Innovation Crescendo

Stainless steel kitchen appliances are essential elements in kitchens these days, yet most of us know little of the innovation that occurred nearly 100 years ago that made this possible. It was in 1913 that Harry Brearley in Sheffield, England, produced the first ingot of what was later to become known as stainless steel. The more I delved into this story the more it fascinated me, not only because of Harry Brearley’s story, but also because it embodies many of the innovation themes found in many of my other innovation posts.

Today, steel has an important place in consumer products as well as the aerospace, automotive, manufacturing, food processing, medical, chemical, petroleum, construction, railroad and marine industries. However we all know that steel has a major flaw……it corrodes, it rusts and will eventually degrade into a powder. Stainless steel does not rust. It contains a certain critical amount of chromium which forms a molecularly-thin layer of chromium oxide on its surface which prevents any further corrosion in a process called passivation. This unique property sets stainless steel apart from other steels and accounts for its importance in our daily lives.

Harry’s History [1,2]…Harry Brearley was a self-taught man who worked his way up from absolute poverty. Harry was born in 1871 and was a bottle washer for a chemist at the age of 12. He was promoted to laboratory assistant, was interested in Maths and Chemistry, and eventually became an analytical chemist. At the age of 31 he wrote his first book, “The Analysis of Steelworks Materials”. Harry went to Riga, Latvia as a chemist in 1904, was promoted to Heat Treater and then to Works Manager, and returned to Sheffield after several years.

Thomas Firth and Sons and John Brown and Co were neighboring steelworks in Sheffield and decided to set up a joint research laboratory – a modern day skunk-works [3]. In 1909 Harry was 38 and became Manager of Firth Brown Laboratories, their joint research laboratory. Harry was given free rein over his research projects and had co-ownership of any patents that might arise from his work at the lab – incentives for innovation that you will rarely find today [4].

While at Firth Brown Laboratories, he became interested in the erosion and wear-patterns of steel rifle barrels, thinking that steels with high chromium levels might be a solution. In August of 1913 when Harry was making high chromium steels he noticed these steels were resistant to acid etching after polishing (a technique required to study the microstructure of the steel). He also noticed that cut surfaces from these steels did not rust. These steels did not solve the rifle barrel problem, but Harry began to realize that rust-resistant and acid-resistant steel could have many applications – Harry’s technical competency and acute powers of observation were about to lead to a disruptive, breakthrough innovation [5]. Harry tested these steels with acid food products such as vinegar and lemon juice with good results – they didn’t stain or corrode.

In 1914 Harry talked about the use of this new steel for cutlery/flatware, as well as for other uses. Until that time, cutlery was either made from carbon steel, prone to rusting and requiring frequent polishing, or expensive EPNS (electro-plated nickel silver) or sterling silver. In 1914 the town of Sheffield was the center of cutlery manufacture. You might think that Harry was at the right place at the right time and that his invention of a rust and acid-resistant steel and the cutlery idea would find an immediate receptive audience. Unfortunately that isn’t what happened.

Almost everyone was against the idea and could not see the value of a new rust-resistant steel or its use in cutlery. Firth’s directors refused to supply steel blanks that could be processed into cutlery and refused to apply for a patent. Harry was undeterred. He set out to have some prototype cheese knives made – in other words, he took his project under-ground into what we typically call a skunk project today [3].

In June, 1914, Harry met with the manager of a local cutlery manufacturer who agreed to make some knives with a sample of the new steel. On the first attempt, the knives were made but the steel was very hard and damaged the expensive stamping tools. On the second attempt, the stamping tools were not damaged but the knives were too brittle. The steel apparently had been over-heated….it could be worked easily when hot but became too brittle when cooled. On the third attempt Brearley attended the run and was able to direct the cutlery maker to use the correct heat for working and hardening the steel and a dozen knives were made – an early example of a technology transfer process implemented at the fuzzy front end of innovation. He worked with a manufacturer directly in making prototypes and so transferred his knowledge from the lab scale to someone who could make these products at the commercial scale. The cutlery maker observed that “This steel stains less”, and inadvertently introduced use of the term “stainless steel”.

The steel was quickly accepted by other cutlers in the Sheffield area and within two months they had ordered seven tons of the new steel that previously was considered worthless. Brearley felt wronged by the Firth’s directors who had refused to supply blanks and would not apply for a patent, and so gave his resignation at the end of 1914. Although the manufacture of stainless steel products made it impossible to file patent in England, Harry applied for a US patent on March 29, 1915. It was initially rejected but granted on September 5, 1916. To overcome existing patent applications for chromium steels, Harry did not patent the alloy but rather cutlery made with the alloy. Thomas Firth and Sons then realized that the patent might hinder their US operations and offered to purchase a half share of his patent. Brearley agreed only if they established a Firth-Brearley Stainless Steel Syndicate which he hoped to manage.

An early ad (1915) for stainless steel cutlery can be seen on the left here.

In the US, an unexpected patent problem turned up. Elwood Haynes, a noted US industrialist had applied for a patent for a metal tool containing iron, chromium and low carbon. He had filed his application just a few days before Harry Brearley’s and opposed the granting of Brearley’s patent by applying for an “interference” [6]. The patent problem was resolved when the Firth-Brearley Stainless Steel Syndicate established a patent-holding company, “The American Stainless Steel Company”, in 1918 and offered the Elwood Haynes partial ownership of the new company in exchange for his patent – an example of how new business development licensing projects and joint ventures can eliminate barriers to commercializing innovative new products. The two patents together became a formidable barrier to anyone planning to make stainless steel without paying the company royalties. The American Stainless Steel Company continued to operate profitably until 1929 but dissolved in the 1930s.

Back in England, Harry Brearley was hired as Works manager of Brown Bayley’s Steel works in Sheffield from 1915 until 1925 when he retired. Harry continued to write books and was a director on Brown Bayley’s board until his death in 1948 at the age of 76.

Innovation Lessons Learned …Harry Brearley had a unique set of innovation characteristics and personality, but there are common themes that are seen in other great innovators. In Harry’s case, although, there is no doubt that he was a good example of a technical expert who developed a very good knack for business.

1) First, innovators typically have deep technical expertise. Harry knew the business of steel making inside out and wrote several books on it. He was in the forefront of experimenting with new types of steel and developed techniques to work and harden them. He was a person with the necessary skills and experience to recognize new innovation, unlike his non-technical bosses. When he made his discovery his deep technical content enabled him to draw inferences, make connections, use his intuition and look into the future, understand the significance of his discovery, and know what to do about it.

2) Another unusual situation occurred that helped this innovation …the formation of the joint research laboratory for the neighboring steelworks. This, in today’s language, was the formation of a “skunk-works”. We have seen this happen before in other innovations I have discussed [3] and often the formation of a dedicated innovation center (i.e. skunk-works or research lab) precedes and is catalytic for an important innovation later. Harry saw the opportunity in this new position and modified the terms of his contract so that he was given free rein on the projects he could choose as well as 50% ownership of any patent rights. In modern companies, research workers assign their patent rights over to the company, but I believe if modern companies allowed inventors to retain some ownership in patent rights, that might be a good incentive for innovation. Also, non-directed research is very rare. Today, even basic research grants are nearly always in fields where success is guaranteed based on previous work and are conservative in nature. Industrial labs now are tightly controlled to do research only in specific, applied areas. The era of Bell Labs is over for industrial research institutions although organizations such as Google[x] have been formed recently for the purpose of developing major technological developments or “moonshots”. Any incentive which allows for some non-directed research will, in my opinion, be rewarded with good results.

3) In spite of huge skepticism, Harry Brearley remained committed to his idea and never gave up. There was persistence, almost an obsession to get this idea to market and commercialize it. This persistence, his technical competence and several other attributes were also present in other inspirational innovators that I have also written about such as Antoni Gaudi [7].

4) Harry Brearley quickly developed practical prototypes of his idea. Without making these prototypes, customers and suppliers could not have seen the value of his idea and would not have been able to compare his product to existing products. It also had the added value of letting Brearley develop the correct processing instructions for manufacturing his product. In other words, he developed a successful technology transfer process for commercializing his innovation.

5) Harry recognized that the timing was right and immediately pushed forward with his ideas. Several new industries were emerging, such as autos, aircraft, medicine, engines, marine components etc that needed a material that was light, strong and corrosion free.  Aluminium was available as a possible alternative but was extremely expensive and soft. Stainless steel was less expensive and could be made in a way that its corrosion-resistant, tensile and ductile properties could be controlled.  Consequently it was used in many of these emerging industries in new applications thus nucleating a whole series of new innovations.  The discovery of stainless steel occurred at the right time.

6) Brearley understood the full commercial potential of his idea and had enough commercial business savvy to realize that the US market was important. Harry intuitively understood what the sharp back end of innovation was… he commercialized his ideas quickly, successfully, and in the case of the US patent holding company, in an unusual “win/win” situation. Harry Brearley was able to understand that even though the train had left the station in terms of getting a patent in the UK, it was still worthwhile trying to get a patent in the US. Because of this, he was able to form the American Stainless Steel Company, partner with Elwood Haynes, create an additional revenue stream and further promote the commercialization of stainless steel. Eventually a whole new stainless steel sub-industry was created around his ideas.

Creative and Adaptive Innovation Models …As discussed previously in my blog [8], innovators can be classified as either creative innovators or adaptive innovators. Creative innovators, like Leonardo da Vinci, are gifted ideators but are not so good with execution. Adaptive innovators, like Thomas Edison, tinker with ideas, make prototypes until it they work perfectly and are strong on the execution side. The development of stainless steel is an example of creative innovation followed by adaptive innovations to develop and commercialize new products using the breakthrough innovative new material. The creative innovation was supplied by Harry Brearley in developing the first stainless steel and in realizing its potential for several products. However many adaptive innovations occurred afterwards both by Harry Brearley and by many others that resulted in the development in scores, maybe hundreds, of different stainless steel variants, each fine-tuned for a specific niche market. Many other innovators then developed new uses and products for stainless steel, thereby causing a rippling innovation effect. Stainless steel is used in food processing, medical surgical instruments, marine parts, pumps, construction and aircraft manufacture to name a few.

Summary …Harry Brearley had innovative skills to develop and commercialize one of the most important alloys ever discovered. He exemplifies an innovator with both creative and adaptive tendencies. He was not the first person to study the effect of adding chromium to steels. He was also not the first to notice that chromium inhibited the corrosive properties of steel. He was, however, the first to understand the importance of these qualities and the first to see many of the commercial opportunities that this new material could provide in developing novel products with unique properties.

Of all my posts on innovation, this example best reinforces several themes I have discussed before …the formation of a joint research lab (skunk-works), the importance of prototyping and developing a scale-up process, an obsession to commercialize, the right timing, and the power to be able to influence others when you are a technical expert.

References…
1. http://en.wikipedia.org/wiki/Harry_Brearley
2. http://books.google.com/books?id=E30rCBeM8nkC&pg=PA41&dq=Harry+Brearley+August+1913&hl=en&sa=X&ei=Z60wUb-IKJH08ATWz4D4Ag&ved=0CC0Q6AEwAA#v=onepage&q=Harry%20Brearley%20August%201913&f=false
3. https://innovationcrescendo.com/2014/01/15/innovation-in-large-corporations-managing-skunk-projects-to-success/
4. https://innovationcrescendo.com/2013/03/25/a-case-study-for-disruptive-innovation/
5. https://innovationcrescendo.com/2013/04/25/innovation-culture-talent-incentives-4/
6. https://innovationcrescendo.com/2013/08/24/patents-incentives-or-hindrances-for-innovation/
7. https://innovationcrescendo.com/2013/11/26/the-anatomy-of-an-inspirational-innovator-antoni-gaudi/
8. https://innovationcrescendo.com/2013/03/12/ideation/

© Dennis Nelson 2014