Friday, March 7, 2008

"Reorg" of HP Labs

All day I’ve been trying to make sense of HP’s announcement Thursday that they’re reorganizing HP Labs. This is the official announcement:

HP today announced that it has sharpened the focus of its advanced research group, HP Labs, to address the most complex challenges facing technology customers in the next decade. ...

The redesign of HP Labs is intended to balance exploratory research with an entrepreneurial approach so breakthrough technology can be transferred more rapidly into commercial applications for customers.

HP Labs will pursue 20 to 30 large research projects – instead of the 150 smaller projects in the past – based on insight gained from newly expanded relationships with universities, partners, customers and venture capitalists.

At one level, it looks like a cut although there are pledges to keep up head count and funding. The 600 researchers are expected to focus on 23 areas instead of the 150 earlier projects; supposedly the priorities are being set by researchers.

CEO Mark Hurd was quoted as saying of the labs “It's one place where there is still R left in R&D.” Despite this, the press release and news accounts strongly suggest an increased emphasis on near-term results, and thus a shift from advanced research to applied research.

To me, one of the more interesting tidbits was a decision to embrace open innovation:

HP Labs has established an Open Innovation Office responsible for deepening HP Labs’ strategic collaborations with those in academia, government and the commercial sector. The office is designed to ensure joint research endeavors result in high-impact research that meets the scientific and business objectives of HP and its partners.

As part of this initiative, an Entrepreneur in Residence Program is being established to give venture capital investors and their portfolio companies early access to HP Labs research. In return, HP will receive insight into emerging market trends and potential business development opportunities.

HP’s interest in open innovation is personally gratifying, given my personal stake in the subject. And the idea of collaborating with academia, government and other firms seems like the right way to go about it.

Still, given all the HP mismanagement of the past 15 years, all we can do is wait and see. HP was once the shining exemplar for innovation excellence in the valley, and now (for better or worse) that mantle has passed to Google. So I’d like to think the new innovation strategy will increase effectiveness, but past results give reasons to be wary.

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