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Oct

23

Innovation

By: admin
Filed Under: Uncategorized |

Innovation: Making a Business of Inventions

Smart managers understand that there’s a big difference between clever invention and successful innovation. My recent reading list included a few books and articles that shed light on the important distinction between invention and innovation. Below I review the history of Xerox, a native Rochester company, to underscore the important role good business sense plays in developing successful innovations.

A recent book Charles Ellis (2006) described how Joe Wilson created and grew Xerox. It is a classic tale. Chester Carlson invented the concept of xerography in 1937 and received his first patent three years later, but it was Wilson’s managerial expertise that transformed that invention into the flagship product of one of the most successful companies of the Seventies. After failing to generate any interest among companies to develop a xerography product, in 1942 Carlson teamed up with Battelle, and together they tried to sell the new device to dozens of companies, with no success. Finally, in 1946 Joe Wilson became aware of the new technology, and he recognized its potential. Through the fifties Wilson organized the company that was to become Xerox. He learned about xerography and gained the respect of technologists. He arranged for financing, entered into alliances with other companies, negotiated contracts, worked out labor agreements, built factories. He sold the product to military and commercial enterprises. The company grew steadily but at a modest pace. Joe Wilson encouraged members of his fledgling organization to contribute their ideas and expertise. A significant breakthrough occurred when John Glavin, the VP of Sales, devised a new five cents-per-copy pricing scheme. Sales took off and the rest, as they say, is history.

Joe Wilson successfully took a technical invention – xerography - down the long and difficult road to market, to a successful business based on an innovation known as the Xerox copier. Managers who followed him at Xerox, such as Peter McCullough, understood the need for new inventive technology but did not appreciate the skills required to transform clever inventions into valuable innovations. While the R&D facility in Webster NY worked to perfect xerography, McCullough established the Palo Alto Research Center (PARC) to do ground-breaking work on a great variety of information technologies. An interesting book by Michael Hiltzik (1999) tells the story of PARC’s many inventions: the world’s first laser computer printer in 1971, the Alto personal computer in 1973, a ground-breaking network system call Ethernet and, in 1975, the first demonstration of a graphical user interface with pop-up menus. And yet, most of those inventions were converted into innovations by people outside Xerox. James Clark founded Silicon Graphics. Steve Jobs incorporated PARC inventions into the Lisa an, Macintosh computers. Charles Simonyi took PARC inventions to Microsoft, and in 1981 IBM introduced the first commercially successful personal computer. Of PARC’s many wonderful inventions, the only major technology that Xerox successfully commercialized was Ethernet, in 1980.

In recent years, Xerox appears to have learned from its experiences. Geoff Colvin interviewed Sophie Vanderbroek, Xerox’s CTO, in the July 9 issue of Fortune. Vanderbroek describes the two elements of innovation as an “Ah Ha” moment and the “intrapreneurial” role of taking an idea through a value building chain until it becomes the “right product for the customer”. Today, the Xerox Innovation Group comes up with new ideas, then incubates them until a business group recognizes its potential value, makes an investment in it and finally partners with business-group engineers to carry it through manufacturing, marketing, sales and service.

My summer reading usually involves catching up with articles I missed during the year – such as Rosabeth Kanter’s piece last November in Harvard Business Review (2006). Kanter has been doing research on innovation for many years, and the article summarizes the strategic, operational, and structural mistakes that managers have made over the years when they underestimated the challenges that accompany the transformation of inventions into successful innovations. I recommend her article to anyone who wants to avoid falling into one of those “innovation traps.”

At RIT we have a technology- rich environment that supports invention very well. The Colleges of Science, Engineering, Information Systems and Applied Science and Technology have faculty and students working on state-of-the-art technology in world-class facilities. The College of Imaging Arts and Sciences has a superior program in Industrial Design. The Center for Integrated Manufacturing Systems is a world leader in remanufacturing tools and techniques. Throughout RIT, very clever people are busy creating very clever inventions. But just one college at the Institute specializes in converting inventions into financially successful innovations: the E. Phillip Saunders College of Business. Through classes, clubs, and one-on-one interaction with faculty, our students learn how to spot potentially useful inventions, assess market opportunities, work with designers and engineers to create viable products, securing financing, and build organizations and business alliances that are capable of building, selling and delivering new products and services on a continuous basis. In other words, we specialize in innovation - the business of recognizing opportunity and moving inventions through the global value chain to customers.

Comments

One Response to “Innovation”

Neil Hair on November 7th, 2007 2:46 pm

I am increasingly pleased with what I’m seeing in the college hallways - engineering students talking with business students talking with graphics students talking with photo students. This cross pollination of ideas can only benefit all of those around us and this wasn’t the case only a few years ago. It’s exactly what the area needs as well - highly skilled knowledge workers helping to transform the local economy who stay after completing their degrees.

We’re also doing our best to integrate local businesses within our daily college business. Many faculty use consultancy projects as part of class and that translates into a win win win situation. The local economy, the student who wants real world experience on their resume and the local client who needs the creative advice our students can provide. Its one of the best things in my mind about being a practical college that focuses as much on the application as it does on theory.

As an aside, James Dyson - inventor and innovator of the Dyson vacuum is in my opinion of the best recent examples of an entrepreneur that does both things well.