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Monday, May 11, 2015

Corporate research strategy book chronicles my grandfather's work at DuPont

left, title page of Elmer Kraemer, 'Advances in Colloid Chemistry, Vo1ume 1' 1942; right, Volume 2, initiated by Elmer Kraemer and published after his death included his photo and a biography of his life

PHOTO: (click photo to enlarge) a copy of the book by Thomas Kraemer's grandfather, which was published after he died, is stored in the Oregon State University library, including an old index card that was used to check out the book before the process was computerized decades ago with barcodes: Elmer Otto Kraemer, Floyd Earl Bartell, Samuel Stephens Kistler, "Advances in colloid science, Volume 1," Interscience Publishers, 1942). (See previous posts Elmer Kraemer, chemist, nylon, synthetic rubber pioneer (10/18/09) and Hermann Staudinger on Kraemer 12/16/09) , plus the Elmer Kraemer (Wikipedia) article.)

I, after having spent decades managing advanced research for an large international corporation, and also as the grandson of Elmer Kraemer, a research chemist who led research work at DuPont that led to the invention of nylon, I especially enjoyed reading the book by David A. Hounshell John Kenly Smith, "Science and Corporate Strategy: Du Pont R and D, 1902-1980," Cambridge University Press, Oct 28, 1988:

"Based on voluminous corporate records and extensive interviews with key employees, Science and Corporate Strategy: Du Pont R and D, 1902-1980 provides a comprehensive, critical study of research and development in a large US corporation. Du Pont was among a handful of US corporations that established formal research and development laboratories at the turn of the century to improve competitive positions in their respective industries. Initially, Du Pont's executives viewed R&D as an important though not central part of the corporation's strategy. However the gains made by the company's laboratories soon demonstrated that R&D would be a critical ingredient in the firm's success. The industrial research and development laboratory became a major part of corporate structure; science became a central part of corporate strategy." (Quoted from David A. Hounshell John Kenly Smith, "Science and Corporate Strategy: Du Pont R and D, 1902-1980," Cambridge University Press, Oct 28, 1988)

It was not surprising to learn that the R & D challenges faced by my grandfather were similar to the ones I faced while managing an advanced R & D lab for Hewlett-Packard located on the Stanford University Palo Alto, California campus in the heart of Silicon Valley near San Francisco during the period shortly after Steve Wozniak had left HP to join Steve Jobs and cofound Apple computer. (See previous posts Woz on net neutrality and Apple watch apes 1977 Hewlett-Packard marketing strategy (3/26/15) and History of HP inkjet printers in American Heritage Invention & Technology (2/19/12))

In the 1970's and 1980's, HP generally invested ten percent of their revenue in R & D to invent new products in each business division. This investment would pay for projects that would last from several months to a few years before the project was expected to generate profits and revenue from the sale of a real product to customers. The company co-founders, Bill Hewlett and Dave Packard, recognized that this type of investing might be too shortsighted and so they decided to devote one percent of their revenues to advanced research that might not pay off for a longer period of time. For example, in the 1970's this type of research led to the invention of handheld computers, the inkjet printer and the RISC computer architecture that is still used today in every Apple iPhone processor -- unfortunately, HP's profitable commercialization of RISC was dwarfed by competing Motorola and Intel CPU chips that most computer manufacturers adopted because UNIX operating systems and Microsoft's OS code were written specifically for these architectures.

I recall spending countless hours with both HP company founders and flying around the world to learn from HP customers what type of advanced research programs might lead to a real customer solutions within five years, while also generating enough revenue to be profitable, versus the type of advanced academic research that could best be done by a Professor and his students in an academic institution, such as Stanford University. University research rarely pays off, but fundamental discoveries made by university research programs can pay off very big because they can obsolete or transform entire industries.

In fact, much of research I did in cooperation with Professors at Stanford, MIT and Berkley, as well as other major universities around the world, led me to learn how allergic academia is to doing any type of research that might be too commercially oriented instead of academic research aimed at fundamental discovery. This is why I laughed when I read about the nickname for my grandfather's research lab at DuPont, "Purity Hall," because it was an obvious derogatory slam by other parts of the company who viewed his research as too academic and not practical enough to make any money in a reasonable amount of time to pay for the investment. In fact, his work led to the invention of nylon and what DuPont is today.

If course, as it has proved to be true over many years at HP and many other companies, it is impossible to predict what will be the next big invention, such as the invention of inkjet printers that eventually became more than half of HP's revenue, while other parts of the company were eventually sold off, such as electronic instruments, or went out of business. (See previous post History of HP inkjet printers in American Heritage Invention & Technology (2/19/12))

I haven't received it yet, but I recently ordered a transcript of the oral history of "James Burton Nichols," accessed May 8, 2015, available for purchase via: Order Transcript bumber 0034 of "James Burton Nichols" oral history from Burton first worked with my grandfather as a graduate student, before joining him to work for the DuPont research labs. Nichols worked his entire career at DuPont before his oral history was taken, which includes several references to my grandfather. After I receive a copy of his oral history, I hope to post here my notes on what I learn.

Until I have a change to read Burton's transcript, here are some of my random notes and observations from reading the book by David A. Hounshell John Kenly Smith, "Science and Corporate Strategy: Du Pont R and D, 1902-1980," Cambridge University Press, Oct 28, 1988 with page number references to the book:

Also see previous posts My last supper is a Li'l Butterball Turkey and a Birthday Cake (11/26/14) and Sous-vide cooking method for steaks and eggs (4/24/13).