Just as there is little doubt that technology and innovation fuel the success of IndustryWeek's Best-Managed Companies, it is evident that few leverage R&D in the same way. For example, Dell Computer Corp., when compared with IBM Corp. or General Electric Co., has effectively outsourced many of its R&D activities by essentially being an assembler of components from its suppliers. In contrast, both IBM and GE continue to benefit from huge investments in a strategy based on corporate R&D facilities. According to IBM's Nicholas M. Donofrio, senior vice president for technology: "The good that we do for our customers is because we understand information technology and the science and technology around it." IBM's R&D activities are the springboard for the company's multibillion-dollar initiatives in e-business, IT consulting, and microprocessor and storage technologies. In addition to launching new business, R&D also is used to evolve and protect core businesses-like continuing to make mainframes relevant. But some successful companies consciously focus R&D on competing more vigorously internally rather than with competitors. Intel Inc. is an example of a firm that consciously supplants older innovations with new. Hewlett-Packard Co. is another. After all, if winners successfully compete with themselves, they remain winners.
