Platt Perspective on Business and Technology

Keeping innovation fresh – 3: Xerox PARC and Menlo Park, continued

Posted in strategy and planning by Timothy Platt on February 7, 2012

This is my third installment in a short series on serial innovation, and on keeping innovation and the unique value propositions that you offer fresh (see Part 1: everything was an innovation once and Part 2: Xerox PARC and Menlo Park.)

I started developing two case studies in parallel in Part 2 of this series, examining two innovation factories: Xerox PARC and Menlo Park in at least brief detail. Both were successful and even stunningly so in devising innovative new approaches and breakthrough technologies. Edison’s Menlo Park was very successful at turning its basic innovations into marketable products, and in bringing them to market. Xerox PARC was never quite able to do that, leaving development of their innovations to others – and with them and their parent company: Xerox loosing out on all of the revenue and profits that their innovations made possible. I ended Part 2 by posing a question that a lot of people in business have thought about:

What is it that made the early Xerox PARC innovations stillborn for them, and that made Edison’s Menlo Park innovations a success for them?

My goal in this posting is to address that question as a basis for discussing the innovation and implementation development cycle as a tightly integrated component of the overall business process cycle. And to jump ahead and begin with more of a conclusion, I would argue that:

• Xerox failed to develop and benefit from its innovation stream precisely because it was unable to close gaps and disconnects that divided its think tank Xerox PARC division from its commercial business.

Thomas Alva Edison was an inventor and visionary but he approached innovation from an intensely practical, marketable product-driven perspective. He innovated with an ongoing, consistent goal of finding new ways to meet specific market needs, and in both his own inventions and in the stream of innovation and inventions that came out of his industrial research lab at Menlo Park. All real evidence coming out of Menlo Park supports the contention that he was only interested in or supportive of innovative pursuits to the extent to which they could directly and immediately be converted into practical marketable, commercially viable products.

The early Xerox PARC research facility, by contrast, set out to explore new conceptual territory and without regard to immediate marketplace needs or opportunities. The scientists and engineers who worked there were encouraged to think big and to think beyond current marketplace needs or demands. This may have opened up Xerox PARC’s researchers to levels of opportunity for developing disruptive new technologies with great marketplace potential, and to a greater degree than Edison’s approach could have allowed. Concomitant with that, this system had to be and was tolerant of a higher level of acceptance of failure and both to achieve successful innovation to the level of proof of principle, and for innovations that met that test to translate into marketable products.

In principle, both approaches can be stunningly successful as fonts for new marketplaces and new commercial business opportunity. A more open approach of the type followed at Xerox PARC would in principle simply offset any losses from failed research efforts with profitability developed from its more commercially successful ventures. And in fact a Xerox PARC of that model could be considered a single venture capital source funded, in house startup incubator – if the researchers who worked there were thinking long-term of possible commercial value as well as abstractly in terms of solving technical and engineering problems.

Edison’s approach allowed for setbacks and failures, and for developmental dead ends where projects just did not and could not work with the state of the art technologies available to try developing them with. But success and failure were tracked and measured on a much shorter and more hands-on practical timeline than would later be possible for a Xerox PARC.

But perhaps the most telling point of distinction that could be drawn between the Xerox PARC and Menlo Park experiences was in how Xerox PARC operationally and communicationally connected with, and failed to connect with its parent organization. Xerox PARC was a think tank and a primarily basic research facility and any actionable innovation, ripe for development into an immediate product would have to have been successfully passed from there to Xerox and its product development system, and from there through marketing to the marketplace and real customers. My study of the history of Xerox PARC and of Xerox as a whole at that time indicates that there was a complete disconnect between Xerox PARC and Xerox’s product development and production facilities with essentially no real communication whatsoever between members of those teams – and certainly between their senior managers. That means there was no way available to break even the most immediately valuable and monetizable innovation out of Xerox PARC and convert it into marketable real-world products. And the failure to develop these innovations into Xerox products suddenly makes sense.

I am going to pick up on this story in my next series installment, there looking into some specific approaches that a research-supportive business can use to both give their researchers room to be creative, and opportunity to see their innovations turned into real products – and by their own company.

You can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.)

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  1. Tysons Engineer said, on May 9, 2012 at 9:15 pm

    I really enjoyed this series. Thank you for the research, I have been fascinated with the mechanisms which cultured think tanks and innovation workshops and this is a nice dichotomy you have investigated between the two different methodologies.

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