A couple of articles in the Oil and Glory blog describe innovation at Bell Labs (Book Review: Jon Gertner’s “The Idea Factory” and What Obama could learn from Bell Labs).  Bell Labs, as the article points out, delivered many of the innovations that made modern devices possible:

“The name Bell Labs is synonymous with cutting-edge invention, winning seven Nobel Prizes (including by Energy Secretary Steven Chu) and turning out world-changing inventions like the transistor (pictured above), the silicon photovoltaic solar cell and radio astronomy. 

It is interesting to see that even fifty years back, Bell Labs had a clear understanding that innovation requires new technology and manufacturing processes integrated into a system that provides concrete benefits for the  user:

“It is not just the discovery of new phenomena, nor the development of a new product or manufacturing technique, nor the creation of a new market. Rather the process is all these things acting together in an integrated way toward a common industrial goal,” he quotes Jack Morton, a Bell Labs engineer.”

Even the leadership had a definition of what innovation meant that could be easily communicated. As we have discussed in the past, if the leaders do not know what innovation is, how are they going to encourage it?:

At Bell Labs, Mervin Kelly’s shorthand definition of innovation was something that is “better, or cheaper, or both.” If this succeeds, it will certainly fall into that category.

They even realized that the key to innovation is the ability to effectively address technological complexity and then mask it in the user experience.

“One of the more intriguing attributes of the Bell System was that an apparent simplicity — just pick up the phone and dial — hid its fiendish and increasing interior complexity,” Gertner writes. 

So, what made innovation happen at Bell Labs?  The most important factor was vast resources (probably funded by AT&T profits in addition to limitless government funding).  These resources meant a large and brilliant work force had the freedom to pursue many problems.  More importantly, they had a never ending stream of challenges that focused innovation:

Structurally, what defined Bell Labs was a large, brilliant, interdisciplinary work force that was supplied with freedom and vast resources and a never-ending stream of technical problems within the phone system that drew on the staff’s expertise. 

As we have discussed in the past, innovation happens at the intersection of technologies.  The Bell Labs model encouraged informal interactions between multiple disciplines and the abundance of resources facilitated experimentation:

In Bell Labs’ old days, an informal exchange of ideas (over lunch, during a stroll in the hallways, and so forth) was part of the innovation process. At universities and research institutions everywhere, it still is.

Furthermore, business processes were flexible enough to allow a variety organizational structures to nurture innovation in multiple ways – any thing from three person groups to very large teams:

With an invention like the transistor, Bell Labs used an orchestrated effort and a mid-sized team; but the silicon solar cell was quite different. Indeed, the latter breakthrough was serendipitous: Three men, each working in different buildings, somehow connected the right technology with the right problem at the right time. Meanwhile, later innovations such as cellular phone networks and the development of fiber optic systems required vast teams of hundreds of people. I think all these approaches — perhaps with the exception of the solar cell — were quite targeted, and are thus still viable today. 

So what can we learn from Bell Labs?  The author is uncertain.  I think we would be hard pressed to show a business case for the level of investment.  It is true that a lot of great innovations came out of the organization. However, we tend to forget major failures.

More important, perhaps, was that the Labs management at times made big errors in judging what technologies to pursue for the future. In my book I focus on two in particular: the waveguide and the Picturephone. 

Also, it is easy to forget that not everyone working at the lab was an innovator and the management really knew how to enable success.

And I think that’s a mistake. Bell Labs was not a great experience for everyone employed there; there were internal politics, personality clashes, miscommunications, and every other problem that affects a big organization. 

Much more importantly, the world has changed quite a bit in the last few decades and the idea of a walled garden for innovation probably will not be successful in the current environment.

Research efforts are expected to move faster today, and there seems to be a lower tolerance for failure, especially if any public funding is involved. Also, an ability (or willingness) to invest for the distant future, and to thus work with a new technology through an arduous and expensive development process, seems to be in shorter supply.