From creation myth to the reality of innovation today

On the surface, Malcolm Gladwell’s latest article for The New Yorker, “Creation Myth: Xerox PARC, Apple, and the truth about innovation“, is a story about the mouse and how inventions travel – and evolve – across time and place. But examined more deeply, the article is really about the factors that determine whether you end up with an invention or an innovation.

Simply put: “invention” is the manifestation of an idea or creation of something new. It doesn’t become an “innovation” until it’s applied successfully in practice – i.e., it reaches the market and impacts people’s lives.

The story of PARC – and for that matter, any other innovative company – is indeed a mix of hopeful inventions, world-changing innovations, and missed opportunities, as Gladwell observes. We agree with many of the key points illustrated by the anecdotes and quotes in his article.

But there’s more – in contrast to his thesis that there’s a clean split between invention and innovation, and that companies are structurally limited in their innovation opportunities – we believe that there is now a framework that allows companies to innovate beyond their comfort zones and existing infrastructures. It’s called open innovation.

On the challenges of invention and innovation

But first, we want to highlight some of the key points that really resonated in Gladwell’s article, along with our observations based on PARC’s experience from being in the business of innovation today:

1. Adding limits or constraints can actually create more – and better – innovations. As Gladwell observes, Apple wanted to build a popular vs. a personal computer. So Steve Jobs pushed his designer by adding constraints to the mouse such as low price and high reliability. We’ve found that you don’t have to “turn the &*^%$;# tap” of creativity off – but you can focus the tap by imposing constraints (in our case, these often come from our clients reflecting their product or service strategy). These constraints motivate creative ideas that reduce complexity, improve user experience, and help reach the target price – whether it’s a $15, $300, $3000, or $16000 prototype.

2. Success requires failure. There are all sorts of pithy sayings about this out there – and not surprisingly, they’re true! Since the number of successful ideas that emerge is a function of the volume of failed ones, you need both a learning-based culture and a portfolio of innovation investments to help manage return vs. risk.

3. Operational management often values the cost of a “shovel” over the possibility of a “gold mine”. That’s because it’s easy to quantify a known cost (i.e., a shovel), but hard to agree on the value of a risky future possibility (i.e., a gold mine). But sometimes you have to trust the intuition of your experts and then continually test your assumptions along the way. [One strategy we use at PARC is a real options approach, which meters investments over time based on assessing probabilities of success as we learn new information. This approach is much better than net present value for evaluating the cost – and potential return – from an R&D project.]

4. Inventive creativity can’t be measured by spreadsheets. Yet if one wants to move the outputs of such creativity from invention to innovation, projects do need to be managed for different types of technical, market, and execution risks over time.

5. Thinking inside the box for years (e.g., lasers) is crucial to thinking outside the box when opportunity arises (e.g., laser printing). Especially when that opportunity arises from combining deep expertise from multiple disciplines (e.g., lasers + printing) to address a novel problem (e.g., the need for remote printing without requiring physical contact). Only then does chance favor the prepared expert mind.

A note on the popular story of the mouse

Speaking of the “expert mind”… There’s a nuance that’s often forgotten in popular retellings of the story of the mouse.

As Gladwell describes, Doug Engelbart‘s pioneering work on the mouse at SRI inspired the researchers at Xerox PARC, who connected it to their PC with the goal of making computing personal (vs. mainframe) and accessible (vs. command-line interface). The really interesting revelation, however, is why the Xerox PARC researchers chose the mouse.

Because in reality, they had multiple pointing devices to choose from.

Here’s what happened: Xerox PARC scientist Stuart Card examined how easily a person could hit a given target (in this case, moving a cursor to manipulate the GUI) by applying a then little-known model of human movement called Fitts’ Law. What he found: the mouse as pointing device was almost as effective as if using one’s hand. This finding not only led to the adoption of the mouse, but helped develop the field of human-computer interaction.

Good ideas usually go through a series of refinements as they encounter people with different perspectives and objectives, but there’s something valuable – and magical – about the expert mind that can connect and see possibilities across disciplines.

Now, on to finishing where Gladwell left off.

The missing piece: Open innovation

If Steve Jobs came to PARC today, there would be a much better understanding of his goals, our goals, and what we would want to accomplish – together – through open innovation.

Because that’s what’s different: open innovation provides a framework for these conversations and interactions. Through the pioneering work of Henry Chesbrough and others, there is now widespread awareness and practice of Open Innovation as a means for companies to leverage inventions and innovations from external parties. This can range from simply licensing IP (from or to others) and relying on outside organizations to help you see what’s possible, to co-developing and leveraging someone else’s investment to be tailored to your needs.

Simply put, open innovation institutionalizes and provides an alternative model for the uncharted do-we-or-don’t-we-let-him-in? model of a few decades ago. And why not? Drawing on one another’s strengths is a great way to not only reduce risk, but realize new opportunities, faster.

Instead of each party viewing “the problem from a different perspective” and carving off “a different piece of the puzzle” (as Gladwell notes), within an open innovation framework, each party can combine their perspectives and share the results of realizing the whole puzzle. That’s what we do today.

You can read Malcolm Gladwell’s May 16 article for The New Yorker, “Creation Myth”, here. Besides Gladwell’s take, many articles have been written about Xerox PARC and/or the Steve Jobs visit story; you can check out some of these here (Institute for the Future), here (Oxford Journals’ Industrial and Corporate Change), and here (Michael Hiltzik, L.A. Times – he also wrote the seminal book on the topic, Dealers of Lightning, which is cited by all of these articles).

We’d love to hear your reactions – or lessons learned about invention vs. innovation – in the comments below. We look forward to engaging with you!

— Sonal Chokshi, Lawrence Lee, Peter Pirolli

33 thoughts on “From creation myth to the reality of innovation today

  1. Pingback: The Problem with Fitting New Ideas Into Old Business Models | Innovation Leadership Network - Tim Kastelle

  2. Tim Kastelle

    Nice post! I’m really glad that you bring in the open innovation angle. Coincidentally, I wrote a post on this article today too, and that was something that I wanted to bring up. I agree that this is the missing element in The New Yorker story, and also that it is one very sound strategy for working around this problem.

  3. Michael Josefowicz

    An under appreciated fact about the original PARC Jobs exchange is that Xerox purchased 100,000 shares of Apple in exchange for “opening the kimono”. Those shares were later sold by someone in corporate… Puts a very different spin on the common wisdom of “how could Xerox PARC just give that away?”

  4. Ralph-Christian Ohr

    Excellent post! I like the distinction between invention = manifested idea and innovation = idea that reaches the market and impacts people’s lives.

    Further, I concur with your listed challenges, ranging from stimulating constraints to combining existing knowledge to get ‘out of the box’. As Tim Kastelle mentioned too before, open innovation is a crucial part to be added. It definitely provides a framework to increase likelihood for inventions to reach innovation.

    I also think, combining diverse perspectives and strengths – on a corporate as well as individual level – turns out to become increasingly vital in order to leverage innovation.

  5. Teresa Amabile, Harvard Business School

    Great follow-up to Gladwell’s article! I’d like to highlight 2 points from this post:

    (1) Open Innovation can be an excellent solution but, like within-firm innovation, that too requires trust, good-faith collaboration, and non-defensive consideration of new ideas.

    (2) Yes! “Thinking inside the box for years (e.g., lasers) is crucial to thinking outside the box when opportunity arises (e.g., laser printing).” This is the expertise component of creativity, too often overlooked as mundane.

  6. Ashwin Ram

    Nice post. A key factor in “open” driving innovation is the diversity of the ecosystem. It is difficult for a single entity to create the broad diversity needed within its four walls—not just technical diversity but liberal arts, humanities, design thinking, and a broad range of perspectives that facilitate out-of-the-box thinking.

  7. Colin McKay

    To me, the best workplaces find a way to encourage risk-taking and experimentation across the organization. The best places to work are those that recognize research is “a mix of hopeful inventions, world-changing innovations, and missed opportunities.”

    And that world is a lot more fun, as well.

  8. Innovation, a story told by patent applications | The Decision Tree - Brian Mossop

    […] And in a strange way, the chronology of patent filings in the years following the now-historic meeting compliments the personality difference Gladwell paints between first movers and fast followers. … As Gladwell says in his story, it’s difficult for a company to be both a true innovator and one that can readily bring consumer products to market. And as the patents show, Xerox PARC and Apple weren’t adversaries, because it seems they were never competing for the same prize. […]

  9. Pingback: PARC Responds – Apple and the Truth About Innovation | Blogging Innovation

  10. Michael Powers

    I worked at Xerox (Rochester and PARC as an assistant) from 1986-1993. I think the reason why Xerox did not build up many new businesses around around Ethernet and desktop computers (inventions with the promise of a “paperless office”) is because they leased copiers and made 90% of their revenue from paper and toner sales.

    If you look at any business that fails to expand into major new arenas that are invented internally, I think you’ll find the “cash cow” is the hindrance…

    UPDATE: Related to my “cash cow” point, the laser printer was adopted because it was familiar to the overall business interests inside Xerox; it was another machine that required paper and toner. Desktop workstations and Ethernet appeared to go the other direction, making documents and document-sharing a purely digital act and that was not picked up by the business (at large) inside Xerox. Only much later was there a realization that a larger document ecosystem with multiple laser printers at the end points would generate more paper usage…

  11. PARC Editor (Sonal Chokshi)

    As Gladwell notes, “the fair question is whether Xerox, through its research arm in Palo Alto, found a better way to be Xerox — and the answer is that it did, although that story doesn’t get told nearly as often. … Gary Starkweather’s laser printer made billions for Xerox. It paid for every other single project at Xerox PARC, many times over.”

    But to your point about the seemingly conflicting goals of core (the cash cow) vs. disruptive innovation (the next cash cow) — we try to address it in our post on portfolio management, and in our talk on Managing Disruptive Innovation (“we want to invent the next killer app”) at the Front End of Innovation.

  12. Pingback: Innovation vs Invention, Gladwell vs PARC

  13. gregorylent

    A left-right horizontal view of innovation/invention…institutional vs. individual…ok… But: there is a vertical, or higher, dimensional view that recognizes insight comes from consciousness. Vertical systems eliminate the left-right, and its attendant entropies.

  14. Jeremy Yuille

    Following up from a conversation on Twitter about this, I’ll make a comment on why I agreed with Krystal Higgins that point #1 was the most liberating. Caveat – I’m a designer… so this is through that lens:

    To me, all the subsequent points in this article are a product of (a not too liberal interpretation of) the first point. Let me explain:

    Adding constraints requires a few decisions: the nature of the constraints for starters (even if they’re defined at “random”, they’re still defined). It begins to frame the problem, or get to — as Donald Schön says — the “problem of the problem”.

    IMVHO, once you can do this well — particularly at the institutional level — then a lot of the other elements in this list become, if not direct by-products, then at least a lot easier to implement.

    WRT open innovation: one view of it can be to run a reframe like this on the mission of business — when you look at the original open innovation ideas re: permeability, etc., it seems to fit a more ecological model of how business can operate — leading me to think a lot of things like interdependency, networks, and sustainability…

  15. Henry Chesbrough, Executive Director of Program in Open Innovation

    This is a great response, and a great thread of comments as well.

    My book on Open Innovation (HBS Press, 2003) was strongly influenced by my research at Xerox and at its PARC facility. In particular, I studied 35 projects that originated within PARC and then were cut off from additional internal funding, but allowed to go outside for resources to continue.

    What I found was a pattern consistent with the argument of Michael Powers above: Xerox did a good job of commercializing inventions from PARC and other labs when those inventions fit within its then-dominant business model of leasing copiers and printers. However, many of the inventions in the 35 projects required a different kind of business model to become economically viable companies. Most did not succeed in finding such a business model. But 10 of the 35 did succeed, and their combined market value exceeded that of Xerox itself! [You can find the details about this in Chapter 1 and Chapter 4 of the book.]

  16. Lawrence Lee, PARC

    Thanks, Henry — you especially raise a great point about the connection between technology and business model innovation. Many new technologies are expensive and require a new business model in order to drive adoption before achieving economies of scale or network effects. [Xerox for example creatively offered leasing as a way to make copiers more affordable; as you noted, it became their dominant business model.]

    PARC today often works with clients who want us to help them with innovation to create new revenue streams. While we typically deliver enabling technologies, we’ve learned that we have to think holistically — about user needs/experience (through ethnographic studies and opportunity discovery) AND new business models — with our clients in order to develop innovations that will have impact.

  17. Pingback: A tour around “first church of technology” PARC (the innovative lab that started a ton in tech) | Scobleizer - Robert Scoble

  18. Clive Boulton

    Gandhian Innovation – do more, with less, for more – feels like the emerging innovation framework. Open Innovation sounds great, yet the partnership formality put in place to protect IP may be at odds with gaining practitioner feedback. For example, would PARC even let a new Steve Jobs in today to meet with engineering researchers? Perhaps PARC could open up some projects, so that more, with less, can do more…

  19. PARC Editor (Sonal Chokshi)

    Hi Clive, Having shared parameters in place can actually free the discussions so people *open* up more…

    RE: opening up project — One important initiative we are working on with clients and others is content-centric networking (for which we are also working with collaborators under an NSF grant for Future Internet Architectures). We support an open source project CCNx, which you can check out at [PARC and Xerox learned years ago from experiences making Ethernet a reality that openness is essential for changing the world of networking and other areas.]

  20. Pingback: links for 2011-05-19 | Headshift - Lee Bryant

  21. Malcolm Gladwell Discovers That Innovation And Invention Are Not The Same | Techdirt - Mike Masnick

    […] It’s interesting to see that the modern day PARC has responded to the story directly, pointing to some key “lessons learned” that are demonstrated by the article, and with some additional background…The PARC blog also talks up the importance of “open innovation,” and sharing ideas outside of a company, recognizing (frequently) that others may be better able to take an idea and run with it by creating something really powerful on top of that.[…]

  22. Pingback: innovation that lays the golden eggs | Marketoonist - Tom Fishburne

  23. Dwayne Spradlin, CEO of InnoCentive

    This blog post raises some very fair points, some in distinction to those proffered by Gladwell in the New Yorker article. But overall it also could be interpreted as an apologist position in defense of deep expertise. No surprise, given PARC’s past, and highly qualified collection of researchers and employees. As crowd-solving methods evolve they ARE an actual threat to the role of experts as premier problem solvers. That is not to say that we see no role for experts; we consider them absolutely crucial to either invention or innovation but perhaps not in their traditional role as THE problem solvers. I’ll wrap up my comments on that theme.

    We readily accept the distinction Gladwell poses between invention and innovation. They are simply practicable definitions and too much nuancing of the words seems like time that could be better used. And, of course, we loudly second the authors’ argument that open innovation opens the door to new structural and organizational options enabling a more effective translation of invention to innovation. YES! Since others have made this argument so effectively, I will stop at agreement here.

    But let’s look more closely at the issue with the eminence of experts:

  24. First, the observation that constraints somehow improve creativity. It’s hard to imagine a thought experiment where less is really somehow more — that the RELAXING of constraints doesn’t lead to GREATER diversity of solutions and options, including all those where the constraints are met along with those where they are not. But we don’t argue with the empirical observation. It seems to us that the insertion of constraints has an effect in breaking the problem-solving process out of its routine practice. And it is no more “routine” than in instances where experts practice the skills in which they’ve been effectively indoctrinated. Constraint refocuses the expert mind on something lateral to the problem at hand, whether it be cost, speed, or fun. THIS lateral shift IS the source of the creativity enhancement, not the constraint itself. In crowd-solving approaches, the lateral shift occurs by engaging the non-experts (at least not in the specific discipline of the challenge per se), never biased by a “proper” approach to a given problem and hence introducing lateral thinking whether the constraints are inserted or not.
  25. Success requires failure is asserted as a truth. OK, it is. But the real question for commercial innovation is how is that failure risk managed, how is it minimized, and who pays for it. Crowd-solving fails in parallel and in some cases where the financial risk of failure is shifted to the population solving the challenge. This is made possible because risk is not symmetrical. That is, the amount of risk offloaded by one party may be considerably greater than the amount of risk the other party assumes. In the incubation phase of InnoCentive, some pointed out that the assumption of risk by the solver community was unsustainable. The solvers, collectively, would not, and could not, continue to experiment at their own risk, especially not on behalf of a well-funded and successful commercial entity. At some point, economic speculation goes, it had to all balance out and you couldn’t get any more risk-taking out the system than was commensurate with the return that was available; it didn’t really matter who the participants were, internal or external. But the asymmetry of risk, fueled by non-cash utilities, effectively obviates this concern and allows a network to assume more risk than the expected return would predict. [This was clearly articulated during a meeting regarding crowd-solving that involved Professor Tom Wandless at Stanford University. Professor Wandless was asked if he might, under any circumstances, be willing to participate in a problem posted for crowd-solving. His response was that he had grave doubts about whether he would ever even consider altering his research endeavors in response to a posted challenge. But, he then added that one of his ongoing research interests was the design of new synthetic routes to dehydroamino acids. He said that if one of the posted challenges needed such an effort, he might be willing to “put their compound in my table”. By this he meant that he would consider adding an example to a table of examples in the work he was already doing. Clearly a company looking for innovation in preparing a dehydroamino acid could and should share that risk with Professor Wandless.]
  26. The third and fourth points we endorse with little comment; it is true that “Operational management often values the cost of a “shovel” over the possibility of a “gold mine”” and that “Inventive creativity can’t be measured by spreadsheets.”
  27. Finally, we reserve our greatest reservation for the observation that: “Thinking inside the box for years (e.g., lasers) is crucial to thinking outside the box when opportunity arises (e.g., laser printing).” That has NOT been our experience. We most frequently find that the problems and challenges posted on InnoCentive are NOT solved by those who have been steeping in the arena of the problems “box” for years. (Not always, just usually). Rather, in our book, “The Open Innovation Marketplace,” we align with Kuhn, McLaughlin, and Lakhani arguing that those on the periphery or even in only distantly related fields of expertise frequently deliver the most robust and novel solutions. We would replace the phrase “…chance favor(s) the prepared expert mind” with “chance favors the uniquely prepared mind” and that the unique quality of preparation may often lie outside the domain of what is classified as expertise. We aren’t arguing that French Lit majors are solving problems in particle physics and vice-versa, but that in a blinded selection process, the solution most often selected does NOT originate with someone likely to be defined as an “expert in the field.” Our position is supported by over 600 examples of crowd-sourced solved problems.
  28. But let’s now return to the role that we feel IS the domain of experts. Only they have a deep understanding of the nature of the problem, the pivot points that would be crucial to breakthrough. In other words, let’s refocus their attention from problem-solving to question-asking. They KNOW the questions. AND, when skilled in a commercial setting, they know how to evaluate and integrate solutions into broad innovation agendas and how to translate a breakthrough into a commercialize products. That expertise is difficult to outsource to a crowd, while the problem-solving is much easier. In our view, this fact is central to the concluding assertion of the authors, that open innovation is the “missing piece” enabling greater overall creativity and innovation productivity. That is an outcome in the interest of all researchers, consumers and taxpayers, “expert” or not.

    Hope I/ we provoke more discussion!

    Best regards,
    Dwayne Spradlin, CEO, InnoCentive & Founder, Alph Bingham

  29. Lawrence Lee & Pete Pirolli, PARC

    Thanks, Dwayne, for the nice build – and provocation!

    We agree that choosing domain experts to generate solutions within their domain of expertise is not as likely to generate creative inventions as great as those that come “from the periphery”. Indeed, we were arguing that people in domains (e.g., lasers) outside the domains of the problem (e.g., printing) are more likely to see creative opportunities if they have true expertise. Our argument was for the need to exploit both individual expertise and collective diversity to maximize the potential for creativity. [There’s plenty of research suggesting that those who “broker” ideas from one area to another are more likely to be the sources of good ideas, and this implies that a healthy dose of diversity in the collection of people attacking the problem is important. PARC’s social computing research team has done some theoretical work in this area — for example, Social Information Foraging — that explicitly tries to address these phenomena (this also builds on the social network work theories of R.S. Burt and the computational studies of cooperative problem solvers by former PARC scientists Bernardo Huberman and Tad Hogg).]

    What we were implying was that brokering ideas “from the periphery”  — say from lasers to printing, or from African art to Cubism — becomes increasingly likely with expertise… and especially for those who gain expertise in “mashing up” ideas across domains. At PARC, we try to create conditions that stimulate broad perspectives to generate creative ideas informed by expertise. First, we look to hire those rare people who are both experts and broad thinkers, who are curious and knowledgeable in many fields in addition to being deep in one. Then we surround them with such people across a wide range of scientific disciplines, and encourage them to collaborate both formally on projects and perhaps more importantly, informally through hallway and lunchtime conversations…

    By doing so, we may limit our range of innovation opportunities to primarily the areas that we know well. But that’s critical in the age of open innovation. You need to understand where you have world-class capabilities, and where you don’t. And in those areas where you are challenged, it’s nice to be able to leverage outside resources — whether it’s from expert partners or crowd platforms — to pursue new opportunities.

  30. Pingback: This Week In Brand Strategy & Marketing | PSFK

  31. Bill Jackson

    Hi Sonal and colleagues: Great piece! This discussion about innovation and creativity has been especially interesting to us at Scarsdale Public Schools as our efforts have been focused on developing critical and creative thinking. [Sonal, I left Paterson Public Schools and came to Scarsdale three years ago to help implement Singapore Math and lesson study to pursue this goal.] BTW, my dad was once president of Xerox and knows Gary Starkweather… Take Care, Bill Jackson

  32. Pingback: Invention or innovation | Strategyaudit

  33. Dorophone

    […] But the story of Apple and Xerox PARC is also that of a design philosophy meant to empower people diverging into one meant to entertain them or to sell them things. […]

  34. Pingback: A tour around “first church of technology” PARC (the innovative lab that started a ton in tech) | Scobleizer

  35. Pingback: Lean Startups para abrir o sucesso da inovação « Tecnologia e Impressão de Documentos

  36. Pingback: Quora

Comments are closed.