Posted by: Chris | 15/10/2009

Do a Company’s Research Efforts Impact its Brand Value?

Recently the University St. Gallen completed a study where they looked at the perceived value that a research organization contributes to a company’s brand equity or reputation. The hypothesis was that if you are well known for your research efforts, it should have a positive effort on the overall brand value. The findings were released at an event on 22 September called “Brand it or Lose it.”  and the project was conducted by the Institute of Technology Management at the University of St.Gallen , its innovation and intellectual property spin-off BGW AG, and IBM Research.

Being part of IBM Research, I found this project of course very interesting, because if we could come with a concrete (preferably large) $ value that our research efforts contributed to our brand’s value then we would have another justification that investing in research was a good idea 🙂 and it could perhaps encourage more organizations to invest in R&D.

Well, it turns out the question could not be answered as concretely as I had hoped by citing specific data, but some positive effect on the brands’ value could be shown.

What was more interesting to me, however, was that the study also compared the various research labs of our competitors and other industrial companies that operate in Europe.  St. Gallen asked all of the labs to rank themselves and others in various disciplines (e.g., material science, physics, computer science, information theory etc.).  They were also given the opportunity to name other labs that were not on the list.

It turns out that our small Zurich laboratory came out # 1 when compared with industrial labs and # 3 in another study where they had also compared government sponsored research entities – we came in a close 3rd after the multi-billion € funded and well-respected German Fraunhofer Gesellschaft (#1) and Max Planck (#2) government labs.

This result made me think, how does one maintain this level of peer recognition? What does it mean to be the best? How can we assure to remain in that coveted first place in another five or ten years when some other business school studies a similar question.

I would claim, we need to be famous for the innovations not only within our company, but also outside. This applies to how we do research, what we work on, and how we turn our research into innovations for the world. It all starts with hiring the most talented people, of course.

We also need to make a difference in the world where it would be felt if we were not around. We need to be so unique that we cannot easily be replaced by somebody else.  I recall an inspirational pitch by a senior executive in the early 90s when IBM was on the brink of total failure titled “Where would the world be without IBM?” and he listed numerous achievements, including landing on the moon and PCs,  that may not have been accomplished without  IBM.

CHALLENGE: You just became lab director of the #1 corporate research lab in Europe, what would you do to keep it that way?  Let me know your thoughts.

Credit: St. Gallen, Wolf-Christian Rumsch, ITEM-HSG, CTI Dissemination Conference, IBM Research GmbH, Rüschlikon, September/22/2009

Credit: St. Gallen, Wolf-Christian Rumsch, ITEM-HSG, CTI Dissemination Conference, IBM Research GmbH, Rüschlikon, September/22/2009

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  1. […] Do a Company’s Research Efforts Impact its Brand Value? « A day in the life as the director of IB… ibmzrl.wordpress.com/2009/10/15/do-a-companys-research-efforts-impact-its-brand-value – view page – cached Recently the University St. Gallen completed a study where they looked at the perceived value that a research organization contributes to a company’s brand equity or reputation. The hypothesis was… (Read more)Recently the University St. Gallen completed a study where they looked at the perceived value that a research organization contributes to a company’s brand equity or reputation. The hypothesis was that if you are well known for your research efforts, it should have a positive effort on the overall brand value. The findings were released at an event on 22 September called “Brand it or Lose it.” and the project was conducted by the Institute of Technology Management at the University of St.Gallen , its innovation and intellectual property spin-off BGW AG, and IBM Research. (Read less) — From the page […]

  2. Hello from Russia!
    Can I quote a post in your blog with the link to you?

  3. One thing I would do is I’d start an employee-based bonus program. Bonuses can be great incentives, however, too often they lead to jealousy and resentments. Furthermore, some individuals who make subtle, yet consistent, contributions frequently go without recognition. The employee-based bonuses would overcome these pitfalls. Each month a randomly selected committee of a few individuals would determine the criteria for the next month’s bonus. Each employee would have one anonymous vote for an individual that excels for the given criteria. On a regular date (e.g. at the end of lunch time on the last Friday of the month) the bonus check and a certificate would be awarded, the runner-up would be recognized, the new criteria for the next month would be announced by the current committee, and a celebration cake would be shared by all.

    This program would offer several benefits:
    1. Bonuses would be fairly awarded to deserving individuals.
    2. It would tend to promote unification of the lab as the random selection of the committee will bring together individuals that otherwise might not get to know each other, and it may lead to better understandings of the goals and problems that are experienced by other groups.
    3. The monthly award could be a fun gathering that becomes a valuable tradition.
    4. Everyone will tend to think more about what is important for the lab, and take more notice of what others contribute.
    5. Individuals will appreciate having their contributions noticed by others.
    6. Everyone will be empowered by gaining the authority to contribute to these important decisions.
    7. Valuable insights into inner workings of the lab may materialize by taking notice of the criteria that are selected.

    • Dear Prof. Climer thank you very much for this suggestion.

      I find this a very interesting idea to pursue and will discuss it with my team and see whether we can implement it and in what form.

  4. To follow-up on Prof. Climer’s point:

    Using incentives, such as a bonus, to improve effectiveness of outcome is trickier than one thinks — especially in the creative space.

    Dan Pink illustrated this nicely in his recent TED talk:

  5. I see that the comments drifted more towards employees. My grain of salt here is not trying to think that engineers function like managers. A business man can grow just by working longer hours. The longer they work the more they learn. We engineers are a whole different story. For those of us wanting to grow, we are overwhelmed of all the information we must digest. We need time for our private research, self-training, broaden our skills, maybe joining a technical society and also, just like artists, study and admire the work of other engineers. We programmers count with open source software. It provides us with invaluable lessons of how great engineers work.

    IBM is one of the top contributors of open-source. I have no doubt that is giving value to IBM, your programmers are dealing with the work of thousand of talented engineers around the world and from other companies. It is just not possible not to become better engineers with this social interaction.

    If you ever find the time (and know something about programming), I recommend to you the lecture a book from Gerald Weinberg: The Psychology Of Computer Programming. It applies to other engineering fields and not many people write about it (something more recent might be Peopleware). I found several anecdotes from managers failing to understand engineers.

    Managers are more of an aggressive nature more concerned about prestige and money. We engineers value more some detachment for creativity but also good integration with other engineers. There are several publications from IBM dealing with the importance of comport for engineers, and it is a great value. A big company with important research projects will attract great engineers. With a focus on the right points you increase their productivity. The funny thing is that many are ready to sacrifice some part of our salary if we can work in a place were we are understood.

  6. IBM research is recognized as the major resource in computer simulation in my field (atomistic ab initio and molecular simulation). Recently, visiting an open innovation day at IBM research, I realized that you’re not only challenging your staff for in-house projects, but also with contract research for other major industries in Switzerland.
    This makes you to a most valuable candidate to join or support our platform (see link), where we try to promote all existing industrial services for computer simulations in Switzerland.
    I kindly invite you to leave your brand mark in our platform. This would demonstrate that we attempt completeness within Swiss industries.
    Best regards
    Lukas Schuler


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