Xerox Says Old Apple Legend Misses the Point

Three staff members at PARC, aka Xerox's (NYSE: XRX  ) Palo Alto Research Center, have published a feisty response to Malcolm Gladwell's May 16 New Yorker article, "Creation Myth: Xerox PARC, Apple, and the Truth about Innovation."

In short, the post acknowledges that the legend of Xerox PARC -- the oft, oft, oft-repeated story (repeated once again by Gladwell) that Xerox "flubbed the future" by giving away its best idea ever, the personal computer, to a young Steve Jobs -- is basically true. But the essay points out that it took some circumstances unique to PARC to generate the idea in the first place, and that the story wouldn't play out the same way if were happening today.

The Gladwell article is subscription-only, but I can boil it down for you pretty quickly. It tells how 24-year-old Jobs visited PARC in late 1979; got a demonstration of the Xerox Alto personal computer from PARC engineers Larry Tesler and Bill Atkinson; took the concept of the Alto's $300, three-button computer mouse to an industrial designer named Dean Hovey, who redesigned it as single-button mouse that could be built for $15; had Apple's (Nasdaq: AAPL  ) software team soup up the Alto's graphical user interface with menus and direct manipulation features; and eventually ended up with the Macintosh.

Then the piece goes into a highly Gladwellian digression about innovation in the Russian, U.S., and Israeli militaries, arguing that it takes a combination of Soviet-style systematic analysis, U.S.-style high technology, and Israeli-style improvisation under constraints to run a successful war or create a successful product. PARC, he argues, had only the technological abundance, not the analysis or the constraints. He drives home the point by telling the story of the Xerox scientist Gary Starkweather, who was so annoyingly prolific that managers nearly killed off his laser-printer idea -- which, of course, later grew into the lab's greatest legacy and "paid for every other single project at Xerox PARC, many times over."

In very polite language, the PARC post, written by online strategist Sonal Chokshi, business-development director Lawrence Lee, and research fellow Pete Pirolli, argues that Gladwell's article presents a slightly oversimplified picture of the relationship between invention (creating a new idea) and innovation (applying the idea in the marketplace). In particular, the authors argue that you can't have innovation without lots of invention, and that PARC -- having worked out a better way to collaborate with outside partners -- is now pretty good at both. "In contrast to [Gladwell's] thesis that there's a clean split between invention and innovation, and that companies are structurally limited in their innovation opportunities -- we believe that there is now a framework that allows companies to innovate beyond their comfort zones and existing infrastructures," the post reads. "It's called open innovation."

Open innovation is the idea, worked out by Berkeley business professor Hank Chesbrough and others, that companies should have permeable boundaries when it comes to intellectual property -- licensing in technology from outside when it's key to building new business lines, and licensing it out from inside when it's not being properly exploited. After going through a semi-spinoff that transformed it from an R&D wing of Xerox into a contract research organization, PARC is now largely in the business of open innovation, helping its clients capitalize on their own technologies and seasoning them with concepts homegrown at PARC.

Chokshi, Lee, and Pirolli point out that the PARC of today takes a "portfolio" approach to innovation, encouraging some risky projects while at the same time investing in others that are more likely to pan out (a theme Lee covered in an earlier Xconomy guest post). They say you have to invent lots of things (like the Alto) before you find a profitable one (like the laser printer); "the number of successful ideas that emerge is a function of the volume of failed ones," they write.

They also argue that PARC is a good partner today because it has internalized many of the concepts that Gladwell wrote about, such as the need to impose limits to turn ideas into innovations: "As Gladwell observes, Apple wanted to build a popular vs. a personal computer. So Steve Jobs pushed his designer by adding constraints to the mouse such as low price and high reliability. We've found that you don't have to 'turn the &*^%$;# tap' of creativity off -- but you can focus the tap by imposing constraints (in our case, these often come from our clients reflecting their product or service strategy)."

If Jobs visited PARC today, the PARC authors conclude, the result would probably be an open collaboration rather than simple leakage of PARC's ideas. "There would be a much better understanding of his goals, our goals, and what we would want to accomplish -- together -- through open innovation," they write. The bottom line: PARC sees itself as a very different place today from the one depicted in the Apple legend, and it's taking advantage of its moment in the New Yorker's spotlight to make sure the outside world understands the difference, too.

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can e-mail him at wroush@xconomy.com or follow him on Twitter at twitter.com/wroush. You can subscribe to his Google Group ,and you can follow all Xconomy San Francisco stories at twitter.com/xconomysf.

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Read/Post Comments (6) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 14, 2011, at 1:30 PM, websterphreaky wrote:

    Yea, that's CrApple indeed ... IDEA THEIVES, INTELLECTUAL PROPERTY PIRATES, BUYS or Steals every successful piece of Software they ever had (System whatever, Apple Works, Final Cut, Konfabulator (widgets), Logic Pro, on and on and on).

    CrApple the Great iNOvator.

  • Report this Comment On May 14, 2011, at 1:48 PM, Henry3Dogg wrote:

    "If Jobs visited PARC today, the PARC authors conclude, the result would probably be an open collaboration rather than simple leakage of PARC's ideas."

    Leakage of ideas us an odd way to describe the purchase of IP licence for stock.

  • Report this Comment On May 14, 2011, at 3:22 PM, Henry3Dogg wrote:

    @websterphreaky

    Is this another of Facebook's campaigns you're on?

  • Report this Comment On May 14, 2011, at 6:14 PM, FreeRange1 wrote:

    @websterphreaky - sounds like your parent's still haven't let you out of the basement. By the way, the doctor called. Your meds are ready.

  • Report this Comment On May 14, 2011, at 7:03 PM, Hocko1 wrote:

    websterphreaky is known to post on every financial board available. His "CrApple" phraseology is the dead giveaway in any forum. It's rumored that he missed the boat when Apple was at $10/share and has vowed to exact his revenge ever since.

    Here's to you, websterphreaky! Keep up the moronic fight!

  • Report this Comment On May 14, 2011, at 9:49 PM, peanutgalerygeek wrote:

    I will say one thing. I used to be very skeptical of IT projects that started off with an implementation date. After all, how do you know when something will be done before you start?

    In the last few years though I have become a believer in this approach. It allows the project manager to 'throw stuff off of the island' if it materially impacts the delivery date and has a way of imposing discipline on everyone involved.

    If after all of the marginal items people want to pile on are tossed off and the PM can see that the project STILL won't make it, at that point you start negotiating an extension of the project.

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