Speeches: Progress and Innovation

"PROGRESS THROUGH INNOVATION --
YOU CAN'T HAVE ONE WITHOUT THE OTHER"

          Good evening...and let me say right off the bat that I'm delighted to be here with so many of you leaders of the future. And I can hardly think of a more appropriate topic for tomorrow's leaders to be thinking about...than progress and innovation...because, let's face it, to some degree, you're going to be responsible for the progress of the society in which you will be leaders. And so I thought I might help you prepare for that role, by offering a few thoughts on just what innovation is...why we need it...how we get it...and how you can help bring it about.

          First, let's get some idea of what innovation is. Back in the late 19th and early 20th centuries, there was a great German chemist named Johann von Baeyer. He made many contributions to science, and in 1905, he was awarded a Nobel Prize. One morning, Baeyer came into his laboratory and found that his assistants had built an ingenious mechanical stirring device operated by water turbines. The professor was fascinated by the complex machine, and he summoned his wife from their apartment next door. For a while, Frau Baeyer watched the apparatus in silent admiration. And then she exclaimed, "What a lovely idea for making mayonnaise!"

          There's a basic distinction to be made here: the good professor's students were the inventors -- but his wife was the innovator. As Peter Drucker says, "above all, innovation is not invention. It is a term of economics rather than of technology. The measure of innovation is the impact on the environment." Innovation, according to Drucker, "allows resources the capacity to create wealth."

          But invention and innovation don't necessarily happen together. In fact, if you look at the history of science, you find that very often the application of a new idea has lagged the idea itself, by many years, sometimes centuries.

          One reason may be that the supporting technologies don't yet exist to make the invention fully functional. Five hundred years ago, Leonardo da Vinci envisioned a flying machine...an armor-plated tank, complete with firearms...a portable bridge...a cannon that worked like a modern machine gun...battleships... mechanically propelled armored cars...even an "ideal city" -- but of course, he never built them.

          And let's say you do create a one-of-a-kind model. That doesn't automatically mean that you can turn it into a useful, functional, marketable, device. It often takes someone else to do that, and perhaps with just one twist-of-the-wrist modification. The transistor was invented in Bell Laboratories in 1947. Yet Sony sold the first transistor radio in America in 1956. In that same year Ampex, a U.S. company, introduced the first videotape recorder -- but Sony improved its design and introduced its Betamax in 1975.

          If innovation is to follow invention, the social and economic conditions have to be right, too. There had been many primitive calculating devices -- going all the way back to Leibniz -- before William Burroughs invented his adding machine in 1894. But by then, the time was right. Business and industry were getting pretty complicated, and Burroughs' invention was quickly commercialized and saved people from the endless toil of calculation, just as the inventor intended.

          But earlier in the 19th century, a genius named Charles Babbage had conceived -- and even partially built -- an extraordinary data processing device which he called an "analytical engine." At the time, few if any saw the implications of Babbage's work. It wasn't until the Second World War, when military people needed to rapidly calculate the trajectories of artillery shells, that the first true computers appeared -- and in structure and function, they were remarkably similar to the analytical engine of Charles Babbage.

          So we have invention...and we have innovation. And it's innovation that's essential to progress. In the words of Theodore Levitt, editor of The Harvard Business Review, "Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation the vital spark of all man-made change, improvement and progress."

          Why is innovation so critical to the success of countries, and even to the future of humanity? Because it's the raw material for the creation of wealth; everything else is just reshuffling and redistribution of what we already have. Just as a lever dramatically increases the amount of force you can exert, so does innovation raise productivity, spur economic growth and increase wealth. In a world where everything has its price, technological innovation -- though it's not without its costs -- is still the closest thing there is to an economic free lunch.

          And I'm not just talking about recent innovations like the automobile, the telephone, or the computer. The ancient Greeks gave us the lever, wedge, pulley, and gear. (In fact, sometime in the first century, Hero of Alexandria even invented a coin-operated vending machine to dispense holy water!) In the Middle Ages came the horseshoe and stirrup, which revolutionized transportation and warfare...as well as the chimney, which facilitated home cooking and allowed us to get presents from Santa Claus. Islamic society gave us paper. And the Chinese invented matches, the umbrella, and the toothbrush.

          My point is that many of what now seem to us to be the most mundane of contraptions...actually had a profound effect on human progress. The wealth, comforts, and living standards we enjoy today...are built upon thousands of years of innovations, many of which are now so common that it's hard to think that there was a time when they didn't exist. But every generation makes its contributions, just as you will make yours. And that's why, now that you know a little about what innovation is, it's important to get some idea of how innovation takes place -- in societies, in organizations, and in individuals. I'll talk a little about the first two, but I'm going to devote most of my time to the third, because while your influence on organizations and on society are some years off, there are some things you can do right now, as individuals, that can help make you the innovators and, yes, the leaders of the future.

          The question of what drives innovation in a society is a tough one that nobody has a definitive answer to. You need a supply of good ideas, plus an environment in which they can develop. So a society's level of education...its willingness to bear risk...the tolerance of its religion and its political structure...and its general openness to new ideas -- probably all have something to do with it. Even factors as diverse as good nutrition and property rights may play a role. But when everything comes together, watch out! It's probably no coincidence that in ancient Greece and the Renaissance, there was extraordinary innovation not only in science, but in literature and art as well.

          Of course, war is a great motivator, a shock to the system, a forcer of innovation for survival. As I mentioned earlier, war helped bring about the first modern computers. A few decades earlier, it was the First World War that drove the Germans to find a new kind of marine propulsion system -- an alternative to paddle wheels. They came up with screw-driven, thrust-bearing propellers. The concept had been known about for a hundred years (and the screw goes back to the ancient Greeks, remember?)...the lubricants and materials already existed -- but engineers had never had such a powerful reason to bring them all together. And of course, the classic example is the Manhattan Project, which, in the interests of winning World War II, created the atomic bomb and changed the course of history.

          The innovations that had the most powerful effect on living standards, including some of the ones I mentioned, are discussed in a very interesting book called The Lever of Riches, which was published last year. The author, Joel Mokyr, argues that there's no single set of conditions that guarantee technological innovation. And he reminds us that progress can not be taken for granted, because there are such powerful forces that oppose it and enforce the status quo.

          Look at what happened in China. Before 1400, the Chinese were the most advanced civilization on earth. Before Columbus was even born, they were sending out huge "treasure ships," with crews of 500, all the way to the Persian Gulf and East Africa. One expedition brought back a giraffe, which was something of a culture shock to the folks back in Peking. The ships could have made it all the may to West Africa and Europe. And with all of their inventions and innovations, the Chinese may even have been within reach of the kind of industrial revolution that took place in Europe.

          Then, suddenly, it was all over. And nobody knows exactly why. All we know is that the government was in charge of invention and innovation...and at some point, it lost interest in technological progress. The bureaucrats, the custodians of the status quo, got the upper hand, they decided that the wealth of the Empire was to be spent on public-works projects that would improve the lot of the nation's farmers -- and that was that. Leadership in technology began to shift to Western civilization, where it remains to this day.

          Well, so much for what innovation is...and the kind of social environment that's conducive to it. Now let's narrow our focus and zoom in on business organizations, especially the science- and technology-based companies in which many of you will spend at least part, maybe even all of your careers. How can they be organized for innovation?

          Let me begin my answer with a comparison. I'll ask you to think about the difference between basketball and football as a metaphor for differences in management...and by "management," I mean simply the most effective marshaling of human talent to get things done. Traditionally, American businesses operated like football teams -- but it's the basketball team that's the model for the management style of the 90's and beyond.

          You see, in football, we find narrow specialization of function -- centers, linebackers, tackles, even special teams. The individual players at some positions tend to be interchangeable parts. But basketball puts a premium on generalized skills: though some players excel at scoring, playmaking, and so on, everyone must pass, dribble, shoot, play defense, and rebound.

          In football, the players pause and regroup after each play, and one player -- or the coach -- decides what the team will do next. But basketball is too dynamic to permit rigid separation of planning and execution, which is what the football huddle is all about. And you can't rely on pre-set plays for every situation.

          The point here is that to be the leading innovators in our world of rapidly-advancing technology and global competition, we in U.S. industry have to learn to move quickly -- to constantly improve our products and, most importantly, our manufacturing processes, within ever-shortening time frames.

          And to do that, we have to be less like a football team -- and more like a basketball team. We need to integrate specialist and generalist, managing and working, planning and doing. Specifically, we need to move people from one job to another to give them breadth...we need to make sure people they have as much autonomy as they can handle, and we need to act as quickly as possible on what seem to be good ideas, -- in other words, we need to avoid paralysis by analysis.

          But that's not the only way to organize for innovation. Another is to form cross-functional teams, the way they do in hockey.

          I can't overemphasize the importance of engineers like yourselves being team members with people from other disciplines. In any industry or organization, cross-functional teamwork is the mark of the innovative organization.

          It's up to both the organization and the individual to make teamwork...work. The company has to see the importance of crossing the walls that naturally form between functions; it has to emphasize and promote teamwork.

          But you as individuals have a role in it, too. Your colleagues in other disciplines may not share your technical vocabulary or even your view of the world -- but you'll need to work with them, on projects to which each of you has a significant contribution to make.

          To organize for innovation, we also have to stay as close as possible to our customers...because that's how we know which of our inventions has the potential to become a real -- that is to say, a useful, marketable -- innovation. And we have to keep our technology base strong, through a long-range commitment to science and engineering programs.

          Cross-functional teamwork...a fast-breaking basketball style of execution...an understanding of the customer...and leading-edge technology: those are the four principles of innovation at our company. Other companies organize for innovation in their own ways. 3M has an excellent record, based on a few simple principles: they keep their divisions small (in fact, each division manager must know every staffer's first name)...they encourage experimentation and tolerate failure (each division's goal is to get 25% of its sales from products developed in the past five years)...they share internally developed technology throughout the company...and their researchers, marketers, and managers work with customers to brainstorm new product ideas.

          Hewlett-Packard urges its researchers to spend 10% of their time on pet projects -- and gives them 24-hour access to labs and equipment. Merck also gives its researchers time and resources to pursue high-risk, high-payoff projects.

          My point is that there are lots of possibilities. And if you're in a company that consistently does any or all of the things I've mentioned...then you're in a place that's organized for innovation.

          Now let's narrow the focus still further. Let's talk about you. Let's talk about innovation at the personal level...because when you get right down to it, it's not societies or organizations that innovate; it's people. So what can you, as an individual, do to train yourself to be an innovator?

          First, I would advice you to cultivate breadth. Be a first-rate specialist -- but be a generalist as well. Be like a doctor who's an excellent surgeon, but who also has the broad knowledge of a general practitioner. Of course, there is no substitute for strong functional expertise. But it's possible for engineers to become so functionally narrow that they don't have the capability for innovation. They may be great inventors -- but poor innovators, just because they are so narrow.

          So...even as knowledge increases exponentially, the key is to develop deep functional skills in your discipline (or sub-discipline) while you maintain a broad view of the world about you. To me, that's critical to the process of innovation -- and to the progress that follows.

          Why? Because in the world outside the university, the application of knowledge is far less compartmentalized than the acquisition of it. Finding an innovative solution to a problem may require you to employ concepts and insights from two or three or more different fields.

          Time and again, innovation has come from crossing from one discipline to another...or from making a linkage between one branch of science or technology to another. In fact, the computer journalist Peter Borden, quoted in Roger van Oesch's 1983 book A Whack on the Side of the Head, says that "most advances in science come when a person, for one reason or another, is forced to change fields."

          You could even argue that this is the only way that innovation takes place. Thomas Kuhn was the man who first described how and why it happens that from time to time, scientists in one field or another adopt whole new paradigms, whole new sets of assumptions and ways of looking at things. And Kuhn said this:

          "Under normal conditions the research scientist is not an innovator but a solver of puzzles, and the puzzles upon which he concentrates are just those which he believes can be both stated and solved within the existing scientific tradition."

           In other words, the normal path to professional success encourages, even forces specialization. But nevertheless, the true innovator resists it.

          So what can you do? Well, I would say that it's up to you, both during your formal education and afterward, to perform the synthesis -- to look for ways in which the various disciplines complement and reinforce each other...to learn, as early as possible, to think in terms of systems, to find the "networks", the "connective tissue" between one discipline and another.

          And it's not only jumping from one branch of a discipline to another...or from one science to another...that helps you to grow into an innovator. It's a broad perspective on the world.

          The problem is that too many engineers are happy to live within the confines of their little world of engineering...as opposed to knowing what's happening in Iraq, or up in space, or in a film, play or novel that has nothing to do with engineering. Carl Ally, founder of an advertising agency, once said that

          "the creative person wants to be a know-it-all. He wants to know about all kinds of things: ancient history, nineteenth century mathematics, current manufacturing techniques, flower arranging, and hog futures. Because he never knows when these ideas might come together to form a new idea. It may happen six minutes later or six months or six years down the road. But he has faith that it will happen."

          It's impossible to say, right now, just what combination of stimuli and inputs will catalyze your individual personality and intellect and produce innovation...which is why it's so important for you to make the range of inputs as wide as possible: reading Dune, or Time, or The Atlantic...or listening to jazz or minimalist music...or playing tennis on Saturday afternoon. What's tennis have to do with innovation? Maybe nothing. Maybe it just frees up your mind for a while. Or maybe it gets you thinking about the infinity of possibilities within the simple, never-changing geometry of the court...or whatever.

          Thirty years ago, I wondered why they made me take English composition and English literature. Now I know why. And I wish I'd had more, rather than less, of them. The composition improved my communication skills, which I'll come to in a moment, and the literature introduced me to other people -- to their lives, their values, their personalities, their interactions with the world around them -- all of which are key considerations for the engineers who would be innovators.

          Even the engineers who will go down in the annals of engineering as the world's best...were not narrowly focused. Maybe that mysterious "X factor" that defines the real innovator...came in some way from their other interests.

          Examples? Well, the one I like is Antoine Lavoisier. He's best-known as the founder of modern chemistry. But he also pioneered in physiology, scientific agriculture, and technology...and was also, in his time, a leading figure in finance, economics, public education, and government. Makes you wonder when he had time to sleep!

          Of course, back in the 18th century, it was easier to know a lot about everything than today, when our knowledge is doubling every ten to fifteen years. But that doesn't mean we shouldn't try. In our time, we have innovative geniuses like Edison, a man of very broad interests, or Buckminster Fuller, who was into architecture, automotive design, city planning, education, and even the technological perfection of humanity -- and that's only a partial list of his interests.

          Lavoisier, Edison, Fuller, and dozens of others weren't just engineers. They weren't holed up in their pilot plants or their labs. They had other interests. They were out doing other things with their lives. And I hope you'll do the same.

          Along with functional expertise and breadth, I would advise you to develop three separate but mutually-reinforcing sets of skills: analysis/problem solving, persuasion, and vision.

          You don't have to worry too much about analysis and problem-solving, because this is where American education excels. The training of engineers, accountants, financial people, systems analysts, and so on, all gears people for organizing, analyzing, and processing data; for finding solutions to problems; and for making decisions.

          So to develop yourself in this area, you simply need to acquire a solid technical background in the basic disciplines and analytic techniques. The better your foundation, the better you'll be able to solve problems under an ever-changing variety of conditions and an onslaught of new information.

          The second major skill area is persuasion.

          Back in 1865, Gregor Mendel made momentous discoveries in genetics -- discoveries that had no effect for 35 years. That's partly because 19th century anatomy and physiology didn't allow for the concept of discrete hereditary units; also, Mendel's statistical methodology was completely foreign to the biologists of his time. But that 35-year time lag may also have had something to do with the fact that Mendel was a modest monk living off the beaten path in a monastery in Moravia.

          Or consider Oswald Avery, who made the milestone discovery that DNA was indeed the genetic material -- in 1944, 21 years before Watson and Crick discerned its exact structure and function. Why wasn't his contribution recognized at the time? Well, an article in The Scientific American points to his "quiet, self-effacing, non-disputatious" personality. Not exactly your high-powered Lee Iacocca type.

          But if you're going to be an innovator, you need a little of Lee Iacocca in you. Every innovator will encounter resistance, so every innovator needs to be able to sell his or her ideas -- to influence, charm, persuade, arm-twist, compromise -- do whatever it takes to get people to give his or her ideas a fair hearing.

          What you can do to become better in this area? Put strong emphasis on your interpersonal and communications skills. Make sure you take some courses in language, rhetoric, writing, human behavior, or speech communications. And get involved in group activities, clubs, or organizations; put yourself in settings in which you have a chance to persuade people to put ideas into action.

          Finally, to train yourself for innovation, you need to develop your imagination, your intuition, your vision. You've got to be a little like the entrepreneurs, the dreamers, the visionaries, the "ship captains" who know their destination even though no one can see it. These are people with a strong sense of purpose...and powerful beliefs about the way things should happen.

          In business, these are people like Tom Watson, who founded IBM...like Alfred Sloan, who created the framework for the modern General Motors...like Henry Ford, who stated his vision very explicitly: "I will build a motor car for the great multitude...so low in price that no [one] will be unable to own one -- and enjoy with his family the blessing of pleasure in God's great open spaces."

          What you can do to become more of a visionary? Well, unfortunately, this ability is very hard to teach, and it isn't given much attention in school. The best way to get next to it is to expose yourself to examples: read biographies of successful visionaries in politics, business, and the arts; take courses in religious studies, philosophy, art history, and literature.

          Now, I know that my comparing scientific innovators with poets and artists may seem far-fetched, but it really isn't at all: both spend a lot of time in the world of the imagination, and both envision completely new arrangements of things. The leap to a new way of hearing or seeing, which artistic innovators make...really isn't so different from the scientific innovator's leap to a new way of thinking.

          Well, I've covered a lot of ground tonight, so let me sum it up for you: Innovation is not the same as invention. Although we need both, it's innovation -- the development of practical products and processes -- that really drives economic growth and human progress. But neither progress nor innovation is guaranteed. That's why it's important that our societies promote innovation...that our companies organize for it...and that we as individuals -- and you, as leaders of the future -- train for it.

          I hope it's clear, from all I've said tonight, that although no single field has a monopoly on innovation, the engineering mind and the engineering discipline are well-suited to the generation of innovative ideas. I think Isaac Asimov said it best: "Science can amuse and fascinate us all -- but it is engineering that changes the world."

          You have an opportunity to change the world. I urge you to make the most of it.