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  In fact, the indoor fixture came in two versions, one equipped with a compact fluorescent, the other with a solid-state source. Jeff Quinlan, who was then Acuity’s director of engineering, well remembered how lighting specifiers responded to the prototypes. They crowded into the booth, straining over each others’ shoulders to catch a glimpse of the demonstration. “My goal was to show them that you couldn’t tell the difference between a well-designed compact fluorescent fixture and a welldesigned LED fixture,” Quinlan told me. “And when they saw the fixtures, virtually no-one could tell.” How much more energy-efficient was the one equipped with LEDs? his audience wanted to know. Quinlan replied that the LED fixture was actually not more efficient than the compact fluorescent one. The faces of the specifiers fell. They had heard that the new technology would be much more frugal. Then Quinlan hit them with his punch line. “LEDs are not more efficient today,” he said, “but here’s the thing — in six months they will be; in a year they’ll be much more, and in two years more than that.”

  The response of attendees to Acuity’s outdoor LED luminaire was even more telling. “We had two high-end competitors in the United States,” Quinlan explained. “I saw people from both these companies, I could tell by their badges who they worked for. They wouldn’t come in the booth - that’s considered poor form - but they would come to the booth. It would start with one person, and they would leave, then they’d come back with three people. By the end of the day I’d had literally fifteen people from one of my major competitors outside our booth, all standing there talking. The truth was, they had no LED in their booth. What that told me was, they were shocked at how we had gotten out in front on this. Clearly, being so far out in front gave us a huge competitive advantage, and from there I think we were able to maintain that momentum.” Acuity introduced its first LED product in 2008. Within three years, the company had refocused its entire development effort on converting all its products to solid-state lighting. By 2015 this initiative was paying dividends, with LED fixtures accounting for more than half of its sales. How had Acuity managed to transition so rapidly to the new technology and, in so doing, pull away from the pack?

  Acuity Brands was a recent construct, an amalgam of companies spun off in 2000 from National Service Industries, an unwieldy conglomerate that, facing the threat of asbestos lawsuits, sought to protect its untainted assets. At Acuity’s core was Lithonia Lighting, pronounced “Lai-thonia” by citizens of the tiny Georgia town from which the firm took its name. The company had been established there just after World War II by an entrepreneur named Sam Freeman to make and sell fluorescent fixtures for office buildings. In 1957 it moved its base from Lithonia to nearby Conyers, a pint-sized city [2013 population: 15,618] located 24 miles east of Atlanta. By 1970 Lithonia was the number-one maker of lighting fixtures in North America. In the late nineties, to build market share the firm made several acquisitions. They included some of the lighting industry’s oldest and most prestigious names, like Peerless (founded in 1892) and Holophane (founded in 1896). Hence the “Brands” of the new corporate moniker, to go with “Acuity,” which means sharpness, in this case, appropriately enough, of vision.

  Unlike most US lighting companies, which were small and catered mainly to niche markets, Lithonia served a wide range of customers with its portfolio of products. These included exit signs, or “emergency egress safety lights” as they are formally designated. Though seemingly just a tiny piece of the illumination market, there was more to exit signs than met the eye. For one thing, egress lights are everywhere: the Environmental Protection Agency estimates that there are more than a hundred million of them in the US alone. A large commercial building like an office block might have thousands of exit signs hanging above its doorways. Though each consumes relatively little electricity, the lights have to be on all the time. Traditionally most exit signs were lit by 20-watt incandescent bulbs. These burned tens of billions of kilowatt hours and required replacing at least once a year. Meaning that in terms of power bills and labor costs, exit signs set building owners back several billion dollars annually. This was thus an application crying out to be replaced with a more efficient, longer-lived technology. Like LEDs, which used less than a quarter as much power and could last for up to ten years. In addition to being more efficient, LED exit signs were also much thinner, hence lighter in weight than conventional signs, which needed a box to house their bulbs.

  The first LED exit sign dated back to 1985. Its letters were picked out by strips of illuminated red dots. This was unsatisfactory. In the early nineties, a new technique known as “edge-lit” emerged. LEDs are lined up along the top of a transparent sheet of acrylic on which letters and/or symbols are etched. Only the engraved parts light up. The Energy Policy Act of 2005 singled out exit signs as an application for which energyefficient lighting would henceforth be mandatory in all new construction. This effectively eliminated incandescents, giving sales of LED exit signs a huge boost.

  Exit signs need colored light. Incandescents and fluorescents shine white light which has to be filtered to produce different hues, losing up to eighty percent of their output in the process. LEDs by contrast emit colored light directly, yet another reason for their adoption. In the US, the emergency color was typically red. Elsewhere, green was preferred, the rationale being that the human eye is particularly sensitive to green light; also that, in a fire, green signs are easier to see than red ones. Exit signs are governed by building codes, their color varying from state to state, sometimes from city to city. For example, Los Angeles requires red exit signs, while San Francisco (and other Pacific Coast cities like Portland, Oregon, and Seattle) insist on green. The latter was formerly impracticable with conventional LEDs, which, though capable of producing a bright red, could only manage a weedy-looking yellowish-green. Then in 1995 the Japanese firm Nichia announced that it had developed a new, emeraldgreen emitter. Now LEDs would be able to replace all exit signs. The availability of the new bright-green devices set off a frenzy of activity at exit sign makers, including Lithonia, which had its own exit sign division based in Decatur, a suburb of Atlanta. The company was in fact numberone in the US in emergency lighting. Lithonia led the industry in converting exit signs from incandescent to LED. Thus, when the time came to formulate a strategy to tackle the challenges posed by solid-state lighting, Acuity Brands was in the fortunate position of having some existing in-house electronics expertise on which to draw.

  Acuity’s management began to take note of LED-related developments in the first years of the new millennium. In particular, the activities of an aggressive young startup called Color Kinetics caught their attention. Color Kinetics had been founded in Boston in 1997 by a bunch of twentysomething hotshot roboticists out of Carnegie Mellon University who sought to exploit the digital nature of the new solid-state light sources. The firm had made a splash selling controllable systems for bathing the exteriors of large buildings in gorgeous, ever-changing patterns of multicolored light. It had also ruffled feathers by taking out broad-ranging patents for applications of solid-state lighting technology. Color Kinetics was, as co-founder George Mueller proudly told me, “a real company, with real customers, real revenues, and real profits.”26 Then, at at trade show held in Las Vegas in October 2004, Color Kinetics announced that it was moving into white light, introducing a series of tunable cool-to-warm products aimed at the professional lighting specifier. There could be no mistaking the firm’s intent: the geeks were out to eat Acuity’s lunch.

  The writing was on the wall elsewhere, too. In 2002, with the announcement of the Next Generation Lighting Initiative, the federal government signalled its intention to support the development of LEDs. The following year the Next Generation Lighting Industry Alliance was formed by twelve companies to partner with the Department of Energy on solid-state lighting R&D. For fixture makers like Acuity this was a wakeup call. “If [the government is] willing to fund that type of technology, we’d better make sure we’re aware of what’s goi
ng on, and be at the forefront of that,” said Rick Earlwine, who was then the company’s vice president of innovation. In 2004, Earlywine drew up Acuity’s first LED strategy. “It was mostly focused on what Color Kinetics was doing,” Earlywine told me. A technological revolution was apparently underway. If so, then a lot was at stake. Heading into the revolution Acuity was the number-one company in the lighting fixture business. It wanted to be number-one coming out of it, too. “That’s been our mantra from the very beginning,” Earlywine said. “We wanted to be a Netflix, not a Blockbuster. And that meant changing a lot of what we’d done.” As Andy Grove famously admonished, only the paranoid survive.

  26 For details on Color Kinetics, see my book Brilliant! pp 150~170. In 2004, LEDs were still nowhere near bright enough to cut the mustard in general illumination. But as Haitz’s Law predicted, they were rapidly getting brighter. Earlywine was charged with assembling a team to investigate solid-state lighting. Acuity’s management gave him carteblanche to select the creme-de-la-creme of the company’s engineers. Seconded from its product development divisions they would be relieved of their ordinary responsibilities. The team Earlywine put together consisted of twelve members. Based in Conyers, it was made up of mechanical engineers like himself, optics specialists, plus some “double E’s” — electrical engineers from the exit signs division, who had experience with LEDs, packaging, circuit board layout, surface mount technology, and other microelectronic arcana. His first picks were two outstanding engineers in their mid-thirties who had already demonstrated leadership potential, Jeff Quinlan and Mark Hand.

  Though he had lived and worked in Georgia for almost twenty years Jeff Quinlan was not native to the south. He was born in Chicago in 1969, but his family moved to Colorado early in his school career. Quinlan had intended to become an architect, but at the University of Colorado at Boulder he encountered illumination engineering and promptly fell in love. Quinlan had, he thought, an affinity for the psychology of how humans perceive light. “I’ve always enjoyed the concept of bringing architecture to light, helping people to see that space,” he told me. “When I took my first lighting class, it became clear to me that this was an area where I could could help to make a difference.” From when he was a youngster Quinlan had loved writing computer programs. Now computers were becoming powerful enough to model how lighting systems performed. “One of the things that attracted me to the lighting side,” he said, “was all the work that was going into the computer analysis of lighting systems.” Quinlan went on to do do graduate work under the guidance of Dave DiLaura, who had pioneered the application of computers to lighting at Boulder. He joined Lithonia Lighting in 1994, just around the time Nichia announced the first bright-blue LED. Quinlan initially worked on the design of optical systems for large, high-intensitydischarge lamps used in outdoor applications like street lights. His boss was impressed by Quinlan’s unslakable thirst for knowledge about new technology. “Jeff’s truly a techno-geek who can communicate well,” Earlywine commented admiringly.

  As a student in his native Ireland Mark Hand had wanted to design airplanes. He studied aeronautical engineering at Queen’s University Belfast then, when he realized that this entailed more aerodynamics than design, followed up with a master’s degree in mechanical engineering. He got a job designing airplane seats for a company run by an eccentric Englishman. Advised to seek employment in a “more normal” place, Hand signed up with Nortel Networks, which promptly transferred him to Atlanta. Eight years later, Nortel having run into financial difficulties, he looked around for alternative employment. In 2002 more or less by accident he fell into lighting, a very different world from telecoms. “In terms of technology it was like stepping back fifty years,” Hand told me. The features on chips were measured in micrometers, but lighting folks still reckoned the tolerances on their big old metal castings in fractions of an inch. “That’s not a tolerance,” Hand liked to josh his colleagues, “that’s a dimension!” However, he quickly learned there was also a lot to like about lighting. In a huge impersonal telecoms firm it was hard to know where your work went and who your customers were. In lighting, by contrast, it was possible to be in intimate touch with every level of the business. “You know the sales guys, you know the customers, you can drive down the road and quite literally see products you’ve designed.”

  When Hand joined the innovation team he had already had some experience with designing LED fixtures. In 2005 the city of Ann Arbor, Michigan, had issued a request for proposals for LED street lights. But the crude prototype built by Hand and his colleagues at American Electric Lighting (yet another one of Acuity’s brands) was simply not capable of putting out enough lumens. “It was nothing even close to what people were looking for in a street lighting program,” Hand recalled. “At the time we were still trying to figure out where was this LED stuff going, did it have any legs?” Hand was chosen for the team on the basis of his background in electronics packaging at Nortel, not for his experience with LEDs (of which Acuity’s management was then unaware). But this fortuitous prior exposure meant that when the innovation team came together in Conyers in early 2007, he was able to hit the ground running.

  For the next three years Quinlan, Hand, and their colleagues did everything that management had asked of them. “We were an excellent team,” Hand said, “able to think outside the box and to move the whole group forward.” In short order, they developed products and got them out into the field. Acuity introduced its first commercial LED product, a downlight, in 2008. The team developed the concepts, then worked with the company’s product development divisions on marketing. In a sense, they were almost too successful. The commercial groups came to rely on them to develop new LED products and do all the technological heavy lifting. The hope had been that the divisions would start hiring their own talent which would replicate the team’s function internally. But, understandably, this did not happen spontaneously. Performance in the product groups was measured based on sales revenue: high-priced LED fixtures initially contributed little to the bottom line. In 2010, recognizing that the time had come, Earlywine dissolved the Conyers team, dispatching its members hither and yon to seed LED development at the various divisions. “We said, we think this is real, this is where the future’s going to be, we need to get the teams to know that,” Earlywine told me. “The reason we were able to establish a robust product portfolio pretty quickly was that we took that knowledge base and rapidly disseminated it to our normal engineering teams.”

  For Quinlan, the break-up of the pioneering LED team was both his happiest and saddest moment at Acuity. Happy, because the team had done everything that management had asked of it. Sad, because the members would now go their separate ways. It was, Hand agreed, bittersweet. “But our objective had been achieved in that we convinced the rest of the organization that LEDs were the future, that [solid-state lighting] could be done, and done successfully. And they were now ready and willing and able to run with that, across multiple brands.” Many of the innovation team’s members would become leaders of design teams in different parts of the company. Quinlan returned to oversee the incorporation of LEDs into outdoor lighting products. Eventually he would move on to be Acuity’s “technology evangelist,” spreading the good word about solid-state lighting, identifying and incubating new technologies. Hand would take charge of all of Acuity’s indoor lighting solutions.

  Embracing the key technology of solid-state was only part of the reason for Acuity’s success. In 2008 the US real estate market collapsed, reaching its nadir the following year. Soon all companies associated with the construction trade, including fixture makers, were hemorrhaging cash. During the dark days of the Great Recession Acuity’s management poured resources into converting the company’s existing product lines to LED. At a time when the rest of the lighting industry was laying off people and trimming R&D in order to survive the downturn, Acuity invested countercyclically. As the construction market recovered, the company was uniquely positioned to o
ffer LED versions of its fixtures, capitalizing on the market’s demand for more energy-efficient lighting. The result was extraordinary: in 2013 sales took off, profit margins soared, Acuity’s stock price shot through the roof, and the company became the darling of the investment community.

  Stuf fing LEDs into fixtures originally designed to hold bulbs and tubes was just the beginning. Acuity’s vision for the future of lighting went well beyond mimicry. It also encompassed another, very different form of solid-state lighting, known as OLED, which we shall look at in the next chapter. And a skunk works, which was set up in Wheat Ridge, Colorado. The task of the Luminaire Concept Center, according to its director, Kevin Leadford, was “to imagine possibilities, demonstrate ideas, and conceive of a future unlike the past.” It was clear for example that, in future, styling would play a much larger role in fixture design. Bulbs and tubes were bulky and inflexible. LEDs by contrast were tiny dots that designers could sprinkle around like hundreds and thousands. In the new, freeform era, luminaires could be contoured into all sorts of shapes and sizes. “Don’t underestimate new form factors, like thinner fixtures,” Leadford predicted. “We all get tired of the same old thing, we all want something new.” One of the first LED luminaires to emerge from the Colorado concept center was called Aera. Intended to replace overhead lighting, the fixture was recessed into a wall above eye level. It resembled a series of small rectangular openings, suggesting the sky as seen through a transom window. Its light could be varied from muted pastel to bold saturation, enabling the simulation of different times of day.