Marc Stefik is interviewed in ACM Ubiquity about innovation. Stefi works Palo Alto Research Center (PARC), where he directs the Information Sciences and Technologies Laboratory.

UBIQUITY: Going back to PARC, do you think of it mainly as a place of invention or as a place of innovation?

STEFIK: PARC is most famous as a place of invention. It has grown into a place that fosters innovation, where innovation means taking an invention all the way to a product. PARC is a research laboratory, whereas innovation requires other functions like development, manufacturing, and marketing. When PARC innovates it needs to partner. Either it partners with a company that has the additional assets, or PARC works with others to create a new company UBIQUITY: If some smart outsider like Peter Drucker came to take a fresh look at PARC right now, what do you suspect he or she would have to say about it in its current state of organization?

STEFIK: Someone familiar with PARC from a few years ago might be surprised by the changes. Some of the projects we have going, in biotech, for example, wouldn't have made much sense if we were only doing research for Xerox. There are also new cultural features. Now that PARC works with multiple sponsor companies, we have a process for starting a research engagement. At the beginning of a possible engagement, we develop a workshop bringing together selected PARC researchers with relevant stakeholders in the company representing its technology, development, and finance people. The goal of the workshop is to identify points of value and leverage that we can agree on before we start a full-scale engagement.

UBIQUITY: What kinds of engagements are most common?

STEFIK: Most companies come to PARC when they want to start something new. They may have recognized a need for a strategic new direction. Of course you are not going to get an answer overnight. Perhaps Drucker would approve the focus on identifying a valuable problem. Barbara and I talk about this process in terms of the "dance of the two questions."

UBIQUITY: What are the two questions?

STEFIK: This is very simple but also fundamental. The two questions are "What is possible?" and "What is needed?" When a workshop identifies a valuable problem, this is the "what is needed" question. When it explores what could be done with emerging technologies, this is the "what is possible" question. The magic is in the dance. The business and marketing people tend to have strong insights about what is needed, but they don't have a good grasp of what is possible, especially if it involves advanced technology. So they limit their search to familiar paths. The technology people have a better handle on what is possible, but less insight as to what is needed. When you bring these groups together productively, the marketing guys might say "I didn't know that was possible" and the researchers might say "I didn't know you needed that."

Gosh why we don't have a place like that in Europe?