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The story of LEO – the World’s First Business Computer

Article by Professor Frank LandLink opens in a new window, Professor Emeritus at the London School of Economics and Political Science.

Electronic Digital Computers were invented during the Second World War to help solve complex mathematical and engineering problems. In the UK they played a key role in breaking German secret communication codes. In the USA they were designed to help in computing the trajectories of guns and missiles. Their use in science and engineering spread rapidly after the war but it was widely believed that their use would be confined to technical applications.

However, in November 1951, a British company in the food and catering industry, J. Lyons & Co., announced that it had built its own computer and used it for an application involving the valuation of the output of its bakeries – a strictly business application involving much data but by the standards of the calculations for which computers had been used, little in the way of complex calculations. A stream of other business application followed, carried out for different Lyons product divisions and for other businesses such as the Ford Motor Company, Kodak and many others.

How had it come about that an enterprise operating in the food and catering industry, with no experience in electronic engineering, had seen the possibility of using computers to help run its business processes and had decided to build its own computer?

The story goes back to the 1920s. J. Lyons & Co. were a family-run business founded in the late 19th century to provide catering for major events such as the annual Buckingham Palace garden parties. It grew rapidly, taking on many other activities including bakeries, ice cream, hotels, tea blending and packing, and the well known teashops and Corner Houses. Maintaining control over such a diverse set of businesses required high caliber management.

In the early 1920s Lyons’ recruited a young Cambridge graduate, John Simmons (who had graduated as a ‘wrangler’ - a first class mathematician), as management trainee and statistician. His principal task was to oversee improved ways of organizing business processes and management information. Simmons quickly made his mark with a series of innovations which transformed many traditional procedures. He established an office named Systems Research in 1932 which became the fount for the development of new practices.

Lyons continued to recruit first class personnel as management trainees and Simmons in 1947 sent two of these, Raymond Thompson and Oliver Standingford, both of whom had joined the company well before the Second World War and had risen to senior positions, to the USA to see if anything could be learned about new business practices developed there during the war years. They found little from which Lyons could learn, but came across the first electronic computers. They saw the potential of these essentially number crunching machines for helping Lyons to solve its problems of accounting for the vast number of transactions and extracting needed management information rapidly. On their return journey they sketched out how a computer might handle a variety of business applications.

Thompson and Standingford wrote a seminal report outlining their findings and recommending that Lyons should actively consider acquiring a computer. Simmons accepted their recommendation and started a search for ways of implementing it. But first he had to win over the Lyons Board. As it turned out, Cambridge University was then designing and building its own computer, the EDSAC, under Maurice Wilkes, to be the first stored program computer intended as a work horse for the University. The Lyons Board accepted the idea of working with Wilkes by providing some funding to help the development of EDSAC. In return Wilkes would allow Lyons to copy aspects of the EDSAC’s design to design and build its own Business Computer, subsequently to be named the LEO or Lyons Electronic Office.

To do this Lyons had to establish its own team of engineers. The team was headed by John Pinkerton, who had been recommended to Lyons by Maurice Wilkes, and also included Ernest Lenaerts, a Lyons clerk who had spent his National Service working with Radar. The team had to take the basic EDSAC design and transform that design into a business computer capable of dealing with vast numbers of business transactions. They did this so successfully that by 1951 the Lyons computer team was able to roll out the world’s first time-critical business application. The task of designing and implementing these new business applications and getting them working fell to another 1930s management trainee who had risen to be head of the Systems Research office, David Caminer, now recognised for the standards he insisted on in all aspects of what is now called systems engineering.

Subsequently, Lyons, the catering, hotel and food manufacturing company, established LEO Computers Limited as the pre-eminent British computer company, manufacturing business computers and providing services to a wide range of clients including some of the top names in British industry as well as Government departments, municipalities and the Post Office.

At the time the speed and capacity of the computer seemed amazing - a contemporary symposium on computers was called “Faster than Thought”. LEO was capable of accounting for transaction data such as orders, supplies, invoices and complex payrolls in a fraction of the time it had taken clerks and conventional business machines. It was able to deliver management reports on the activities of the different business divisions in time for management to respond effectively, often at the end of the day in which the activities had taken place. A feature of the applications Lyons put onto LEO was the level of ambition. An application was not considered worthwhile unless it delivered an improved business process, entering the requisite transaction data into the computer once only to produce a multitude of outputs. Under the guidance of John Simmons and with its very high caliber staff the LEO team successfully launched what came to be known as the information age.

And yet by the standards of today’s technology LEO could be regarded as belonging to the stone-age. Today a hearing aid or mobile smart phone has many thousand times the storage capacity and speed of LEO and whereas LEO occupied a large room a hearing aid can be sufficiently small to be hidden in the ear.

Summing up, what were the main ingredients which led a British catering and food manufacturing company to lead the world in taking computers into the domain of commerce and administration?

Lyons management had the confidence that springs from running a successful company in a highly competitive market. Experience had demonstrated that they were equipped to turn their hand to activities outside their core business, such as munitions during the war. The senior management realized that it needed a constant supply of competent innovative staff. Managers like Simmons combined innovative ideas with careful analysis and insistence on evidence that the innovation could be implemented and if implemented would deliver the expected outcomes. Innovation was seen as an activity relying on experimentation to provide proof of viability. The outcome was successful applications very much in contrast to what we see as the failure rate today. The papers in the Simmons archive provide the historical evidence for the importance of these ingredients.