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2 Research Restructuring and Assessment at IBM
Pages 7-19

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From page 7...
... An alternative is to consider who pays the bill and what their view of value is what do they think they are getting for this, what does the dual goal mean for them? Our budget is about a half a billion dollars a year, down about 20 percent over the last three or four years.
From page 8...
... Last year, we sold more than a billion dollars worth of our semiconductor products outside IBM. That, in itself, relates to quality; contact with the outside world helps ensure our competitiveness.
From page 9...
... In many cases, without our own patents we simply could not be in certain lines of business, because paying the royalties required would not leave us a decent economic model. Research produces about 30 percent of those patents, including many of the most valuable ones, such as the fundamental patent on the DRAM or the semiconductor laser, as well as patents in data storage technologies and reduced instruction set computer (RISC)
From page 10...
... Research is a natural entry point for the most talented technical people, and we consciously export people to the rest of the company. For example, we have a Ph.D.
From page 11...
... Let me give you another view of our evolution. When I joined IBM, there was a time when Tom Watson actually cut the research budget because research was doing things that were too practical.
From page 12...
... Arthur Andersen spends close to 10 percent of its revenue on research and development. When we think about our research agenda, we use a schema shown as five boxes in Figure 2.3.
From page 13...
... Research was the subject of a corporate audit during 1992. Ten IBM vice presidents visited for a couple of days and looked over everything.
From page 14...
... It affects my pay in a significant way. A subset of the projects presented in the one-page project descriptions include things that we agree on with our partners as part of this shared process, in which they give us a score at the end of the year.
From page 15...
... It is expected that Medicare expenditures for home health care alone could reach $30 billion a year by the year 2000, with most of these expenses relating to the cost of home nursing visits. Compared to the average home nursing visit cost of $1 0,000 per year, systems such as the one being developed in this project would provide much more efficient and costeffective supportfor patients at home than is cu rrently avai lable.
From page 16...
... DR. McGRODDY: The contribution and development plan evaluation has a couple of elements.
From page 17...
... . I COP · Contribution and Development Plan I Elements · Business Results · Professional Responsibilities · Individual Development · Living By Our Values Winning in the Marketplace Rapid and Effective Execution ~ Teamwork Coup/ecl to · Ranking · Annual Variable Pay 17 FIGURE 2.7 Contribution and development plan (CDP)
From page 18...
... It is fundamentally the responsibility of research organizations in industry to drive change in the company, to be the best in everything they do, including running your buildings operations, personnel, and everything else. Because financial performance can be a lagging indicator and it is the thing that everyone focuses on, change never happens fast enough in most companies.
From page 19...
... 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.


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