1. Module 2: Part I The Role of R&D in the Corporation: Xerox as a Case in Point Professor Nina D. Ziv Polytechnic Institute of NYU New York City, New York Email: nziv123@gmail.com Professor Nina D. Ziv Polytechnic Institute of NYU New York City, New York Email: nziv123@gmail.com

2. Discussion Questions  What is the role of R&D in the corporation?  What should the relationship be between R&D and the business of a company?  What elements do you need to create a successful company?  Why did Xerox ‘fumble the future’ and fail to capitalize on its innovations, e.g., GUI, mouse?  What are challenges facing managers who manage R&D organizations?  What are the lessons learned from our study of R&D in Xerox?

3. Other Ideas on R&D - I  The Long Nose of Innovation  The bulk of innovation takes place over a long period of time – this is the long nose of innovation. Much of this is low key and takes place before new idea is generally known. Example is the mouse which was invented in 1965 then adopted in 1973 by PARC and then 1984 when first mouse used by MACS  An idea may start with an invention but bulk of work and creativity is in the augmentation and refinement.  Companies should focus on refining existing technologies as much as on creation – Buxton calls this prospecting, mining, refining and goldsmithing.  Long noses are great for sniffing out great neglected ideas and companies which can shorten the nose make a great contribution. Copyright©2010, N.D. Ziv, Institute for Technology & Enterprise

4. Other Ideas on R&D - II  IBM’s idea is to going all over the world looking to set up collaboratories which matches up its researchers with experts from universities and companies.  In Brazil, Saudia Arabia and other countries, IBM is collaborating with outsiders as an essential piece of its research strategy. This is in contrast with its usual way of operating which was to keep everything proprietary and secret.  No guarantee this can work because of issues of intellectual property and expenses  Also, controversial since critics say US competitiveness is weakened when flagship companies take crucial research projects overseas.  IBM thinks it can get ideas and other research streams it would not normally think of – larger scale ventures and large payoffs. Copyright©2010, N.D. Ziv, Institute for Technology & Enterprise

5. John Seely Brown’s Views on the Role of R&D Copyright©2010, N.D. Ziv, Institute for Technology & Enterprise  Corporate research must reinvent innovation and be a change agent  Emphasis should be on what Brown calls ‘pioneering research’:  Research on new work practices and organizational innovation as important as developing new products  Innovation must be transmitted throughout the organization and must be viewed as something that is co-created with other members of the organization, not just those who are directly responsible for R&D  Technology must be viewed as something that is integrated into the fabric of the organization and helps enable learning in the organization  The way to communicate the value of new innovations developed in the ‘lab’ is to go beyond just technology transfer and get people to experience first hand the value of the innovation  R&D’s ultimate partner is the customer who must be directly involved in the research and development process  Overall, R&D is seen by Brown to be as much a catalyst for transforming corporations as it is a place where technological innovations are created

6. Xerox - Background  Began As Haloid Company, a Small Photographic Paper and Supply Firm  In Late 1950s, Company Invests in Large Amounts of R&D to Develop Xerography Which Becomes Basis of Successful Copy Machine Business (the 914 Copier) and is a smash hit  In Early 1970s, McColough Decides to Change the Company’s “DNA”. Xerox Buys SDS for $900 Million in Stock. McColough Declares That Xerox’s Commitment Is to Research: “R&D Has Been, Is, and Will Be a Way of Life. Our Company Already Owes Much to the Prompt Exploitation of New Technology” Question: Can you change a company’s DNA? Copyright©2010, N.D. Ziv, Institute for Technology & Enterprise

7. PARC – The Promise  Jack Goldman, chief scientist establishes PARC to develop future technologies  Innovative Team Develops New Technologies (Ethernet, Mouse, GUI, laser printer, computer system )  Team Made up of Top Notch Scientists and Run by Bob Taylor  Culture Similar to Dotcoms of the 1990s – “Counterculture”  Enthusiastic, Flat Organization conducive to innovation  Generous funding from parent company Question: So What went wrong?