Contents
On March 1, 1973, a computer called the Alto runs for the first time in Palo Alto. It has a graphical interface, a mouse and a network connection. About 2,100 are built. Not one is ever sold commercially. The story behind it is about one of the best teams computing has ever seen – and about what that team lacked. An example of the Team Principle of External Relationships.
A Dream Team 3,000 Miles Away
Situation
On July 1, 1970, Xerox founds the Palo Alto Research Center, PARC for short. The idea comes from chief scientist Jack Goldman; the physicist George Pake builds up the center. It is located in California, about 4,800 kilometers from corporate headquarters on the East Coast. Bob Taylor shapes the Computer Science Laboratory, first as associate manager and from 1977 as its head. He brings together people such as Charles Thacker, Butler Lampson and Alan Kay.
Connection to the team principle
The Team Principle of External Relationships says: A team that only looks inward loses what it needs from outside. The distance was intentional – it gave the researchers freedom. But it came at a price. Between the lab and the people in the company who decided on products, sales and money lay an entire continent. Protection from headquarters and a connection to headquarters are two different things. PARC had only the first.
The Alto: Finished and Unsold
Situation
The Alto combines what every office computer would later have: a bitmapped display, a graphical interface, a mouse, a word processor that shows on screen what will later appear on paper, and a network connection via Ethernet. Add to that the laser printer and the Smalltalk programming language. Of the Alto, 120 units of the first model and about 2,000 of the second are built. They are used at Xerox itself and at universities. The machine never reaches the market.
Connection to the team principle
Internally, almost everything was right: talent, collaboration, results. What was missing was not ability. What was missing was an internal customer – someone inside the company to take the work up. In a 1992 study of 45 product development teams, Deborah G. Ancona and David F. Caldwell distinguished three kinds of external activity: championing the team’s project upward, coordinating laterally with other departments, and scouting the environment. According to their findings, it was the type of external communication, not the amount, that predicted performance – and isolated teams did poorly. That is a finding from one sample, not a law. But it describes the gap at PARC quite precisely: the ties to the scientific community were strong, those to the decision-makers in the company weak.
December 1979: The Visitor Sees More
Situation
In 1979 two groups from Apple visit PARC. Steve Jobs comes along on the second visit, in December. The visit is part of a deal: before Apple goes public, Xerox is allowed to buy 100,000 Apple shares for $1 million. Larry Tesler demonstrates the technology. The researcher Adele Goldberg fights the demonstration for hours, fearing the team is giving away too much. The demonstration goes ahead anyway. Later, several PARC developers move to Apple. Apple develops the ideas further – menu bar, double-click, overlapping windows – and launches the Lisa in 1983 and the Macintosh in 1984.
Connection to the team principle
In a single afternoon, an outside guest recognized what the company’s own leadership had failed to turn into a product in years. That is the bitter side of the principle: if a team has no bridge to its own organization, its knowledge finds another way out – through visitors, and through employees who leave. At the same time, Adele Goldberg’s resistance shows that shielding alone does not help. Wanting to protect the knowledge was understandable. But there was no one in the company to whom the team could have effectively passed it on.
The Star: Late and Expensive
Situation
In 1981 Xerox brings a computer of its own to market, the Star. It is expensive; depending on what is counted, sources cite about $16,000 per workstation or about $100,000 for a complete system. Only about 25,000 units are sold. In 1982 David Liddle and Charles Irby found their own company, Metaphor. Robert Metcalfe, the inventor of Ethernet, has also left Xerox and gone his own way.
Connection to the team principle
If you seek contact with customers and sales late, you end up with a product that is technically brilliant and misses the market. And a team whose work has no impact within its own organization will, in the long run, lose its best people.
The Other Side of the Ledger
Situation
The story that Xerox gave away the future is an oversimplification. The company itself marketed the laser printer with success. Apple did not copy in secret; it was shown the technology with permission and developed it further on its own. And whether the failure lay with the research team or with corporate management is still disputed today. In 2002 Xerox spins PARC off as a subsidiary; in April 2023 it donates the center to the research institute SRI International.
Connection to the team principle
The laser printer is the proof within the story: where an invention connected to the company’s core business, the path to the customer worked. The principle cuts both ways. A team has to champion its work. And leadership has to make the trip and listen. A bridge has two ends.
Key takeaways
Key Lessons
- Ask yourself: who in your own organization has to be convinced of your team’s work for it to have an impact? Do you know these people personally?
- Appoint someone to report upward regularly and champion the team. Good results do not speak for themselves.
- Bring in sales, customers and neighboring departments early – not only once the product is finished.
- Use distance, but count its cost. If your team works in a protected space, it needs established routes back into the organization all the more.
- If you are the one in charge: go to your best teams before an outside visitor does.
Summary
Internally, Xerox PARC was a dream team; externally, it was almost unconnected. It invented the modern personal computer but had no solid bridge to the people in the company who decided on products. A visitor grasped its value faster than the company’s own leadership, and many of the best people left. The laser printer shows that things could have gone differently. As a counterexample, the story makes the Team Principle of External Relationships clear: a team that only looks inward loses what it needs from outside – even when that “outside” is its own company.