Unlike the Chicken Littles of research and development, Xerox Corp.'s John Seely Brown doesn't waste time clucking about research budgets and government consortia. Instead, he argues that America's corporate R&D establishment needs a radically new mission, one that recognizes that breakthrough innovations aren't enough anymore.
"The most important invention that will come out of the corporate research lab in the future will be the corporation itself," Brown writes in the current issue of the Harvard Business Review. In essence, Brown insists that corporate R&D has to go far beyond simply creating new products and services for the organization to sell -- it also has to become both resource and a tool to enable other parts of the organization and their customers to become more productive.
Brown runs Xerox's Palo Alto Research Center (PARC), one of the more vibrant and exciting corporate labs in the world. Over the past 20 years, PARC has pioneered breakthrough technologies, from digital laser printing to local-area computer networks to the graphical user interfaces so popular on Apple's Macintosh computer and Microsoft's Windows software. (However, other companies proved more adept at commercializing these technologies than Xerox.)
Today, PARC is still defining the state of the art in such emerging fields as collaborative computing, computational linguistics and the ecology of large-scale computer systems.
To make sure that Xerox better capitalizes on its own creativity, the company is transforming its research and development focus. Xerox has hired anthropologists to explore how segments of the company create innovation. Researchers help various parts of the organization craft "expert systems" and other tools that help train employees (although Brown wishes that the company would do a better job of using its own technologies internally). Brown's article also describes PARC's use of video-based "unfinished documents" designed to get top management to grasp how new technologies may actually be used. These unfinished documents encourage top managers to suggest ideas.
The new R&D focus has already yielded results. The company now approaches the design of its copiers differently -- the design is more sensitive to how people behave, as opposed to what they say.
It's not that Xerox researchers aren't continually trying to craft breakthrough innovations. It's that Xerox as a company explicitly recognizes (from bitter corporate experience) that breakthrough innovations don't guarantee either organizational acceptance or market success. What's more, PARC is betting that, in the same way its researchers can redefine technology, it can also play a role in redefining the organization.
"As you expand the notion of what companies do, that brings along an expanding role for research," says Brown. "General Motors now realizes that its product is customer relations, and it is going to have to change its research infrastructure to support that."
On one level, that perspective creates a hornet's nest of internal political problems. Why should R&D have any better insight into boosting organizational productivity than marketing or human resources?
"I don't think that R&D has a corner on how to reshape companies," says Ralph Gomory, who ran the multibillion-dollar global research effort at International Business Machines Corp. before becoming president of the Sloan Foundation. "It's not clear to me why they have a special insight."
Indeed, the overwhelming majority of companies treat their R&D departments like "innovation factories" whose job is simply to turn out products and services that will profitably fill the marketing and sales pipelines. Top management seldom looks to R&D as an organizational resource and most R&D executives are too busy "managing innovation" and pleading for their budgets to question the status quo. Most R&D groups wouldn't be up to the task of amplifying the organization's abilities to learn and innovate.
So is it such a good idea for R&D to dramatically redefine its organizational role? Does Brown's view represent the best way for organizations to create, invent and manage their futures?
Who knows? What's important is that precisely when the pundits are reflexively calling for "more" and "better" R&D, someone who manages some of the most talented researchers in the world is challenging the very mission of what R&D should be. It's time to do some R&D on R&D -- and Brown's call for "Research That Reinvents the Corporation" (the title of the Harvard Business Review article) may finally force top managers to ask some painfully fundamental questions they should have asked long ago.
"I would question how willing companies are to step back and examine their own assumptions," says Brown. "There are so many changes going on -- both technologically and economically -- that we really need to consider altering the way we do classical technological research."
Of course, it's not yet clear just how successful Xerox will be with its new innovation infrastructure. Preliminary reports indicate that the company's huge Docutech high-tech digital printing facility is enjoying healthy sales in the teeth of this recession. The innovations in this product, which revolutionizes high-speed document publishing for corporations, reflects Xerox's broader R&D emphasis.
Xerox also is rumored to have a line of digital copiers on the way. Market success for Xerox will no doubt breed imitation and emulation -- just as companies like Hewlett-Packard Co., Digital Equipment Corp. and Apple Computer Inc. emulated Xerox years ago by creating little PARCs of their own.
It's not likely that the General Motors, General Electrics and Du Ponts of the world are going to dismantle and rebuild their own innovation infrastructures any time soon -- even though competition is forcing those companies to rationalize more carefully their R&D budgets every year. But it's clear that the status quo is changing.
Will R&D take the lead in enabling organizations to productively exploit those changes? Probably not. Should top management insist that R&D broaden its mission to generate innovations within the organization as well as for it? They had better.
Michael Schrage is a columnist for the Los Angeles Times.