Four secrets of innovation success

Before Silicon Valley, there was Bell Labs the R&D organization of the former telephone monopoly, AT&T.  For much of the 20th century, New York/New Jersey-based Bell Labs led the world in groundbreaking R&D that spawned some of the greatest inventions ever created.  A new book by Jon Gertner, “The Idea Factory:  Bell Labs and the Great Age of American Innovation,” documented the history of the lab and what companies can learn to kick start their innovation engines.

Among its many accomplishments, Bell Labs can take credit for many disruptive innovations that have impacted virtually every consumer and organization.  These include the invention of:  the transistor and semiconductor, the communication satellite, the silicon solar cell (precursor of all solar-powered devices), optical fiber, the UNIX operating system, the C programming language, foundational cell phone technology and the laser.  Importantly, Bell’s breakthrough thinking also crossed over into management practice. Their mathematicians were the first to apply statistical analysis to manufactured products, creating what is today known as quality control.

It would behoove managers to explore the secrets behind Bell Labs stunning success. Based on my 20 years of helping organizations innovate, I think they got 4 key things right.


Behind every innovative organization there is usually strong, consistent and visionary leadership.  At Bell Labs, the man most responsible for building a culture of creativity was Mervin Kelly.  Between 1925 and 1959, Kelly was employed at Bell Labs, rising from researcher to chairman of the board. His vision was to establish an “institute of creative technology” that needed a “critical mass” of talented people to foster a “busy exchange of ideas.”  Kelly provided the critical leadership and management practices that allowed innovations and a supporting culture to flourish.


The Bell Labs’ mantra could have been stated: to boldly envision the future, move deliberately and build things.  It was clear to everyone that the ultimate aim of their organization was to transform new knowledge into transformational things that can be commercialized.  Behind this credo was a recognition that the innovation process was serendipitous and that real breakthroughs took a long time. This required both management and researchers to exhibit patience – having the time to do what was necessary – and to be practical, working on things with a commercial focus in mind.


This institution employed some of the smartest people in America, purposely recruiting across many disciplines, thinking styles and roles.  They put them under one roof, giving them the freedom to create and the duty to support each other.  Providing this autonomy was critical in ensuring the researchers were empowered and not hamstrung by organizational barriers to creativity.  Forcing collaboration was essential to mobilizing the necessary brain power, breaking down information silos, and avoiding politics.  For example, every expert was required to mentor new hires in order to transfer their subject matter expertise and to reinforce the organization’s esprit de corp. Bell Labs would end up pioneering the development of cross-functional, cross-specialty teams working under one roof on major initiatives.  Although harmony and sharing were important values, there was also recognition that creative tension and project competition was useful in solving certain hard-to-crack problems.

Organizational dynamics

At Bell Labs, management used a variety of organizational strategies to encourage a busy exchange of ideas and to create a culture of collaboration.   For example, satellite labs were set up in the phone manufacturing plants to improve the odds of commercialization and to foster 3-way collaboration between the manufacturers, design engineers and researchers.  From an office perspective, the laboratories and common areas were physically laid out to ensure that people and ideas flowed freely and randomly.  The physical proximity of individuals was seen as important to driving collaboration; communicating via the phone was not enough.  In another case, there was an office open door policy (this before the era of cubicles) to encourage free-flow communications.

Two fundamental lessons can be drawn from the Bell Lab’s story.  First, to generate breakthrough innovation (as opposed to incremental improvements that are easily matched in the market) organizations must leverage both sides of the R&D coin:  basic research plus commercialization-focused development.  Second, innovation can just as easily happen with deliberate corporate teams as it could with young entrepreneurs working out of their garages.  Today’s dominant approach to innovation in IT – Facebook’s “move fast and break things,” and Google’s “gospel of speed” – is not the only way to produce R&D breakthroughs and winning products. Though technological revolutions happen quickly, they tend to evolve slowly.  Firms would be wise to spend the requisite time getting the technology, culture and products right.

For more information on our service and work, please visit the Quanta Consulting Inc. web site.


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