Research That Reinvents the Corporation Managing Professional Intellect: Making the Most of the Best Bharadwaj Raghuram William P Muehlbauer

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Research That Reinvents the CorporationManaging
Professional IntellectMaking the Most of the
Best Bharadwaj RaghuramWilliam P Muehlbauer
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Research That Reinvents the Corporation

• John Seely Brown
• (Former Chief Scientist of Xerox Corporation,
• Former director, Xerox PARC)
• Published in Jan-Feb 1991

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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

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The Most Important Invention

• Its the corporation
• Fumbling the future
• Pioneering research
• Redefine technology, innovation and research
• Whats the difference between invention and
  innovation?

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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

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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 ?

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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

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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)?

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Coproducing Innovation

• Research cant 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

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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

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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

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Innovating with the Customer

• The research departments 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

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Innovating with the Customer

• Express Project (Syntex)
• The Forms Receptionist system
• Envisioning lab Does it exist?
• Examples from other industries

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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

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How Xerox Redesigned Its Copiers

• Increasing complaints in early 1980s
• Make an idiot-proof machine
• Not really a machine failure
• Convincing the technology designers
• No more flip cards
• Display panel
• Dramatic change in results

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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.

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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.

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Managing Professional Intellect Making the Most
of the Best

• James Quinn, Philip Anderson, and Sydney
  Finkelstein
• Originally Published April, 1996

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Where we are going

• What is Professional Intellect?
• Developing Professional Intellect
• Leveraging Professional Intellect
• Inverting Organizations
• Creating Intellectual Webs

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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

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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)

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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

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What is Professional Intellect?

• Are there any other components of Professional
  Intellect?

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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

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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 100s for 1
• Four Seasons Hotel 50 for 1

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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.

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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

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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

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Developing Professional Intellect

• Agree or disagree with the 4 ideas?
• Is this happening today?

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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

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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

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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

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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

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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

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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

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Organize around intellect

• Is this common sense today?
• Would you like to add another common underlying
  principle?

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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

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Inverting Organizations
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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

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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

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Inverting Organizations

• Are companies doing this?
• Any examples?

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Creating Intellectual Webs

• Spiders 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

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Spiders Web
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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

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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

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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

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Creating Intellectual Webs

• Anyone have experience with these intellectual
  webs?
• Are they effective as they say they are?

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Thank You

• Questions?