THE SIM CITY computer game can be as instructive as it is addictive. Watching a series of annual cycles for a city that you have created will reveal the crucial importance of balanced investing. The city suffers when any single area, no matter how critical, is continually overemphasized.

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For CTOs, R&D is a critical balancing act. Last year's low priority R&D project can escalate into this year's hot button issue through inattention and procrastination. When lack of investment persists in any key area -- such as new technology development, for example -- then a chronic shortfall can sink the company.

The role of the CTO is to bring investment balance to your company. CTOs strive to achieve some measure of consensus from the organizational factions competing for their own share of the internal investment pool. In pulling together technology investments at Rockwell and Boeing over a number of years, I've managed to hold the dissatisfaction level down only by carving out some meaningful share for each and every business objective.

The CTO's balancing act begins by lobbying the management team to allocate the right level of internal spending, a level that balances current company profit with reinvestment in R&D to generate future profits. My business has had its ups and down, but even in lean times I've had to make a strong case for keeping future business in the investment pipeline.

To succeed in achieving this balance, the CTO needs a reputation as an honest broker who relies on objective, open-minded, and visible decision processes that neutralize the inevitable pockets of dissatisfaction. I had a hard time a few years ago getting sponsorship for fully optical data processing, for example, but now these photonic network architectures have achieved a critical mass level that represents a key competitive discriminator in our new space system developments. By making our system products simpler, cheaper, more reliable, and more powerful, I ended up improving my role in the corporate debate.

By striving to provide balance, CTOs will have to constantly weigh issues such as in-house vs. outside development, participating in industry collaborative efforts, and rearchitecting product development cycles. Finally, the pressures to deal with urgent issues must be balanced against the need to address problems that may be less pressing but ultimately are much more important to the survival and prosperity of the company.

I'll be addressing these balancing acts in a series of "Sim CTO" monthly CTO Adviser columns. In my first installment, I try to answer an important question about internal reinvestment -- how to tell your company their profits are too high.