Abstract

IBM had one of the best research facilities in the world and employed world-class research scientists. Over the years, researchers at IBM Research developed a number of products that became the foundations of the IT Industry. However, IBM either failed to commercialize most of the innovations that came out of its labs or was late in marketing them. This led to a number of smaller companies growing big on IBM's innovations. In the 1980s and the early-1990s, IBM transformed itself under the leadership of CEO Louis Gerstner. The transformation involved comprehensive changes, prominent among which were the changes made in the research culture that facilitated faster technology transfer.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The relationship between research and product development in large technology companies
• The importance of culture in organizations and how it supports innovation
• The difference between invention and innovation
• The relationship between the two.

Keywords

Case, Innovation, IBM Research, Louis Gerstner, IBM Culture, Sam Palmisano, Database Management Systems, Microprocessor market, IBM Fellows, Deep Blue, Blue Gene, 'on-demand-computing', Xerox, Pacific Bell, PARC, Bell Laboratories