Bell Labs is one of the few examples of an innovation org that was aligned with its money factory

Innovation orgs need to be aligned with their money factory and arguably one of the reasons behind Bell Labs’s outlier success was that it managed to have a broad scope and long time scale that were both still aligned with AT&T.

At the end of the day AT&T’s goal was to maintain its monopoly and increase its business. In order to do that, it needed to enable people to make more, better calls.

“The System” of AT&T had such an expansive scope that it actually benefitted from the whole spectrum of activity happening at Bell Labs. Everything from information theory to novel materials directly fed back into AT&Ts core business. More cables are expensive so information theory actually helps people make more calls. The faster you can switch, the more calls you can route so semiconductor switchers directly help with the goals.

Additionally, Bell Labs and AT&T had timescale alignment thanks at least in part to AT&T’s monopoly. The monopoly enabled Bell Labs to plan on multi-decade timescales because they didn’t have to worry about a competitor coming along tomorrow.

AT&T maintained their monopoly only with tacit approval from the government. This approval rested heavily on Bell Labs’ output - both continuous improvements to A&+Ts offerings and open licenses from the lab. Regulation drove many of Bell Labs’ actions.

Between the cost reductions and monopoly maintenance, Bell Labs was actually addressing existential risks to AT&T. Alignment requires existential threats. Even R&D labs that are building new product lines within the scope of a company’s actives rarely address existential threats to that extent.

This alignment in both timescale and focus-scope between an innovation org an its money factory. See §Startup Constraints, §Corporate R+D Constraints, §Philanthropy and Non-Profit Constraints, and §Academia Constraints for all the lovely ways the misalignment can happen.


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