Page 33 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

20 grow from within

ingly depended on the application of science and technology.
Germany introduced the corporate research and development
(R&D) laboratory in the late 1800s. By the early twentieth cen-
tury, thousands of U.S. and European companies had set up
centralized R&D labs to drive innovation. During World War
II, large companies worked in partnership with government
laboratories and universities. On August 6, 1945, 16 hours after
the atomic attack on Hiroshima, Japan, President Harry S. Tru-
man made a public statement: “We have now won the battle of
the laboratories. . . . What has been done is the greatest achieve-
ment of organized science in history.”
Vannevar Bush captured the mood of the time in his 1945
report, Science: The Endless Frontier. The report promoted what
came to be known as the “linear model” of development, the
idea that investment in high-quality science would provide a
foundation for new technologies that could be turned into a
cornucopia of profitable products. But by the 1970s, many com-
panies had discovered that having the best science was insuf-
ficient. They needed better ways to create viable opportunities
based on what they were learning in their labs, and better ways
to realize economic value.
Some companies created separate organizations dedicated to
finding and developing opportunities that did not fit, or even
conflicted, with the products of existing divisions or that were
too long term for business units to pursue. However, protected
new business development teams often operated more like
enhanced, privileged versions of centralized R&D than like
truly alternative corporate innovation groups. Other companies
tried to emulate the flexible practices and culture of acknowl-
edged leaders such as 3M, but these attempts often failed, as
entrenched incentives and processes thwarted such flexibility.
By the 1980s, the competitive threat from Japanese and other
Asian manufacturers led many Western companies to scale