CM: What does R&D mean to you?
FERGUSON: It means different things in that we have a number of different flavors of R&D. We have, for instance, within each of our market units, a chunk of R&D that's performed in terms of understanding better where various industries are and where the industry is going and what their key concerns and issues are. So this is sort of a combination of economic outlook kind of research and opinion research in its substance. I think it's commonly associated with the kind of research that consulting firms perform, but we do a lot of it.
CM: We've been told that in consulting firms not all partners are committed to R&D and do not, perhaps, believe the dividends it pays are worth the trouble.
FERGUSON: I would say that it's an issue for consulting firms. No question about it. In our case, I would say it was a much greater issue for Andersen Consulting than it is now for Accenture. The firm's appetite for innovation has increased dramatically, and therefore the appreciation for inventions has increased dramatically.
CM: How has the role of R&D changed?
FERGUSON: In the old days, the fruits of research would primarily demonstrate to clients, number one, that we were looking at the future, that we had a good handle on the future, and therefore we were a good partner to work with in the present. We had really good ideas. We didn't have a lot of places to go after you'd made that point. … The mission back then was simply to create the business opportunity, not necessarily to do anything with it. The mission today is to do something with it, and in fact our CEO, Joe Forehand, likes to use the phrase "research for revenue."
CM: It is easier to make the case for R&D investment today?
FERGUSON: In the old days, it was very hard to sell (R&D). But we have so many more avenues to commercialize our ideas than we did before.
So in the old days, there was no Accenture Technology Ventures. There was no Game Change incubator. There was no network of business launch centers, and there was decidedly less interest and appetite in both our clients and our practitioners in this.
Now, we have all of those things, so if we have ideas, we find — we make business opportunities that are five years ahead of their time, and it is not too early to start thinking about acquiring some protection over those ideas, and shortly after that it is not too early to start building things that will end up in an incubator.
CM: Are there organizational models that R&D is more likely to flourish in?
FERGUSON: Personally, my opinion is that it's not an issue of the model. If you go to any corporate entity that has R&D and ask them if it's easy to defend or expand their R&D budget, they'll always say no. They're always under pressure. Yet, if you talk to them about
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