A second breath at Xerox

PARC, the most famous R&D Centre in California’s Silicon Valley lives a new strategy

[Jorge Nascimento Rodrigues – Sillicon Valley Tales 2008]

When an enterprise that feeds from intensive investigation and creativity reaches maturity, faces a dilemma. Either continues to concentrate in its legacy business, wasting emerging opportunities, and watching some of its brains escape, or changes its course and reinvents itself.

The change of course goes beyond related diversification. It can mean to focus on the optimization of its core competencies in different areas of knowledge or processes acquired for decades. This dilemma is particularly visible at enterprises with a success based in a structured production of state of the art investigation – in many cases, by consolidating in big centres that become worldwide references. That’s the case of Palo Alto Research Centre (known as PARC), based in the heart of Silicon Valley, since it was founded by Xerox in 1970.

Along with the successes in the creation of extreme innovations in the area of printing and document management, that allowed Haloid (established in 1906) and then Xerox (renamed in 1961) to maintain its competitive advantage in ”xerography” and then in “laser”, PARC as also assisted , during decades, to the (consented) escape of innovations and brains. The most famous escapes have generated new top technology business areas that Xerox didn’t take. We can quote some cases such as the graphic interface in personal computers (GUI) that would inspire Apple at the Macintosh, the Ethernet Protocol, the initial variety of the mouse, the “Bravo” Processor pioneer of Microsoft Word or the “postscript” language.

According to a survey performed by Henry W. Chesbrough, professor at Harvard Business School, between 1978 and 1998, PARC gave birth to “sons” who originated 24 star-ups that followed their own business model.

Strategic turning

Facing a controversial balance, in 2002 Xerox as decided to give PARC a second breath, providing it power to act as an individual enterprise (yet 100% owned by Xerox) and tracking a path of systematic exploration of the core competences existing in the whole group. Mark Bernstein, with a career at PARC since 1979, was chosen to be the project leader.

Instead of letting the brains leave, they are now seen as “intra-entrepreneurial”. This meaning, they have a chance to “incubate” their ideas and projects and to launch “spin-offs”, even if there is no direct relation with the three current key business growth areas of Xerox (colour printing, massive customization in offset, and new services in the management of document-intensive processes.

The mother enterprise will not lose its focus, but it could “federate” (a term officially not used by Xerox yet) a wider constellation of businesses based in its incredible intellectual property (8,600 active patents in the USA: 8 of its scientists own more than 50 patents each).

Sophie Vanderbrock, a Belgian holding the position as world-wide Chief Technology Officer, is responsible for the whole group and supervises the innovation network. When asked if this turning didn’t come too late, Sophie said: “The new strategy requires time. It is simultaneously a cultural transformation and an innovation in the business model. Our success in this turning proved we weren’t late. But it is too soon to make an evaluation“. Sophie is one of the women at the helm of the multinational – being Anne Mulcahy the president and CEO.

Brain fishing

Since the end of last year, PARC launched a programme to attract external entrepreneurship. It all started, when PARC was involved in the support of an external project in the area of solar cells, that originated Solfocus (referred by Expresso in 2006), and later in the area of natural language, with Powerset. PARC used its scientific competences to solve the related technological problems, keeping the innovations intellectual property and a percentage in the capital of the “star-up” (below 10%). Following the success of this model of merge, PARC is now prepared for its massification, refers Mark Bernstein.

Gallery of Innovations

PARC hosted a week of “Inside Innovation at Xerox”, in Palo Alto, California, were 10 new technologies were unveiled – 8 of them related to the legacy business of the mother house and two in new business areas: energy (in the area of solar cells) and biomedicine (a scanner capable to detect cancer cells 1,000 times faster than digital microscopy).

Together with the more well known cases is the demonstration of a new type of printing that uses reusable paper. This paper is especially suitable for temporary printings (such as electronic mail or web documents for temporary reading which represent 45% of the daily prints), the text or image disappear after a period of 24 hours, and the paper will be ready for a new print. To Paul Smith, an English scientist settled at the Xerox Canadian Centre of investigation, in Ontario, this technology is particularly useful for “high mobility workers”.

Many of the other innovations aim to make life easier to knowledge workers in areas such as law, financial, healthcare, governmental services and marketing.

To name just two: A linguistic engine for automatic comprehension of text, based on web semantics to perform a more efficient search – than the one used by Google -, developed at Xerox investigation centre in Grenoble. And a new process for revising text, enabling the definition of what can be read or printed by each type of access, without deleting or changing the original text.

Xerox also held an open house in its unit in Wilsonville, near Portland, Oregon, where the bet is on a solid ink range, (more environmental friendly and effective in terms of image quality).

(c) Jorge Nascimento Rodrigues, editor of www.janelanaweb.com and www.gurusonline.tv

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