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[virtually transcluded from Perspectives on Business Innovation #8 (2002); restored from the WebArchive]

Still Waiting for the Revolution: A Conversation with Alan Kay

Alan Kay’s biggest fault may be that he has always been a visionary—in the truest sense of the word. More than 30 years ago, he invented the concept of the personal computer, even coining the term to describe it. But he soon discovered that even great ideas don’t always meet marketplace success. As one of the founders of the Xerox Palo Alto Research Center (PARC), Alan faced a number of challenges as he tried to introduce new computing ideas to executives at Xerox. It wasn’t easy to explain the creation of an entire industry when executives at Xerox asked him what the PC “did.” From the Ethernet to the laser printer to client-server computing to the Arpanet (the beta version of the Internet), Alan Kay played a part in developing the most significant computing innovations in history. Yet, as Alan discovered, innovations—and all great innovators—are often ahead of their time. It was Steve Jobs who eventually borrowed Alan’s idea for the personal computer and later called it the Macintosh. Then Bill Gates’ iteration became Windows. While considered progress in the eyes of the consumer, what has happened in the computing industry has been more like a slow evolution than the revolution that Alan Kay dreamed of.

Perspectives on Business Innovation editor Kate Kane sat down with Alan and talked to him about where great innovations come from, why the mass market often resists innovation, and what advice he has for businesses to overcome their fear of change.

Q: Is an innovation only an innovation if it reaches commercialization?

A: Innovation actually requires that people don’t accept it. We all like our own ideas, but you can’t have science with one scientist. You need to be in a community of people who are constantly challenging your ideas and looking to debug models. So all of these skeptical processes are going on with an innovation. The physical world is the ultimate critic.

Q: When you’re working with a group of people and you’re onto something hot, something ahead of its time, something “innovative,” how much do you care whether it’s going to be accepted by the masses?

A: Down the road, there’s a lot of caring. But in the research phase, zero. Because this is art. The impulse to have a new point of view has to come from within. The urge is not to make something new just to have it, but to know how to make it—to understand the process for creating something new. But we are limited in our ability to understand something truly new, so our models will always be somewhat limited.

Q: What is the measure of success then for an innovation if it’s not about mass appeal or commercialization?

A: I think the first measure of innovation is whether it’s beautiful or not. You look at music—all the different styles and approaches that have been considered beautiful. Some are cultural and some are more universally accepted. But it’s the learning that goes on—educating people on how to appreciate something as beautiful. It’s complex and the metrics vary. Take mathematics—this discipline has been around for a long time. Most mathematicians now agree on the kinds of things considered to be beautiful in mathematics. And since science is expressed in mathematics, one of the things you’re trying to come up with in a scientific theory is whether the math that expresses this idea is beautiful in itself or whether or not it has anything to do with the physical world.

Q: So, in some ways, the idea of making something appeal to the physical world inhibits the innovator?

A: It does. On one hand, you’ve got the people who like nothing better than building castles in the air, which are generally mathematical in nature. Then you have the poor experimenters who are supposed to go out and see whether these castles actually have anything to offer in the real world.

Q: So maybe the answer is to find some balance between that kind of blue-sky thinking and practicality?

A: That’s right. When I was at Xerox PARC, we had a new programming idea. We were able to find a way of getting it to run efficiently by cooperating with some of the hardware designers to make machines that would run it, even though it wasn’t very efficient on standard hardware. And by doing just this, our little group of six or seven people all of a sudden became very powerful in being able to make real things on a computer that were new, and test them, throw them away, or keep them and build on them. It was much more efficient.

Q: What would a company that was following a scientific model of innovation look like?

A: Many companies have a weighted investment model, a portfoliolike investment. This is good. But typically, the riskier these endeavors are, the fewer resources are put into them. It is known that even though some things are very risky, you need to put resources behind them. Companies believe this as rhetoric, but it’s tricky to figure out how to allocate resources to such a venture. Companies are traditionally not comfortable funding people. They’re comfortable funding projects. So the resources are administered with corporate goals in mind rather than corporate vision. A vision is something that expresses a desirable state of affairs rather than a particular configuration of affairs. Basically, anyone willing to take money to work on the corporate goal is probably not the person you want to have spending money.

Q: Why is it so difficult for companies to adopt a scientific approach to innovation?

A: Well, for humans, we have a mechanism called culture. This is how we gradually discover ways of living in an environment. It becomes our common sense and is passed down through stories, generation to generation. It’s usually based more on a proverb than a model. Most cultures don’t have a strong notion of physical cause and effect. Look at American business. Almost every process they operate with is based on an old-style cultural process. So, they have none of the thinking skills that you learn through a scientific process. They don’t know about models. They don’t know that stories are a bad idea. They think goals are important.

Q: What is the best model you’ve seen in business for enabling innovation?

A: The model at Bell Labs, until the divestiture. The mission that was written up on the wall was: “Either Do Something Very Beautiful or Very Useful.” The company really wanted to turn this slogan into reality. When I was at Xerox, it did not do this—to them, innovation was just a word not a vision. That’s the difference. First of all, you need to fund the people, not the projects. You need both a dream and a vision without breaking the vision down into goals or missions. This, of course, is antithetical to business. Business rationale thinks problem solving is a good rubric and a metaphor for what they’re trying to do. Articulating goals actually stifles innovation.

Q: How does a company really put this into practice?

A: Any company should look at the Xerox PARC model and see that only 35 people, costing in today’s dollars, 10 or so million dollars, were enough to create trillions of dollars of wealth. Every large company has more than enough to afford PARC.

Q: Something tells me this is easier said than done.

A: That's because of “goal seepage”: It’s hard psychologically to let go of the control. But real innovators need freedom. They have an inner fire to do their thing no matter where they work. A lot of management theories are based on the idea that employees won’t be productive unless they toe the line. You have to take attendance and punch the clock and all that stuff.

Q: If you have found the right innovators and you want to enable them, what’s the best model?

A: You need to have two kinds of critical mass. One group that comes up with new ideas and another critical mass that acts as a coalition to float back and forth.

Q: Obviously, in order for an innovation to get any traction in an organization, you need executive buy-in. How did that work at PARC?

A: We would create a new technology and then give zillions of demos. But it was very difficult to sell them on a new idea without creating real anxiety.

Q: What would have helped make the situation easier? What do innovators need to get beyond this kind of corporate bureaucracy?

A: You really need a champion for your ideas. Someone influential in the company who can recognize a good idea and work it into the corporate process. At Apple, you had an unusual situation where the founder, Steve Jobs, was also the champion. That’s how they got things out the door and why Xerox did not.

Q: But surely the creation of Xerox PARC reflected the company’s desire to try to enable an innovative culture.

A: Yeah, but nobody at Xerox headquarters thought to ask themselves what would happen if everything that came out of PARC was successful. They didn’t really want us to be innovative. They really just wanted basic improvements on existing products— those things that they already understood. Like the railroads that didn’t realize they were in the transportation business and failed to invest in airlines and aircraft companies, Xerox didn’t realize that it was in the office business. It failed to understand that personal computing was going to revolutionize the offices of the future. From our standpoint, we thought this was the simplest slam dunk of all time. Xerox already had salespeople and maintenance people in every office in the U.S. So it had the perfect infrastructure—much better than IBM—for creating a new industry.

Q: Why was this so difficult for Xerox?

A: Xerox was essentially a one-product company. This hurt the chances of running with something new. Even Apple had problems where it was narrowing itself down to just selling and marketing the Mac. Whereas a company like Sony, or 3M, one where there are many thousands of products in the works at any one time has an easier time of accepting and enabling innovations. The latter has a completely different attitude because it doesn’t link its identity to any single product. This allows them to be more nimble.

Q: But there’s more to the story than just setting up a research center with a bunch of smart thinkers. How does an idea get pushed through the process?

A: When I worked at Disney, the person who came up with the idea was required to be the champion of the idea. This was a disaster. Sometimes, the person who thought up the idea was a fantastic salesman. And these ideas were the ones that actually got built. But sometimes the person who thought up the great idea didn’t have the right personality to sell it. A company needs to have a process in place for handing off the ideas to someone else who can see them through the process. There are lots of people who are good in the lab but don’t care what other people think. They do it for their own satisfaction.

Q: OK, so on the one hand you’ve got the group that’s coming up with tomorrow’s great innovations and another group that wields all the control and power. They need each other. How do you reconcile this?

A: One thing executives need to watch out for is killing the goose that lays the golden egg. You need to reward these guys. If you’ve got incredible super-programmers, do you have a way of paying them what the top tier makes? The other thing is to involve the idea guys in the commercialization process. It can be disastrous to slap some paint on the prototype of something and get it into market. So, you need to be careful of the gap between the inventors and the executors.

Q: Can you give me an example of something you tried to sell internally that faced these challenges?

A: When I showed the Alto—what is now known as the PC—to the Xerox executives, we started realizing that there was a big disconnect when they asked us what its application was. We said, “It isn’t an application. It’s an industry.” The company wasn’t equipped to handle an innovation; it would have meant completely new packaging, all new manuals, handling updates, training staff, localizing to different countries . . . this is why executives truly love appliances. But you don’t make nearly as much money with an appliance as with an industry.

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