Creating mythologies of innovation – HP’s CoolTown

The stories told about innovation by those in technology development, their managers, and the broad range of commentators can constitute a form of mythology for a company, a sector or an industry. These are complex entities in and of themselves but the states of affairs to which they purported to represent are perhaps more nuanced and, of course, are complicated by such stories. I have been interested in one particular story, and the research project with which it is associated, from HP: ‘CoolTown’. I have conducted interviews with many of those involved in the research team for CoolTown and I have a paper in outline, which I hope to prepare for submission this summer.

One missing part of the account of CoolTown in my work had been the story from the point of view of Carly Fiorina, who was CEO of HP between 1999 and 2005. Her term of office loosely corresponds to the time frame of CoolTown. I have recently found a few paragraphs on CoolTown in Fiorina’s autobiography that I think are quite an interesting articulation of the ways in which innovation is figured and negotiated by management. I have copied out the relevant excerpt of Fiorina’s story below.

I had always admired HP Labs, so I decided my very first “coffee talk” would be with HP Labs employees. Coffee talks had originated with Bill and Dave in the early days, when Lucille Packard would bake cookies for the engineers and Bill and Dave would sit around and drink coffee with their first employees and talk about the business. The term was now used to describe any personal interaction between managers and their employees. I didn’t think it was all that remarkable to go first to HP Labs-after all, this was a technology company and innovation was our life’s blood. Bill’s and Dave’s offices, preserved perfectly to this day, are in the HP Labs building. Following in Henry Schacht’s footsteps, I’d made a practice to visit Bell Laboratories once a month while at Lucent, and I knew that such interactions were not only meaningful for the researchers, they also allowed me to keep abreast of the most important technological advances. I intended to visit HP Labs once a month as well.

The people of HP Labs thought my choice was remarkable, however. They were thrilled that I intended to visit on a regular basis. No one came to see them, and no one seemed to care what they were doing. They were viewed mostly as a corporate expense that the business didn’t need and couldn’t control. Innovation was touted as one of the HP values, yet no one measured innovation or invested in it or rewarded for it. The results were clear: HP was one of the few companies with a central research laboratory, yet it didn’t even qualify as one of the top twenty-five innovators in the world as measured by patent production.

On one of my first visits I was shown something called Cool Town. It was truly impressive. Cool Town later became the centrepiece of my very fist public speech about HP and my vision for the company. Cool Town was a lab where every person, place and thing had its own Web presence and identity. This meant that every person, place and thing was connected to, and could interact with, every other. It was the first glimpse of what I later came to call the “digital, mobile, virtual, personal” future-a future in which everything physical and analog can be represented in digital form; where anything can move anywhere because it exists it exists in cyberspace and can be networked; where virtual reality can someday be as compelling as physical reality; and where individuals can control myriad actions, events and information on their own behalf. How HP chose to use its assets at the dawn of the twenty-first century, the first truly digital, mobile, virtual, personal era in human history, would form the foundation of our strategy and our competitive advantage.

I could hardly contain my delight and excitement as seeing Cool Town. That was what HP could do. Cool Town took advantage of every capability we had, and it differentiated us from our competitors. I asked Dick Lampman, the head of HP Labs, how many other executives had seen it. “No one. We can’t get anyone to come.” I asked what was going to happen to Cool Town. “We’re supposed to be shutting it down next month. We can’t get any budget for it.” Every business manager was focused on his own product lines. Each manager was accountable for sustaining her current business. No one was rewarded for spending money on an uncertain possibility that might not improve present performance, even if it seemed important to the larger company. No one knew how to pool together the considerable resources of HP; everyone managed his or her own profit and loss statement. In essence, the entire management process at HP had become focussed on incrementalism. All of a manager’s time, and most of our considerable product development resources, were concentrated on the current product lines. If a product improvement required more investment than a particular business could afford in a year, it didn’t get done, even if the consequences over the long term were dire. We had lost our leadership position in UNIX as a result of thi management mind-set. We didn’t measure new product introductions, or new patent filings. I left Cool Town determined to save the project and change the way we funded our research efforts. And Dick Lampman would become a dedicated and effective change agent in that process.

From Fiorina, C 2007 Tough Choices. A Memoir, London: Nicholas Brealey. [pp. 176-178]

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