Knowledge Workers Create IT for Knowledge Workers
Bell Labs – named after AT&T founder Alexander Graham
– employed 25,000 employees at its peak, including 3,300 PhDs.[1]
Bell Labs was a paragon of knowledge work, a place where people were paid to
think. In 1947, the lab produced two innovations that became the paragon of
information technology.
The first innovation was conceptual. Claude Shannon coined
the word “bit” in an attempt to do something no one had ever done. His was the
first attempt to quantify information. With the right pattern, 1 and 0 could be
used to describe any letter or number (a combination that would come to be
known as a byte). This was interesting.
Then, in that same year, Bell Labs produced another
innovation that would – when coupled with Shannon’s bit – enable the computer.
Three of its employees would eventually share a Noble
Prize for inventing a product Bell Labs thought might might “have far-reaching
significance in electronics and electrical communication."[2]
The transistor was a simple replacement for the bulky vacuum tubes and given it
could easily be turned on or off, it could easily be made to represent a 1 or 0
– a bit.
By the 1960s, multiple transistors were joined together on
a computer chip, the heart of a computer. No invention would better define
information technology.
Yet even with the advent of this new technology, something
was missing. Technological invention alone is rarely enough; to make real gains
from the computer chip required social invention, a change in corporate
culture.
One of the three co-inventors of the transistor began a
company to exploit this new technology.
William Shockley (1910-1989) was co-inventor of the
solid-state transistor and literally wrote the book on semiconductors that the
first generation of inventers and engineers would use to advance this new
technology. He had graduated from the best technical schools in the nation (BS
from Cal Tech and PhD from MIT), and was the epitome of the modern knowledge
worker.
Shockley hired the best and brightest university graduates
to staff his Shockley Semiconductor Laboratory. Yet things were not quite right.
It was not technology, intelligence, or money that his company lacked. It was
something else.
To answer what it was leads us to the question of why
information has so much value.
One of the beliefs of pragmatism is that knowledge has
meaning only in its consequences. This suggests that information has value only
if it is acted upon. Information that is stored in secret has no consequences.
By contrast, information that informs action needs to be both known and acted
upon. The more people who have access to this information and can act on it,
the more value it has.
What was missing from Shockley’s approach to this brand
new technology was a management style that took advantage of an abundance of
information. He did not like to give up control or information but that was
exactly what this new computer chip he’d helped to invent was perfectly made
for. Largely because of this, it was not Shockley who would become a
billionaire from computer chips. Instead, it would be a few of his employees.
The Summer of Pocket Protectors
1968 was the kind of year that would have made even
today’s 24-7 news coverage seem insufficient. In January, the North Vietnamese
launched the Tet offensive, making it all the way to the U.S. Embassy in
Saigon; this might have been the first indication that those unbeatable Americans
could be beaten. Civil rights demonstrations that devolved into deadly riots
were the backdrop for Lyndon Johnson’s signing of the Civil Rights Act. Martin
Luther King, Jr. and Robert Kennedy - iconic figures even in life - were
assassinated within months of each other. The musical Hair opened on Broadway
and Yale announced that it would begin to admit women. For the first time in history,
someone saw the earth from space: astronauts Frank Borman, Jim Lovell, and
William Anders became the first humans to see the dark side of the moon and the
earth as a whole, an image that transcended differences of borders and even
continents. Any one of these stories could have been enough to change modern
society. Yet in the midst of all these incredible events, two entrepreneurs
quietly began a company that would transform technology and business, a company
that would do as much to define Silicon Valley as any other.
Gordon Moore (b. 1929) and Robert Noyce (1927-1990) founded
Intel in July 1968. Moore gave his name to “Moore’s Law,” a prediction that the
power of computer chips would double every eighteen months. Here was something
akin to the magic of compound interest applied to technology or, more
specifically, information processing.
Moore and Noyce had originally worked for Shockley, but
they left his laboratory because they did not like his tyrannical management.
They then went to work for Fairchild Semiconductor, but left again, because,
“Fairchild was steeped in an East Coast, old-fashioned, hierarchical business
structure,” Noyce said in a 1988 interview. "I never wanted to be a part
of a company like that."[3]
It is worth noting that Moore and Noyce did not leave
their former employers because of technology or funding issues. They left
because of differences in management philosophy.
Once when I was at Intel, one of the employees asked if I
wanted to see the CEO’s cubicle. Note that this was an invitation to see his
cubicle, not his office. We walked over to a wall that was - like every other
wall on the floor - about five feet high, and I was able to look over the wall
into an office area complete with pictures of CEO Craig Barrett with people
like President Clinton. In most companies, one can quickly discern the
hierarchy based on dynamics in a meeting. The level of deference and the ease
of winning arguments are pretty clear indicators of who is where in the
organizational chart. By contrast, I have never been inside a company where it
was more difficult to discern rank than Intel. Depending on the topic,
completely different people could be assertive or deferential. One of Intel’s
values is something like “constructive confrontation,” and this certainly
played out in more than one meeting I attended. When a company makes
investments in the billions, it cannot afford to make a mistake simply because
people have quaint notions about respect for authority. Intel’s culture seems
to do everything to drive facts and reasons ahead of position and formal
authority. This egalitarian style probably traces back to its founders rejection
of the management style of their former employer, Shockley.
Shockley Labs no longer exists. Intel has a market cap of
more than $150 billion.[4]
Intel’s net profit in the most recent year was over $11 billion, and it employs
more than 100,000 people worldwide. Moore and Noyce’s open culture made a
difference.
Information technology has little value in a culture that
hoards information. Information technology makes sense as a means to store,
distribute, and give access to information and has value as tool for problem
solving and decision-making.
The pioneers of information technology, like Moore and
Noyce, understood this and realized - at some level - that it made little or no
sense to create hierarchies where information was held and decisions were made
at one level and people were merely instructed at another. The knowledge worker
needed information technology as a basis for decisions and action. Before 1830,
up until the time of the railroad, the information sector of the American
workforce was less than 1 percent.[5]
By the close of the 20th century, nearly everyone seemed to need technology for
storing and processing information.
By paying double typical wages, Henry Ford created a new
generation of consumers for his car. Moore and Noyce did not just help to create
information technology; they helped to popularize a management culture that took
advantage of this amazing new technology.
[1]
Time, Jon Gertner, “How Bell Labs Invented the World We Live in Today,” March
21, 2012. http://business.time.com/2012/03/21/how-bell-labs-invented-the-world-we-live-in-today/
[3]
Daniel Gross, ed., Forbes: Greatest Business
Stories of All Time (New
York: John Wiley &
Sons, 1996), 251.
[4]
This taken from stock market quotes at end of 2014.
[5]
Beniger, The Control Revolution, 23.
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