Interview: Tolga Kurtoglu, CEO, Palo Alto Research Centre (PARC)

There can’t be much doubt that Tolga Kurtoglu has one of the most exciting jobs in the world of technology innovation. After seven years in the wings, the new chief executive of the Palo Alto Research Center has taken up the challenge of ‘one of the brainiest buildings on Earth’.

PARC’s 47-year record, while peppered with both highs and lows, has ensured that when the history of the digital office is written, it will have a chapter all of its own. The company that played a central role in creating the technology behind laser printing, the Ethernet, the clickable mouse and graphical user interface is preparing for a new future. Only this time, it’s not going to be “inventing stuff and seeing if anyone wants to buy it”. Kurtoglu is spearheading a business model that will take technology to market in a more evolved way.

“Fundamentally,” he remarks, “PARC is all about finding different creative ways to solve technical and scientific problems. Being unconstrained and imaginative in your thinking plays a huge role in this.”

In January 2017, the 40-year-old Kurtoglu was named CEO of PARC to succeed Stephen Hoover, who had been promoted to CTO of the company’s parent, Xerox Corporation. Before his promotion Kurtoglu had been vice president of PARC as well as director of the System Sciences Laboratory, where he was in charge of research into artificial intelligence and machine learning. He explains he’s been with the company since summer 2010 in various leadership roles, managing the transition of technology out of R&D and into production-quality software and services. Before joining PARC, he’d been a research scientist at the Nasa Ames Research Center and a mechanical engineer at Dell Corporation.

“In my early years at PARC I worked as a researcher, later becoming a technical lead on a portfolio of projects. From there I moved more into business and strategy in a set of management roles.” This is important, says the Turkish engineer, because “what we really need to do to become a successful business is to understand customer needs as well as emerging technology, science and engineering so we can develop solutions for business”. More specifically in the fields of AI and machine learning: “we’re talking about next-generation design tools. We’re talking about smart manufacturing software, manufacturing automation software and condition-based maintenance software.”

Kurtoglu was never destined to be an engineering manager. He expected to pursue a career in science, and freely admits that he has no formal business management education. “I didn’t go to business college, but I did read my share of books on the topic and there was a lot of opportunity provided for me to get on-the-job training during my time at PARC.” In other words, Kurtoglu is the classic ‘accidental’ manager, a phenomenon where the brightest and best engineer gets promoted out of the technology zone based on the assumption that this propensity for high-achieving in one field is transferrable to another.

Logically speaking, the one set of circumstances does not necessarily follow the other, “and in my case I wish it had been more of a conscious decision. But there are a couple of things that come into play here. Although I was trained as a scientist and engineer, I have always had a personal passion to push beyond the technical delivery point. That is really important in the PARC culture, because a big aspect to my success here is based on my understanding of the business model.”

This model is based on the idea that generating technology is only part of the story. “It is necessary, but not sufficient, because we then need to go and create a business out of that, which means we need to push our R&D output to market and to make sure there is a transition into real use. The way to do that is to orchestrate people.”

From a management point of view there is also a slightly unorthodox challenge. Of 180 scientists and engineers at PARC, more than 90 per cent are PhD-level educated, meaning “these aren’t necessarily people that need to be motivated. They are already motivated to work on problems they find interesting. To be successful as a manager in this area you need to have a deep technical knowledge, because that’s where respect comes from. But you still need to have the energy to push people beyond, to solve problems and move on to the next hard problem. Then you need to understand the end-users. You need to get out there and interact with clients and customers. This is something I iterate to everybody: we need to listen to what people around us are saying so we can make market-informed decisions based on feedback, rather than curiosity-driven decisions.”

Kurtoglu adds that the ability to manage in a highly creative, largely unstructured environment brings its own challenges. There is a “fairly flat” hierarchy at PARC, where two-thirds of the payroll is scientists and engineers. “They are grouped into lab structures that focus on a certain set of technological competencies, but there are not too many of them. Also, with the exception of a small satellite office, we are all on site in one building.”

To make things work smoothly, “we look to attract a certain type of PhD that I call the ‘entrepreneurial scientist’. It’s important to have this mindset because we are highly collaborative and we don’t really have established boundaries between technology groups. We are trying to solve 21st-century problems, and so part of our value proposition is to have multi-disciplinary teams together interacting with different perspectives on the same problem.”

By way of example, Kurtoglu explains how PARC works with major US government agencies. “They come to us with very high-​level problems with a pain point definition they leave open for people to come to them with solution proposals. The technical process for us to address such problems is to assemble a set of people, but that’s not top-down. We broadcast that there is an opportunity that we want to go after and let people organically organise themselves. You would be amazed what happens.”

In initial brainstorming, there will be an assembly of up to 20 experts in as many fields making a preliminary assessment of the issue in hand. “Ideas get bounced around, and it is really interesting how the dynamic evolves. It is almost self-delivering. We don’t say something looks like it doesn’t need a materials scientist, for example. People sign in and out depending on their own perception of what’s needed. By the end of the process there will be a core group of three or four people, one of which will assume the technical lead.”

The Palo Alto Research Center, once called Xerox PARC, was founded in 1970. As its former name suggests, its initial mission was to be the R&D centre for Xerox. It was established in California, explains Kurtoglu, “so it would be as far away from the company’s east coast Connecticut head office as possible”. The reason for locating PARC in the heart of Silicon Valley, while partially to create the illusion of independence, was mostly because that was where you went if you wanted to assemble a team of brilliant scientists. “The idea was to create an environment where you could think about technological problems away from the immediate concerns of the corporation.”

Kurtoglu says the research centre was given the specific directive of inventing the ‘office of the future’. “If you think about it retrospectively, the kinds of innovations that came out of PARC in the formative years are reflective of that. We looked at networking and personal computing. We looked at the mouse and the graphical user interface. We looked at Ethernet and the laser printer. A lot of the things we tend to take for granted today in terms of our office lives came out of PARC. We are very proud of our history of being one of the major players in bringing about the digital transformation.”

In reflecting on such a mandate, the question will always be whether the future arrived on time and if it appeared in the form that had been predicted. “In some cases it has, and in others it hasn’t. There are examples in which the early prototypes that came out of the creative thinking of the PARC pioneers simply didn’t materialise in the way they were anticipated.”

Kurtoglu pauses to talk about the Parc Pad, dating from 1992, which he describes as an “ugly version of the iPad or other tablets. But it was invented decades before tablets became mainstream in the marketplace.” Clearly, the Parc Pad hasn’t entered into the public perception of life-enhancing technology. Yet was it a failure? “For an invention to take off, a number of things have to come together. It’s not just the technology, or showing the feasibility. You need to evaluate the need in the market and the value it will generate. Then there are cultural aspects of the adoption of those technologies.”

Kurtoglu regards the Parc Pad as an important parable “because it is an example of how we got to where we are today. When we look at the past we can see that PARC generated quite a bit of value for Xerox, especially with laser printing. However, there are also a lot of things that really didn’t live up to potential.”

It was this realisation that led the company to pivot to the “completely different business model that we have today”. Despite being – since 2002 – a wholly owned subsidiary of the Xerox Corporation, PARC is arguably more correctly called ‘PARC, a Xerox company’.

This new model means “today we don’t just develop technology for Xerox. We’ve also changed in the sense that we no longer invent things and hope for them to be taken up. We said to ourselves we needed to develop our technical capabilities with business considerations in mind and switch to open innovation, where we drive a lot of our decisions based on real market feedback. That’s where our social scientists come into play. We have IP experts and user experience experts that are highly embedded from the very beginning of the process, from where they take the technology options to the market.”

While admitting PARC has made huge gains in digital innovation in the past four decades, Kurtoglu is confident there are “plenty of opportunities in different areas. Nothing has really changed fundamentally as we are still in the business of envisaging the future. We are still creating future options for our commercial and government clients. In a sense, we are auditioning the future for them. What we are doing is examining their problems in order to predict what their future might look like, and then devising technology to solve that. We are probing that and evaluating certain areas.”

These areas include a portfolio in energy, specifically batteries. “We’re looking at how to manage battery life, how to make safety and performance better, as well as developing production and manufacturing techniques. We are looking at materials with applications in self-driving cars. We’re looking at the intersection of better managing energy assets in the IoT space. Being in the Valley, we’re active in AI and machine learning and their intersection with IoT.” Kurtoglu explains that one of the frontiers being addressed is that of real-time interaction between the cyber and the physical world.

Despite commitment to the new streamlined business approach to bringing innovation to a prepared market, Kurtoglu admits the chances of success are limited unless there is the freedom of the imagination to allow unconstrained thinking to solve problems.

“A lot of our dialogues start with questions like ‘can that really work?’. They also start with statements like ‘that looks really, really difficult to do’. But you progress the conversation to the point where you can start to see a solution. Imagination really plays a role, but not in a fuzzy way. In a disciplined way. This is something that I call ‘disciplined entrepreneurship’.”

Kurtoglu makes progress look easy. “There are only two things to remember. First is that you are solving the right problem. Second, you need to make sure you are solving it the right way. This will ensure the right outcomes for our business.”