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Posted by Chip Gliedman on January 8, 2013
During the holiday break, I had the opportunity to spend a week on the beach in the Turks and Caicos islands (but that's another story). One of the books I brought with me and thoroughly enjoyed was The Idea Factory - Bell Labs and the Great Age of American Innovation, by Jon Gertner.
Back in the day when “network” meant “telephone,” AT&T either directly or indirectly controlled virtually the whole thing. Bell Laboratories served as the R&D arm of the organization, developing the equipment that Western Electric would produce for AT&T. In addition to the very practical work in things like insulators for cables (which are a big deal when the cable is running under the Atlantic Ocean), there was a small group who conducted the basic work that led to discoveries such as the transistor, practical lasers, charge coupled devices (CCDs), and information theory. Bell Labs built the first communication satellites – Telstar.
While it could be argued that AT&T did not reap all of the benefits possible from its inventions, the way that Bell Labs operated presents some useful lessons for organizations looking to improve their innovative capabilities:
- It truly does take an Innovation Network for sustained innovation. Researchers working on basic sciences would identify something potentially promising (Inventors). A proposal to fund further work on the idea and sort out the technical issues required to commercialize the invention would be made to management (Financiers). A team of pragmatic engineers would tackle the problem and deal with manufacturing, reliability, integration, and other issues (Transformers). All were done under the auspices of management that brought in the required resources when needed and guided the various teams towards the common goal (Brokers).
- Separation contributed to success. Although funded and a part of Western Electric and AT&T, Bell Labs was able to maintain autonomy of both staff and location. This allowed those chartered with innovating some separation from the day-to-day issues of running the network. Although the teams would be tasked to explore areas that management thought could help in the reliability or profitability of the network, they were free to pursue the next big thing.
- Money helps. The golden days of Bell Labs coincided with AT&T’s monopoly control of the phone network and the cash that it was able to generate. The ability to fund an organization the size and scale of Bell Labs is something that few companies today can afford. However, a steady funding stream appears to be a prerequisite for sustained innovation.
I do recommend this book – and not just for the lessons about innovation. This is the group that invented both information theory and the transistor in the same year, underlying both the “I” and the “T” of our IT world today. How all that came about is a story worth knowing.
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