Research That Reinvents the Corporation

Managing Professional Intellect:Making the Most of the Best

Bharadwaj RaghuramWilliam P Muehlbauer

Research That Reinvents the Corporation

John Seely Brown

(Former Chief Scientist of Xerox Corporation,Former director, Xerox PARC)

Published in Jan-Feb 1991

For the next 25 minutes or so… The Most Important Invention Technology Gets Out of the Way Harvesting Local Innovation Coproducing Innovation Innovating with the Customer PARC: Seedbed of the Computer Revolution How Xerox Redesigned Its Copiers

The Most Important Invention It’s the corporation Fumbling the future Pioneering research Redefine technology, innovation and research

What’s the difference between invention and innovation?

Technology Gets Out of the Way Research on new work practices is as

important as research on new products.

Beyond the view of technology as an artifact Disappearance of discrete information-

technology products The photocopier

Technology Gets Out of the Way Remote interactive communication Digital copying Mass customization Like “clay” Sell expertise rather then products

Can anybody think of how we had to adapt to a change in technology at work/school ?

Harvesting Local Innovation Innovation is everywhere; the problem is

learning from it.

No more the privileged activity of the research department

Design IS to support the way people really work

PARC anthropologists

Harvesting Local Innovation Lucy Suchman studies accounting clerks Ideas generated in the course of work are lost Customized user-system program Buttons (Cambridge lab, England) Story about tech-reps at Xerox

Any personal experience or information of local innovation getting lost (or not)?

Coproducing Innovation Research can’t just produce innovation; it

must “coproduce” it.

Research must co-produce new technologies and work practices by developing with partners throughout the organization a shared understanding of why these innovations are important

Coproducing Innovation Tech-rep training is an excellent example of

pioneering research How do you convey the significance of this

problem? Get people to experience the implications of a

new innovation Digital copying – “unfinished document”

Coproducing Innovation Portray not just technology but also

technology “in use”. “Conceptual envisioning environment”

An “envisioning lab” could simulate the impact of a new product before it is actually built

Innovating with the Customer The research department’s ultimate innovation

partner is the customer.

Coproducing products with customers Customization of technology Identify the “latent” needs Prototype a need or use before we prototype a

system

Innovating with the Customer Express Project (Syntex) The Forms Receptionist system Envisioning lab – Does it exist?

Examples from other industries

PARC: Seedbed of the Computer Revolution Created in 1970 by the then CEO C. Peter

McColough LAN for distributed computing Point and click editing using a mouse Smalltalk Xerox fumbled the future 1973 – Prototype of laser printing 1990 – several billion dollar business at PARC

How Xerox Redesigned Its Copiers Increasing complaints in early 1980’s Make an “idiot-proof” machine Not really a machine failure Convincing the technology designers No more flip cards Display panel Dramatic change in results

From the Letter of John Seely Brown to Young Researcher Applicants “Trust your intuition and know how to run

with them. Try to have a commitment to solve real problems because our focus is on technology in use.”

To Summarize… “The successful company of the future must

understand how people really work and how technology can help them work more effectively. It must know how to create an environment for continual innovation on the part of all employees. It must tap the latent needs of customers. It must use research to reinvent the corporation.”

Managing Professional Intellect – Making the Most of the Best

James Quinn, Philip Anderson, and Sydney Finkelstein

Originally Published April, 1996

Where we are going What is Professional Intellect? Developing Professional Intellect Leveraging Professional Intellect Inverting Organizations Creating Intellectual Webs

Overview “The success of a corporation lies more in its

intellectual and systems capabilities than its physical assets”

Interest in intellectual capital, creativity, innovation, and learning organizations.

Little attention to managing intellect which creates the most value in the new economy

What is Professional Intellect? Operates on four levels (increasing

importance) Cognitive Knowledge (Know-What) Advanced Skills (Know-How) Systems Understanding (Know-Why) Self-Motivating Creativity (Care-Why)

What is Professional Intellect? Training Focus of Companies

Basic skills rather than advanced and little or none on systems or creative

Perfection not Creativity Resistant Bureaucracy

What is Professional Intellect? Are there any other components of

Professional Intellect?

Developing Professional Intellect 4 ways to begin developing professional

intellect within a company Recruit the Best Force intensive early development Constantly increase professional challenges Evaluate and weed

Recruit the Best Few topflight professionals can make a

organization Want to work with the best Want to be on the frontier of advancement

Microsoft – 100’s for 1 Four Seasons Hotel – 50 for 1

Force Intensive Early Development Know – how developed from real world

problems Microsoft Teams

Experiences lead to know-why and care-why Ensuring growth through:

Constant heightened complexity, mentoring, rewards for performance, incentives to advance the discipline.

Constantly Increase Professional Challenges Leaders – demanding, visionary, intolerant to

under par effort, set goals high Motorola – Robert Galvin achieved six sigma

Either drop out or substitute higher personal standards

Push beyond book knowledge

Evaluate and Weed Professionals want to be evaluated by the top

of there field Important to have objective appraisal and

selective weeding Anderson Consulting – 10% make partner Microsoft – force out bottom 5% of performers

each year

Developing Professional Intellect Agree or disagree with the 4 ideas? Is this happening today?

Leverage Professional Intellect Past ways to create leverage

Employees work longer hours Add more associates

New ways to create leverage Through new technologies Management approaches

Leverage Professional Intellect Common underlying principles to create

leverage Boost professionals’ problem-solving abilities by

capturing knowledge in systems and software Overcome professionals’ reluctance to share

information Organize around intellect

Boost professionals’ problem-solving abilities by capturing knowledge in systems and software

Financial organizations Human experts and system software collect and analyze Advice distributed via software systems to retailers and

brokers who further customize information Leverage = value of knowledge * number of nodes using

it Know-why is increased at center, then incentive structures

create care-why

Overcome professionals’ reluctance to share information Intellectual assets increase in value with use Reach numerically then benefits grow

exponentially Due to feedback, amplification, and modification

Outside entities – customers, suppliers Once establish knowledge based competitive

edge, hard for other companies to catch-up

Overcome professionals’ reluctance to share information Difficulty to overcome natural reluctance

Competition between professionals Difficult to assign creditability to knowledge

Anderson Worldwide – ANet Electronic system connecting 85% of professional Post problems on electronic billboards Central location of indexed subjects, customer

references and resource files Incentives and cultural change were essential

Organize around intellect Traditional companies organized around

physical assets To leverage, need to organize around

intellectual assets Customized solutions to an endless stream of new

problems

Organize around intellect Is this common sense today? Would you like to add another common

underlying principle?

Inverting Organizations Organize so that intellect creates the most value

Often need to break away from traditional view of the center as the driving force

Supporting organization Distributes logistical, analytical, and administrative

support Does not give them orders Former line order becomes supportive structure and

become staff people

Inverting Organizations

Person 1 Person 1Person 1Person 1Person 1 Person 1Person 1Person 1

Person 1 Person 1Person 1

Person 1

Person 1 Person 1

Person 1

Individual Professionals

Support Staff

CEO

Inverting Organizations Nova Care – NovaNet

Frees therapists from administrative activities Captures the organizations systems knowledge – rules,

schedules, customer billing, etc … Captures information for therapists about costs, services,

techniques that work well, health care patterns Therapists can give orders to line organizations and make

decisions on patients care CEO refers to therapists as “my bosses”

Inverting Organizations Inverted organizations are effective when:

Experts embody most of the organizations’ knowledge Knowledge is customized at point of contact with

customer Software for Inverted Organizations

Rules enforcement Professional empowerment

New performance measurements and rewards system

Inverting Organizations Are companies doing this? Any examples?

Creating Intellectual Webs Spider’s web

Self-organizing Solve problems no one person or organization can

know the full dimensions, or issues within the problem

Form quickly, disbands quickly Can leverage knowledge capabilities by hundreds

of times

Spider’s Web

Person 1

Person 1

Person 1

Person 1

Person 1

Person 1

Person 1

Person 1

Person 1

Person 1

Person 1Person 1

Specialists

Client-relationship managers

Creating Intellectual Webs Strong promotional and compensation process

are essential Merrill Lynch – confidential peer reviews

What and how webs communicate is just as important as the knowledge individuals hold

Creating Intellectual Webs Shared interest, common values, and mutually

satisfactory solution is essential to leverage knowledge in these webs: Keep hierarchical relations ill defined Constantly update and reinforce project goals Involve clients and peers in performance

evaluations Provide both individual and team rewards for

participation

Creating Intellectual Webs Technology is also a key leverage factor

Allows for geographically diverse teams Software provides a common language

By providing data and allows for interactive sharing and problem solving

Keys to these systems: Networking, groupware, interactive software, and a

culture of and incentives for sharing

Creating Intellectual Webs Anyone have experience with these

intellectual webs? Are they effective as they say they are?

Thank You

Questions?