Here is an excerpt from an article written by Teresa Amabile and Steve Kramer for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

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A few weeks back, we saw firsthand a hotbed of innovation in a place that many observers had long ago given up on. Its resurrection convinces us that other organizations can do the same by creating a culture of consideration, coordination, and communication, and marrying that culture to a responsive business model.

That resurgent hotbed is PARC (formerly Xerox PARC), the Palo Alto Research Center famous for inventing the graphical user interface, the mouse, the first user-friendly personal computer, the laser printer… and then letting most of it slip away. Characterizations of what happened in the early years of PARC (founded in 1970) range from strategic fumbles to “wild geysers of creative energy” perfectly appropriate to early-stage invention, but those early years didn’t yield the stream of profitable innovations that Xerox had imagined. PARC fell off the innovation radar screen.

Over the past several years, PARC — spun off as an independent, wholly-owned subsidiary of Xerox in 2002 — has reinvented itself as a font of innovation for Xerox and a variety of other organizations worldwide. It has delivered a stunning array of software and hardware innovations to global corporations, startups, and the U.S. government, and it does a brisk business in IP licensing.

How is it that this place, widely ridiculed 20 years ago, has revived? When we visited, we not only saw pieces of PARC’s storied past, but we saw what happens there today, how it happens, and how innovation continues to thrive. Part of the magic lies in the current business model which, as Lawrence Lee, director of strategy, explained to us, relies on partnering closely with customers, inventing a minimally viable product, and collaboratively iterating from there, based on market feedback. But much of the magic arises from the PARC culture which, like the original, nurtures practical creativity in three key ways.

[Here are the first two. To read the complete article, please click here.]

First, consideration for people and their ideas. Scott Elrod, now a PARC vice president and head of the Cleantech Innovation Program, described how motivated he felt when, as a relatively junior researcher, he was personally given an excellence award by a top manager at the end of a particularly challenging project. This recognition, completely unexpected, made a lasting impression. People are driven to do their creative best when they know that they, their ideas, and their work are valued by the organization.

Second, coordination. Systems, resources, and processes at PARC are set up to facilitate fruitful collaboration between individuals and teams internally, and with customers and partners externally. At PARC, projects often cut across two or more of the four research labs: computing sciences, intelligent systems, hardware devices, and electronic materials. Divisional barriers are low, flexibility is high, and people have the time and space to debate and develop ideas with colleagues. As a result, collaboration is frequent, satisfying, and generally successful. PARC Principal Scientist Victoria Bellotti, describing a major team effort to create a system for a Japanese client, said, “I felt very proud of myself — and all of us.”

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The enduring PARC culture of excitement about and support for invention, coupled with its new business model, makes for a winning combination. It’s not something that can be achieved overnight — sometimes it takes decades — but it’s worth the effort.

Have you seen a rebirth of innovation in your own work experience? How did it happen? How long did it take?

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Teresa Amabile is Edsel Bryant Ford Professor of Business Administration at Harvard Business School. She researches what makes people creative, productive, happy, and motivated at work. Steven Kramer is a psychologist and independent researcher. They are coauthors of The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work (Harvard Business Review Press, 2011).

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