Tech talk

At a meeting on Bali a decade ago, just as the Internet bubble was inflating, University of California, Berkeley, Nobel laureate Charlie Townes held an audience of Asian entrepreneurs spellbound as he reminisced about inventing the laser. Townes described numerous contributions from the open, wide-ranging discussions he had with colleagues “across and down the hall” from his Bell Labs’ office and at Columbia University, discussions actively nurtured in those institutional environments of fierce intellectual exploration and passionate debate. Although Townes was credited with inventing the laser, his humble point was that the invention, like all innovation, was largely a social enterprise, built on the work of those who had come before, harnessing the insights of contemporaries.

Although the story is not included in their thoughtful new addition to the literature on innovation, Massachusetts Institute of Technology professors Richard Lester and Michael Piore have taken Townes’s lesson to heart. Indeed, Innovation—The Missing Dimension is a 200-page brief for bringing creative, interpretive conversation back into the highly analytic and engineering-driven product-design process and for protecting the quasi-public spaces such as universities where, they claim, such conversations best flourish. Therein lie the book’s many strengths and some predictable shortcomings.

Using case studies that range from cell phones and medical devices to the laundering of blue jeans, the authors set up two archetypal product-design methodologies: the analytical and the interpretive. Analysis, which they identify as today’s dominant industrial management and engineering practice, is the goal-directed process that treats an innovative concept as a problem to be solved as efficiently as possible by reducing it to a set of engineering requirements. The neglected approach is interpretation, which they liken to orchestrated, structured conversations among all the critical actors, including designers, product and process engineers, marketers, customers, and others who have a stake in an innovative concept.

In the process of interpretation, the authors argue, what “emerges from these conversations is a language community within which new products are conceived and discussed.” By essentially creating a new common language through conversation, the stakeholders can fully explore ideas that the analytic approach might truncate, giving rise to new interpretations of the product to be designed. Unexpected innovations can result.

Like the particle and wave properties of Townes’s laser light, analysis and interpretation are simultaneously necessary and apparently opposed. Analysis is project-driven, aimed at closure, and intent on reducing concept to practice. Interpretation is open-ended, thrives on ambiguity, and aims at entirely redefining the product concept. According to Lester and Piore, successful innovation is the result of striking a balance between these apparently contradictory activities.

These are heuristic archetypes, of course, so neither accurately captures the messier “mixed-mode” design process at most firms—large or small, established or startup. In startups doing cutting-edge innovation, for example, where the risks of market rejection are high, there is often continuous “interpretive” feedback that leads to product changes even as engineering specs are defined and production moves forward. It is likely that established larger companies strike a different balance and freeze product design earlier. Such real-world differences and their consequences might be telling for managers struggling with innovation, but the authors choose to gloss over them.

Lester and Piore generalize that firms are using the straightforward analytic approach as a low-risk strategy for dealing with the intense competitive pressures wrought by globalized markets and the impedance-free movement of investment capital. Ambiguity gives way to certainty, internal conversations are foreshortened, troubling stakeholders are excluded, and new products reach the market more quickly. But, the authors imply, retreating to the low-risk strategy will sacrifice opportunities for more novel innovation that an extended interpretive conversation might produce.

To the extent that firms have indeed embraced the analytic approach to the exclusion of interpretation, the authors make a timely point: U.S. firms in particular must generate novel innovation to compete effectively in increasingly price-driven, commoditizing markets subject to global competition. This is true not only for those firms that compete on the basis of their new products or technologies, but also for companies such as Dell, Wal-Mart, and eBay that succeed because of innovative business models.

Innovation is not a how-to book, and the authors consequently make no real attempt to systematize their insights into practical advice for man-agers—something that would have required more hard-headed engineering and less interpretation. Instead, as they make clear in the book’s last two chapters, their intent is not so much to instruct as to throw light on a little-recognized national trend.

They argue that the nation’s “spaces for interpretation” have narrowed precipitously over the past two decades. As evidence, they point variously to the sad demise of Bell Labs and the concomitant competitive cut-back of wide-ranging corporate research (as opposed to development), and especially to the closer coupling of university research to commercial industry that resulted from tech-bubble greed and fiscal problems.

The result, they contend, is to call into question the nation’s ability to continue to generate the kind of innovation that sustained the United States in the 1990s. By phase-shifting levels of analysis, the authors introduce a burden that they cannot overcome: the need to provide detailed evidence. The contention is intriguing and might even be true. It deserves a more thorough treatment.

A fuller treatment would have identified promising trends to the contrary. In my part of the world, where venture finance seeks the next wave of innovation, tremendous “interpretation” is again taking place. The conversational ferment is in some of the usual places— especially around the leveraging of a near-ubiquitous digital infrastructure that is an order of magnitude lower in cost than what existed a mere 10 years ago—and in a number of new spots as well. For example, it is increasingly at the intersection of different engineering disciplines and with the interaction of engineering and information technology with biology, energy, nanoscale materials and devices, and environmental sciences.

To be sure, there are major threats to the ability of the United States to generate and then benefit from the next waves of commercial innovation. Foremost among these might well be the current administration’s dangerous preoccupation with security, which can forestall the inward migration of crucial intellectual capital, truncate debate and intellectual exploration, and narrow R&D funding from long-term broad-based objectives to short-term military needs.

Lester and Piore provide one lens for amplifying such problems. To the extent that national innovation policy is currently dominated by one side’s peculiar faith-based “analytic,” the authors’ call for broadening the conversation and constructing a new common language community is to be applauded. Credit Lester and Piore with creating a useful syntax for discussion. By exploring the limits of conventional analysis and the opportunities presented by interpretation, they help to set up the debate. Carrying it forward must be a social enterprise.