What Made Bell Labs So Successful? (msn.com)
- Reference: 0181168336
- News link: https://tech.slashdot.org/story/26/03/29/0249241/what-made-bell-labs-so-successful
- Source link: https://www.msn.com/en-us/money/executive-leadership-and-management/what-the-legendary-bell-labs-can-teach-us-about-innovation/ar-AA1ZBXZc
But what was the secret to its success? he asks in [2]a new article for the Wall Street Journal . Start with its lucky arrival in a "problem-rich" environment, suggests Arno Penzia, winner of one of Bell Labs' 11 Nobel Prizes:
> It was Bell Labs' responsibility, in other words, to create technologies for designing, expanding and improving an unruly communications network of cables and microwave links and glass fibers. The Labs also had to figure out ways to create underwater conduits, as well as switching centers that could manage the growing number of customers and escalating amounts of data.... Money mattered, too. Being connected to AT&T, the largest company in the world, was an advantage. The Labs' budget was enormous, and accounting conventions allowed its parent company to make huge and continuing investments in R & D. The generous funding, moreover, allowed scientists and engineers to buy and build expensive equipment — for instance, anechoic chambers to create the world's quietest rooms...
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> The most fortunate part of Bell Labs' situation, however, was that in being attached to a monopoly it could partake in long-term thinking... Without competition nipping at its heels, Bell Labs engineers had the luxury of working out difficult ideas over decades. The first conceptualization of a cellular phone network, for instance, came out of the Labs in the late 1940s; it wasn't until the late 1970s that technicians began testing one in Chicago to gauge its potential. The challenge of deploying these technologies was immense. (The regulatory hurdles were formidable, too....)
The article also credits the visionary management of Mervin Kelly — who fortunately also "had access to funding in a decade when most executives and universities didn't" to hire the brightest people. (By the early 1980s Bell Labs employed about 25,000 researchers, technicians and support staff, with an annual budget of $2 billion — roughly $7 billion in today's dollars.) "The Labs' involvement in World War II suggested to Kelly that an exciting postwar era of electronics was approaching, but that the technical problems would be so complex that they required a mix of expertise — not just physicists, but material scientists, chemists, electrical engineers, circuitry experts and the like."
> At Bell Labs, Kelly would sometimes handpick teams and create such a mix, as was the case for the transistor invention in the late 1940s. He came to see innovation arising not from like-minded or similarly trained people conversing with each other, but from a friction of ideas and approaches. It meant hiring researchers who had different personalities and favored a range of experimental angles. It also meant personally designing a campus in Murray Hill where departments were spread apart, so that scientists and engineers would be forced to walk, mingle and engage in serendipitous conversations and debate ideas. Meanwhile, under Kelly, the Labs focused on hiring people who were deeply curious, not just smart. Kelly saw it as his professional duty to do far more than what was expected, with his laboratory and vast resources, to create new technologies...
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> The breakup of AT&T's monopoly, which led to a steady shrinking of Bell Labs' staff, budget and remit, shows us that no matter how forward looking your employees and managers may be, they will not necessarily see the future coming. It likewise suggests that technological progress is too unpredictable for one organization, no matter how powerful or smart, to control. Famously, Bell Labs managers didn't see value in the Arpanet, which eventually led to today's internet.
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> And yet, for at least five decades, Bell Labs created a blueprint for the global development of communications and electronics. In understanding why it did so, I tend to think its ultimate secret may be hiding in plain sight. The secret has to do with Bell Labs' structure — not only being connected to a fabulously profitable monopoly, but being connected to a company that could move theoretical and applied research into a huge manufacturing division that made telecom equipment (at Western Electric) and ultimately into a dynamic operating system (the AT&T network)... Scientists and engineers at the Labs understood their ideas would be implemented, if they passed muster, into the huge system its parent company was running.
Bell Labs racked up about 30,000 patents, according to the article, and celebrated its 100th anniversary last April.
It is now part of Finland-based Nokia.
[1] https://amzn.to/4sIcKN0
[2] https://www.msn.com/en-us/money/executive-leadership-and-management/what-the-legendary-bell-labs-can-teach-us-about-innovation/ar-AA1ZBXZc
Cash from a regulated monopoly (Score:5, Interesting)
Because of the regime it operated under, the ATT/Bell labs had an internal "R&D tax", which allocated at least 1% of the gross revenues of ATT & related companies to Bell labs R&D. This was the minimum, but often typically ATT invested in R&D more.
With a guaranteed 8% "fair return", which was what shareholders were entitled to, and without the pressure to report "growth potential" to "investors" every few weeks, they were able to put resources into developing actual growth potential. Besides, it was free money, as it was fully tax deductible.
In exchange, they made their patents public for everyone else.
That is, because of the regulatory regime it was operating like a government-funded research institute.
Bell vs. Academic R&D (Score:5, Interesting)
Today long-term tech development is heavily done in an academic setting, and while there are some companies that do think long-term (Qualcomm and other telecom companies tend to be on 5-10 year tech cycles, aerospace is on 10-20 year cycles, biotech and life science is on 10-20 year cycles), generally a lot of it has shifted to academic circles and universities now. Unfortunately, I think this has put a damper on things.
One thing Bell Labs did do correctly was by being part of a company, they had the needs and desires of a market and consumers to act as a pull, a "Why" so to speak. Even with some of the more speculative research they did, there was always an eye towards how would this get deployed to a market as a product and thus become a technology available to the broader world. Academia does not have this; most academia lives in a bubble. WHen you read academic papers, they all follow the same outline: 1) there's a problem in the world, 2) a new technology is hypothesized to solve it, 3) here is an experiment and data to show it cna solve it, and 4) that problem might be solved by this new technology.
While generally most papers I read have mid- to good- experimental design and data and decent conclusions, it's the first part about a problem that is almost entirely made up from nothing. In my field at least, when I read an academic paper that is supposed to relate to my field, the problem they are identifying isn't even a problem at all; it has no relevance to the field or what people want. As such the technology is funded, experiments are done, a paper is published, and it dies on the vine because it turns out no one wants it because it was never a problem in the first place.
It's noticeable that when it comes to silicon and chip-based technologies, academia does very little; the silicon industry basically took it all over through the formation of SRC. SRC unfortunately just got gutted by the Trump administration, but for a long time SRC and the industry ran all of the new technology development; there wasn't anything like chip architectures or new interconnects or anything coming out of academia at all; it was all industry led and academia only did niche stuff like graphene and organics and the like.
Industry at least provides a pull for a new technology academia has to push it and it rarely results in anything useful. It's different for different fields, but in my field at least I haven't found a single university program that's even remotely relevant; the Bell Labs model is sorely missed.
Typo in summary (Score:4, Informative)
It should be [1]Arno Penzias [wikipedia.org], not Arno Penzia.
[1] https://en.wikipedia.org/wiki/Arno_Allan_Penzias
WW2 can do attitude? (Score:2)
The people working in the labs at the time would have grown up post WW2 when there was still very much a can-do attitude in the west, now , not so much. I'm not saying that was the only reason but its certainly one of them.
Can I edit articles? (Score:2)
I don't know how to edit posts. I can only upvote/downvote and comment. But in this case, you should get the name Penzias. He's a Nobel Laureate.
An amazing place (Score:2)
My science teacher and I were the guests of Bell Labs in, I think, 1965, before I graduated high school. Still remember the computer memory with a gas laser burning spots on a chilled slab of material. Might have been a great place to work if my life had let me go down that path. Still have the pictures someplace their publicist took. Memories...
Did the author miss the biggest issue? (Score:5, Insightful)
In the room? I actually got a little angry reading that blurb. I was alive when Bell Labs collapsed and I remember the sequence of events very clearly. The number one ingredient that made bell labs a massive success was tax law.
For most of the 1900s, research was tax deductible for companies. Companies could run research labs for the benefit of both themselves and larger society, and Uncle Sam would give them a tax break. The result was a huge ecosystem of top tier corporate labs that bridged the gap between ivory tower research and application. Bell labs was just one of many. There was also GE labs, PARC, IBM labs, Xerox, Kodak. Im probably forgetting a few of the big ones as well. Then, the voters decided that they didnâ(TM)t like giving companies a tax break for that. I dont remember if it was liberals or conservatives who changed their minds. Maybe both. As soon as that tax break was gone, the managers at each company started requiring each of their lab divisions to actually turn a profit. Every single one of them was closed within a few years, or hung on as a tiny ghost of what it used to be.
Re: (Score:1)
The tax deduction was changed as part of Section 174 under the Tax Cuts and Jobs Act (TCJA) of 2017. This was a bill passed by the then Republican congress (both houses) and signed by Trump.
Re: (Score:2)
Was this just the final nail in the coffin of something that started earlier? It seems like Bell Labs started heading downhill long before 2017. I worked for AT&T when they split off Lucent, and even back then, Bell Labs didn't carry the R&D weight it used to.
diversity of thought and approach (Score:3)
> He came to see innovation arising not from like-minded or similarly trained people conversing with each other, but from a friction of ideas and approaches. It meant hiring researchers who had different personalities and favored a range of experimental angles.
Intellectual diversity makes for better teams.
\o/ (Score:1)
> But what was the secret to its success?
Micromanagement?
'Agile' ?
Slides and table football?
Did I win?
Is that because of the monopoly? (Score:1)
> The most fortunate part of Bell Labs' situation, however, was that in being attached to a monopoly it could partake in long-term thinking... Without competition nipping at its heels, Bell Labs engineers had the luxury of working out difficult ideas over decades.
Was it the monopoly that made the difference? Or was it simply management smart enough to not only not kill the goose, but also to feed it? They had wins, they got more funding, they had more wins, repeat until they no longer got more funding and stopped getting wins. What's probably more important than why they succeeded is what happened at the end .
Re:Is that because of the monopoly? (Score:5, Interesting)
I worked for a company that found its roots in the original RCA labs. The boss was a stubborn guy that navigated his own course. A lot of executives came to lecture him. He relied heavily on IP and royalties which turned down a lot of customers. Evil, according to his superiors.
He made it work. 2008 economic crisis hit. Contracts halved. We ran mostly on royalties for that year. Little to do, so he encouraged us to do research. Anything. A lot of BS came out of it, but also a small gem here and there that would later be useful and one thing became a product.
Moved to a company that did not have royalty income. Most projects were fixed cost, meaning sales people had to hunt for contracts to keep the pipeline filled. Once heard the boss say: "We never have exactly the right amount of projects. I prefer too much projects instead of one too few." My god, what did they drag in when things went slow. Overpromissing our capabilities, impossible projects, unrealistic deadlines, ... The worst part? They were actually the nice guys. Other companies did far worse. It was an eye opener. Lot of crap companies out there hunting for money, predator style, little care for the product.
Anyway, no time to optimize work flows, no time to research and criticize obviously flawed procedures, just get the job done in the specified amount of days or else... The fun part? We were pretty good compared to our competitors. Only mediocre compared to the best though.
The bad part? I noticed that companies that did their due diligence, usually were unable to finish or sell their product. It usually got cancelled. The sloppy ones? They sold their junk successfully. I observed too few projects to make it significant, but the pattern was there.
Successful business? It is not a straight line, I can tell you that.
Re: (Score:2)
I think it's arguing that given their unassailable position with their monopoly, they had the freedom to focus on long-term technology development. I do believe competition and the need to report quarterly earnings creates incentives and pressures to focus on more short-term thinking, but I don't think having a monopoly is the only thing that would create fertile ground for more long-term tech development, nor was it the only factor for Bell Labs as the article points out leadership with vision was a key f
Re: (Score:1)
Yep. There's a parallel between the busy-work culture so popular these days - there's little time to pause for reflection so the deep work doesn't get done and that's where the true insights lie.
Re:Is that because of the monopoly? (Score:4, Interesting)
You are assuming a lot about competition that did not exist. The justification for the AT&T monopoly and Western Electric monopsony was the 1913 consent decree giving it the goal of creating what was known as "universal service." That was still the mantra when I joined BTL in 1977. That goal ended with AT&T divesting itself of its operating phone companies in 1984. That was so it could enter the computer business and compete with IBM. I saw first hand the goal of universal service was such an important doctrine that the basic model of the phone network based on circuit switching was impossible to give up and also made it impossible to recognize the Arpanet for what it was becoming and what that implied about the future. Even the early Arpanet was evident to a lot of technical staff but the success of the existing business structure is what shaped decision makers thinking.
Taxes (Score:2)
Taxes made them successful. We used to have super high taxes for the wealthy and corporations. This created a use it or lose it mentality among businesses because they couldn't just pocket all the money themselves because it would be taxed up the wazoo at a certain point. There were ways around taxes even back then but they weren't nearly as effective as they are now where you have billionaires paying an effective tax rate of 0%
Also stock BuyBacks used to be illegal. Stock BuyBacks mean that companies d
Re: (Score:1)
Certainly the funding from the monopoly allowed the Labs to hire the best and turn them loose on problems that didn't have immediate potential. This translates to "get a bunch of PhDs in a room and turn them loose, pretty soon you have a world-beating operating system that will last for decades"
There are books by Labs people which give a pretty good picture of the atmosphere. Jon Gertner's "The Idea Factory" is one, Michael Noll's "Memories: A personal History of Bell Telephone Laboratories" is another.
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