(Minneapolis, MN) Recently the New York Times reported that seven of the 10 fastest supercomputers in the world used code handwritten by one individual with no formal training in computer software design. The precursor to that striking style of innovation was created by Control Data Corporation, best known for their supercomputers in the 1960s. So effective was this startup company that in 1963, IBM’s chairman said that he failed to understand why IBM has lost their leadership position with supercomputers to a company with 34 people, including the janitor.
In a new book, The Eye for Innovation: Recognizing Possibilities and Managing the Creative Enterprise (Yale University Press) the former CEO and Chairman of Control Data, Robert M. Price, draws on 40 years at the forefront of the computer industry and illustrates how today’s business leaders and entrepreneurs can apply it. He explains the principles that transformed those 34 employees into a company with 45,000 people with revenues topping $1 billion in less than 14 years from its start. And by August of 1968, an initial investment of $10,000 grew to be worth $6.3 million.
Price argues that innovators are made, not born, and what made Control Data so successful was based on creating a culture of innovation using sometimes radical business techniques, that today’s companies can apply:
• Remove the Fear Factor: Seymour Cray is remembered as the “father” of the supercomputer. Yet, every one of Cray’s designs were initially a failure and had to be reworked. The development cost was $50 million in 1962 for one computer. Yet, his failures made Control Data an industry leader around the world.
• Outmaneuver Giants: When Control Data filed an anti-trust lawsuit against IBM, Control Data’s small team of lawyers was able to reach a settlement valued at $700,000 ($3.1 billion in 2004 dollars) that helped fuel Control Data’s growth. Control Data also helped its case by developing an information database system specifically for litigation support in antitrust actions.
• Innovation Needs to be Another “Line Item”: Policies and budgets for stimulating innovation are needed as much as other corporate planning. Boards and/or management need to audit innovation efforts and provide the personnel and finances to support those initiatives.
• Face the Ugly Facts: Control Data learned that innovation and determination cannot overcome all obstacles. In the mid 1980s when the company hit a financial and management crisis, Robert Price made the hard decisions to return the company to profitability by 1987, and the investment community responded with rising stock prices.
“While Control Data is no longer a household name, its legacy lives on. There were more that 30 spin off companies ranging from Arbitron, which measures radio and television audiences, to Digital Biometrics, which build digital fingerprint equipments, “said Price. “Control Data forged a heritage of innovation that lives on as a compass for the company of the future.”
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The Eye for Innovation: Recognizing Possibilities and Managing the Creative Enterprise By Robert M. Price, Published November 30, 2005 by Yale University Press
