Research That Reinvents the Corporation Managing Professional Intellect: Bharadwaj Raghuram

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   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  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 ? 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  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)? 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     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    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   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 How Xerox Redesigned Its Copiers        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      What is Professional Intellect? Developing Professional Intellect Leveraging Professional Intellect Inverting Organizations Creating Intellectual Webs 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 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) 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 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     Recruit the Best Force intensive early development Constantly increase professional challenges Evaluate and weed 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 – 100’s for 1 Four Seasons Hotel – 50 for 1 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. 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 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 Developing Professional Intellect   Agree or disagree with the 4 ideas? Is this happening today? 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 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 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 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 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 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 Organize around intellect   Is this common sense today? Would you like to add another common underlying principle? 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 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  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” Inverting Organizations  Inverted organizations are effective when:    Software for Inverted Organizations    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   Are companies doing this? Any examples? Creating Intellectual Webs  Spider’s 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 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  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 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 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 Creating Intellectual Webs   Anyone have experience with these intellectual webs? Are they effective as they say they are? Thank You Questions?

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