QUESTION $1[20$ MARKS$]$ In the $1990$s$,$ International Business Machines Corporation $($IBM$)$ was struggling. The rise of Silicon Valley as a hotbed of innovation had created a perception that everything innovative in the technology sector was created in small, high$-$growth companies. IBM, by contrast, was seen as oversized and decrepit. The company was finding it hard to attract talented computer scientists and salespeople, who were instead going to Silicon Valley. Reversing the perception that IBM was not an innovative company became a priority for senior management. IBM decided to build BlueGene, a supercomputer. High$-$performance computers were used by meteorologists, security and intelligence analysts, particle physicists and geneticists. But in their efforts to push the boundaries of their respective fields, they were constrained by the speed of the world$$s fastest computers. IBM believed that if it could meet this demand, it would be in a position to make a strong, symbolic statement about its prowess at innovation. Lou Gerstner, chief executive, understood the power of symbols. In $1997,$ for example, the company generated a lot of attention by creating Deep Blue, a machine that defeated Garry Kasparov, the reigning world chess champion. In $1999,$ when the company was more stable but still struggling to attract talent, the most exciting field of scientific inquiry was biotechnology. Scientists were close to completing a map of the whole human genome. Ambuj Goyal, head of computer science at IBM Research, led the project to create the first $$petaflop$$ computer. Computer speeds are measured in $$flops$,$ floating point operations per second. At the time, the world$$s fastest computers operated at speeds of about $1,000$bn flops. A petaflop was $1,000$ times faster than a teraflop. To create a new machine, however, IBM had to abandon the existing paradigm for how to design supercomputers. Traditionally, advances in computational power came through increases in processor speed and sophistication. But faster processors consumed more power. So$,$ the company decided it needed to build a supercomputer while at the same time reducing the speed and complexity of the microprocessors. This had never been done before. To tell the world whether the company$$s theory could be turned into reality was uncertain but Mr Gerstner and his PR team seized on the opportunity to make their ambition public. IBM held a press conference in November $1999$ to announce it would invest $$100$m over five yearsin a new machine, to be dubbed BlueGene. There was a shift in press coverage of the industry: a New York Times article, for example, declared that only an organisation of IBM$$s scale could assemble the expertise in computers, mathematics, biology, chemistry and physics to build such a machine. By September $2004,$ the company had surpassed its original ambition of creating the world$$s fastest computer: BlueGene was running with more than $8,000$ chips and just over $36$ teraflops. BlueGene did not break the petaflop barrier until $2007,$ but IBM was still able to get attention in $2004$ by publicising its ambition. IBM expected the investment to signal a redoubled commitment to research that would in turn help recruit the world$$s greatest minds $$ and it did. When asked about the project$$s return on investment, Mr Goyal responded: $$BlueGene has attracted a number of the world$$s most talented graduate students to IBM. What$$s the return on investment of that?$$

Case questions Many established companies made the mistake of ignoring the path breaking innovations that came out of their labs and consequently, lost major opportunities. With reference to IBM, a$.$Differentiate between invention and innovation? $(4$ marks$)$ b$.$What are the implications of inventing without innovating? $(6$ marks$)$ c$.$Examine the importance of culture in an organization and expound how it supports innovation. $(10$ marks$)$