieces can be turned into a real advantage. One of the ways you make it a real advantage is by sharing along the way, by doing things that provide synergy between the layers; here, the different layers are usually different business units. Another thing we say internally and try to make true is that we have got to be part of the solution and not part of the problem. As a research organization you must focus on that and make the change before anybody tells you to.

DR. SANKEY: In your research process, you showed that you come up with an environment and strategy plan every year and out of this come focus items.

DR. McGRODDY: Those focus items are input.

DR. SANKEY: Well, right, an input to that plan, but presumably these focus items come from somewhere.

DR. McGRODDY: Me. It is my job to identify items that do not fit within the same existing paradigm. We are not working enough on systems management, for example. All product divisions say they are working on it, but we do not focus enough on the collective issue. We do not yet understand the impact of the Internet on our business. If it is just mixed in with all the other communications business, we will miss its significance.

DR. SANKEY: The question I had was, Does that stay constant? Is that changing on a year-to-year basis?

DR. McGRODDY: Every year, yes.

DR. SANKEY: In the basic research environment, a year is not really that long.

DR. McGRODDY: That is not an agenda. At this point, we are trying to lay out the backdrop against which we are going to make a plan, which is a resource investment. What is important, what is going on in the world, what is going to happen? In thinking about the Internet in a business sense, I have concluded that we are maybe a tenth of a percent of our way into that. We are at the very, very beginning by any reasonable measure. There was $20 million of commerce on the Internet last year. Twenty million dollars is not an interesting number, unless you are a university researcher.

It is that kind of thing we are trying to deal with. We are coming to a turn in the road; we have to be ready to go around it, and research must lead the way.



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