Here's what nobody tells you about building an innovative culture—not everyone will thrive in it. (And that's okay.)

Fast Company

16 hours ago

Years ago, we had a manager named Ania running one of our publishing operations. She was well-liked, diligent, and responsible. Still, we felt the business needed a more creative spark, so we brought in a rising executive to take her place. Ania transitioned out gracefully and left the company on good terms.
Things turned out well. Our business thrived and Ania became a highly sought-after interior decorator, renowned for her creativity. The problem wasn't that she lacked any creative ability. The problem was that we weren't giving her the type of challenges that excited her. While she languished in our business, she thrived in a different environment.
The truth is that there is no such thing as a 'creative personality.' You set the conditions for the people in your organization to be creative. But as you set those conditions, you also narrow possibilities, making the environment fertile ground for some, but barren for others. Every leader needs to learn to make those choices. Culture matters. You need to shape it with care.
A Misfit Trying To Find His Place
Not unlike Ania, Chester Carlson didn't quite fit in. Unsatisfied with his work at the patent department at Bell Labs, he wrote down hundreds of ideas, the vast majority of which never amounted to anything. He was eventually fired and went through a few more jobs after that. Chester was a man looking for his place in the world.
There was one idea, however, that he kept coming back to. He worked on it for years, even while holding down a day job and going to law school at night. When his wife got tired of the putrid smells and explosions he made mixing chemicals in the kitchen, he moved his experiments to a second-floor room in a house his mother-in-law owned.
Eventually, he conjured up a working prototype in 1939, but it was far from a viable product. He continued to tinker and, eventually, teamed up with the Haloid corporation in 1946. Together, they refined his product further, but it still cost nearly ten times more than competitive machines. They tried to interest the great companies of the day—Kodak, IBM and GE—but all demurred.
Much like Chester himself, his invention didn't fit in. There just didn't seem to be a value proposition that would justify the cost of the machine. Yet Haloid's CEO, Joe Wilson, saw potential. He figured that once companies had the machines, they'd make more copies than they ever imagined.
Wilson also figured that Carlson's concept needed a name that would signal that it was something truly different and, after some deliberation, settled on 'xerography.' And that's how the Xerox Corporation was born.
The Rise And Fall Of A Business Model
Wilson saw the challenge as a classic chicken-and-egg problem. Since nobody had ever used a Xerox machine before, they had no idea how useful they could be and weren't willing to buy such an expensive product. At the same time, unless they bought the machines, they wouldn't ever use them and see the value.
But what if Xerox leased the machines for a fraction of the cost and charged per copy? Since customers weren't planning to make many copies, there was little risk in trying it out. Wilson was willing to bet that once the machines were installed, customers would discover needs they never knew they had. He calculated that the model would be profitable at 2,000 copies per month.
In 1959, Xerox launched its 914 copier, which became an instant hit. The technology made copying so much easier that, before long, customers were averaging 2,000 copies per day, instead of per month. Wilson's bet had paid off. Revenues grew at a 41% compound annual rate for over a decade, and the small firm soon became a titan of American business.
Xerox became laser-focused on optimizing its business model. Its profits depended on the number of copies printed and that became Xerox's key performance metric. Everything the company did—from how it designed its copiers to how it marketed and sold them—was rooted in that one simple principle.
Yet the company eventually became a victim of its own success. Japanese competitors like Canon and Ricoh began selling simpler, cheaper copiers, based on 20-year-old technology, that were easier to use and needed less maintenance. Rather than staffing a 'copy room,' companies could place these smaller, less expensive units on every floor.
Xerox was being disrupted.
Making Space For Misfits
It was around this time that the company hired a young engineer named Gary Starkweather, Much like Ania and Chester, he found he didn't fit in. Part of the problem probably had something to do with his background. Copiers were largely based on chemistry and Gary's interest was optics. In particular, he was excited about lasers.
But it was more than that. Gary wanted to build something outside the copier business and, in a way that was uncannily similar to Chester Carlson's situation, the higher-ups just didn't see how it fit in with their business. In fact, his boss actually threatened to fire anyone who worked with Starkweather on the project.
Eventually, he had enough. He marched into the Vice President's office and asked, 'Do you want me to do this for you or for someone else?' In the business culture at the time, this was considered unheard of behavior, clearly a firing offense. Yet fate intervened and destiny had something very different in store for Gary Starkweather.
As luck would have it, Xerox CEO Peter McColough was a bit of a visionary himself. He recognized the bind his company was in and wanted to shift the firm's focus to 'the architecture of information.' No one really knew what that meant, but a special unit, the Palo Alto Research Center (PARC), had been set up to figure it out.
As luck would have it, the researcher there had been developing a technology called bitmapping that would revolutionize computer graphics. What they were missing was a technology that could bring those graphics into the physical world.
An Organization Fit For Purpose
At PARC, Xerox created a culture where creative minds could thrive. It was there that Alan Kay invented object-oriented software, Bob Metcalfe developed Ethernet; and so many other technologies were created that became central to the age of personal computers. Some of the technology was spun off into companies, such as 3Com and Adobe.
It was also a place where Gary Starkweather, who had been a pariah in the old Xerox research lab back on the east coast, found he fit right in. The technology he had been developing became the world's first laser printer and brought the bitmapped graphics technology to life. As a product, it would prove to be so enormously profitable it would save Xerox.
Yet even the most innovative cultures aren't fertile ground for every idea. Two researchers at PARC, Dick Shoup and Alvy Ray Smith, were working on a new graphics technology called SuperPaint. Unfortunately, it didn't fit in with PARC's vision of personal computing. Much like Starkweather, the two were seen as outcasts and would go elsewhere.
Smith would eventually team up with another graphics pioneer, Ed Catmull, at the New York Institute of Technology. Later, they joined George Lucas, who saw the potential for computer graphics to create a new paradigm for special effects. Eventually, the operation was spun out and bought by Steve Jobs. That company, Pixar, was sold to Disney in 2006 for $7.4 billion.
Great leaders build cultures that are fit for purpose. That means you have to make choices. Inevitably, that means that some things—and some people—won't fit. And some will.