R&D Protection Mechanisms

R&D is a trusted partner to the rest of the corporation. Our trust is one of reliability: you can trust I will deliver on my promises; and my threats. It means “trust me to deliver sub blockbuster+ products on a continuous basis and blockbuster products discontinuously”; it means “trust me to vigorously retaliate against any insults to R&D.” This is an amoral trust.

This article lays out our threats. We will do whatever it takes to protect R&D. We design our threats to be tit-for-tat, that is, proportional to the insult. But we recognize that sometimes it takes a sturdy 2x4 to get the mule’s attention. We take advantage of every thrust and parry to sue for a peace that is even more advantageous for our future security. We don’t sit and wait passively for an insult. We actively probe and determine opponents’ intentions through reconnaissance and intelligence-gathering. We proactively send clear signals+ of our resolve for self-defense. This is a full-bodied defense that hopefully keeps both parties from arriving at the Nuclear Option.

We take our lessons from a host of teachers: Rhoads, Axelrod, Clausewitz (esp. Book 6 - Defense), McClung, Machiavelli (for a tongue-in-cheek take on the CEO as Machiavelli, see: What Would Machiavelli Do?), Morgenthau, Wilson and others. We import our protection mechanisms from political affairs, opposition research, military strategy, counter-intelligence, corporate espionage, the art of propaganda, literature, international affairs, risk management, economics, litigation (for a fascinating look at the use of Clausewitz battleground techniques in bankruptcy litigation, click here) and a host of other fields. Anything Goes+ is the mantra. The corporation will not be permitted to shirk on its promises to R&D. We will drag along the rest of the corporation forcibly if necessary to where they reap windfall+ profits, discontinuously, from our blockbuster products.

This is someone’s full-time job (e.g., the Office of Interventional Reprisals). We seek an expert in the politics of personal destruction. We seek the poster child for deviousness; his or her picture is prominent in the referenced Wikipedia articles. Successful protection needs to be personalized. We build a multi-layered strategy for our protection, but the threat of personal destruction, orchestrated by our expert, is always at its base. This office, obviously, is not located within nor ‘directly’ funded by corporate R&D.

We have three levels of response, autonomous, interventional and nuclear, in response to different levels of insult. Our response escalates and is proportional to the insult. Autonomous responses, our baseline protections, are outlined by Rhoads. They can be economic, contractual or structural. Interventional responses take autonomous responses and make them personal: direct negotiation, calls for dismissal, lawsuits, personal attacks, etc. The Nuclear response is the ultimate step. It triggers the wholesale End Game+ for franchise operations+, emptying out the R&D ‘pipeline’ of the corporation.

We treat insults on two dimensions: severity of the insult; and closeness of the insult to the core operations of the franchise. We must be very credible in our threats, so we respond to all insults, even those merely signaled or intended. We protect our fringes, knowing that insults to the fringes often presage insults to the core.

There are further features of our response that perhaps are not evident in the high level diagram. We seek ratcheted responses. Our protection mechanisms are designed to allow many small incremental responses to an insult. We respond proportionally, but incrementally. We give the miscreant the opportunity to ‘save face’, to back off from the insult, and to effect reparations. Lest the incremental response be misinterpreted as a sign of weakness we clearly signal we are at Step 1 of 4, etc. as we execute the response.

Proportional retaliation does not end the battle. You attack with a 4.3 on the Richter Scale and we respond with a 4.3 on the Richter Scale. But we seek restitution in a formal agreement. We want reparations and we want an agreement for even greater protections against further insults. It’s clear that existing protections weren’t enough to stop you. When the opponent blinks we use that moment to further strengthen our defensive positions. Our retaliations continue (i.e., 4.4 on the Richter Scale, 4.5, etc.) until we see that blink.

People do bad or dumb things precipitously. We need to be much better at recognizing the signs of incipient action: to prevent insults before they happen. We find excuses to get involved in corporate affairs; we monitor the actions of other companies; our financial experts comb corporate forecasts looking for pending insults to R&D (i.e., hording of funds, cash shortages). What strategy consulting firms are being retained? What legal firms or investment banks are being consulted? In the event of a major corporate strategic move, the last thing on the CEO’s mind will be R&D. All the R&D protections in the world won’t stop a multi-billion dollar Wall Street transaction. But if we have billion dollar protections in place (i.e., holding hostage that next blockbuster R&D product) at least R&D will suffer an improved outcome, even if it’s an afterthought.


Home Page August 2010