Research That Reinvents the Corporation
Managing Professional Intellect:
Making the Most of the Best
Bharadwaj Raghuram
William 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
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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 informationtechnology products
 The photocopier
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Technology Gets Out of the Way
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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
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Harvesting Local Innovation
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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
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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
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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
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PARC: Seedbed of the Computer
Revolution
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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
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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
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What is Professional Intellect?
Developing Professional Intellect
Leveraging Professional Intellect
Inverting Organizations
Creating Intellectual Webs
Overview
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“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)
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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
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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
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Recruit the Best
Force intensive early development
Constantly increase professional challenges
Evaluate and weed
Recruit the Best
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Few topflight professionals can make a
organization
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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
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Know – how developed from real world
problems
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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
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Leaders – demanding, visionary, intolerant to
under par effort, set goals high
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Motorola – Robert Galvin achieved six sigma
Either drop out or substitute higher personal
standards
Push beyond book knowledge
Evaluate and Weed
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Professionals want to be evaluated by the top
of there field
Important to have objective appraisal and
selective weeding
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Anderson Consulting – 10% make partner
Microsoft – force out bottom 5% of performers
each year
Developing Professional Intellect

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Agree or disagree with the 4 ideas?
Is this happening today?
Leverage Professional Intellect
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Past ways to create leverage
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Employees work longer hours
Add more associates
New ways to create leverage
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Through new technologies
Management approaches
Leverage Professional Intellect
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Common underlying principles to create
leverage
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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
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Financial organizations
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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
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Intellectual assets increase in value with use
Reach numerically then benefits grow
exponentially
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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
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Difficulty to overcome natural reluctance
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Competition between professionals
Difficult to assign creditability to knowledge
Anderson Worldwide – ANet
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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
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Traditional companies organized around
physical assets
To leverage, need to organize around
intellectual assets
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Customized solutions to an endless stream of new
problems
Organize around intellect
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Is this common sense today?
Would you like to add another common
underlying principle?
Inverting Organizations
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Organize so that intellect creates the most value
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Often need to break away from traditional view of the
center as the driving force
Supporting organization
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Distributes logistical, analytical, and administrative
support
Does not give them orders
Former line order becomes supportive structure and
become staff people
Inverting Organizations
Individual Professionals
Person 1
Person 1 Person 1 Person 1 Person 1
Person 1 Person 1 Person 1 Person 1
Support Staff
Person 1 Person 1
Person 1
Person 1
CEO
Person 1 Person 1
Inverting Organizations
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Nova Care – NovaNet
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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
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Inverted organizations are effective when:
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Software for Inverted Organizations
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Experts embody most of the organizations’ knowledge
Knowledge is customized at point of contact with
customer
Rules enforcement
Professional empowerment
New performance measurements and rewards system
Inverting Organizations
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Are companies doing this?
Any examples?
Creating Intellectual Webs
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Spider’s web
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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
Specialists
Client-relationship
managers
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Creating Intellectual Webs
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Strong promotional and compensation process
are essential
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Merrill Lynch – confidential peer reviews
What and how webs communicate is just as
important as the knowledge individuals hold
Creating Intellectual Webs
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Shared interest, common values, and mutually
satisfactory solution is essential to leverage
knowledge in these webs:
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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
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Technology is also a key leverage factor
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Allows for geographically diverse teams
Software provides a common language
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By providing data and allows for interactive sharing
and problem solving
Keys to these systems:
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Networking, groupware, interactive software, and a
culture of and incentives for sharing
Creating Intellectual Webs
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Anyone have experience with these
intellectual webs?
Are they effective as they say they are?
Thank You
Questions?