What was the difference between GE and Xerox in this regard?
The inner workings of each company’s R&D process, fortunately, have been the subject of detailed histories. Dealers of Lightning, Michael Hiltzik’s history of Xerox PARC, contains numerous cautionary tidbits for Google. For one, relying on moon shots while belittling incremental innovations is dangerous. Second, it’s not true that “if you have the smartest people, you’ll end up ahead,” as one PARC executive flatly professed. What comes across in Hiltzik’s book, above all, is the mutual sense of alienation within the company. Xerox’s businesspeople didn’t speak the language of science. Its scientists didn’t speak the language of business. And neither side seemed interested in learning. Complaining about the idiots in corporate or the flakes at PARC was easier. “So few of us accepted responsibility” for overcoming that language barrier, observed Bob Metcalfe, a co-inventor of the Ethernet at Xerox PARC, who went on to found 3Com.
Both history and geography may have contributed to the problem. PARC was established with money from a product monopoly it played no role in creating. And it was located in Palo Alto, California; Xerox, in Stamford, Connecticut.
GE’s Schenectady researchers, by contrast, were wedged in cheek by jowl with manufacturing, sales, and every other corporate function. And job No. 1 in the early days at the House of Magic was securing GE’s then-tenuous footing in the lighting business. It delivered big in 1910, with the tungsten-filament lamp—an innovation that conveyed decisive control of the lighting market to the mother ship.
The steady profits this ensured allowed the lab to widen its scope of exploration. But being thrust, very early, onto the front lines of the company’s main commercial battle also left a lasting cultural effect. The effort forced scientists to think like industrialists and industrialists to think like scientists. In the decades that followed, manufacturing people would routinely ask for lab input on this or that problem. And the researchers, to test the viability of this or that contrivance, weren’t averse to building small, working factories within the lab.
“The company is not primarily a philanthropic asylum for indigent chemists, and I must not let it become one even secondarily,” wrote the lab’s guiding hand, Willis Whitney—who, at the same time, was known for popping his head into offices to ask “Are you having fun?” There was, to be sure, plenty of friction between the commercial imperative on the one hand, and the joy of discovery on the other. But the magic lay in their uneasy coexistence—something GE understood and embraced.
The most worrying thing for Google, then, should be the lack of commercial imperative in so many of its operations. In that light, the most promising thing about Google is its reorganization into Alphabet—a step that will inevitably put pressure on its newly autonomous divisions to produce something besides giant losses. Nest (Google’s push into the automated home) and Fiber (its push to provide super-fast cable and Internet services) seem closest to becoming what Google’s executive chairman, Eric Schmidt, has called “real businesses.”
Steve Jobs once warned Larry Page, a Google co-founder, that Google was in danger of becoming Microsoft—a company caught, maybe perpetually, in the Xerox trap. Perhaps Alphabet is Google’s way of putting a gun to its own head and forcing itself to become something more than an interesting collection of rocks.