In my previous post I mentioned the various problems with relying on incubation teams to bring innovation into a product or organization. The obvious follow up question is that if carving off some subset of your team to work on the "next big thing" while the rest of your employees work on the boring bread and butter product(s) that pay the bills doesn't work, how do you revitalize an organizations products and make them innovative?
My advice is to look at companies within your industry that are considered innovative and see what you can learn from them. One such company is Google which is widely considered to be the most innovative company on Earth by many in the software industry. A number of Google's competitors have several internal groups whose job is to "incubate ideas" and foster innovation yet it seems that Google is the
company most associated with innovation in the online space. For example, Yahoo! has Brickhouse and Yahoo! Research while Microsoft has Microsoft Research, Live Labs, Search Labs, and Windows Live Core
among others.
Below are some of the ways technology companies can follow their example without having to resort to some of their more eccentric practices like free food prepared by gourmet chefs and on-site massages, dry cleaning and oil changes to motivate your employees.
Everyone is Responsible for Innovation: There are several ways Google has created a culture where every technical employee feels that innovation is expected of them. First, there is the strong preference for people who have a track record of producing original ideas such as Ph.D's [who are required to produce original research which advances the state of the art as part of their thesis] and founders of Open Source projects (e.g. Spencer Kimball (GIMP), Aaron Boodman (Greasemonkey), and Guido Van Rossum (Python)). Secondly, employees are strongly encouraged but not required to spend 20% of their time on projects of their own design which are intended to benefit the company and/or its customers. Not only does this give employees an outlet for their creativity in a productive way, working on multiple projects at once gives developers a broader world view which makes it less likely that they will develop tunnel vision with regards to their primary project. Finally, Google has a single code base for all of their projects and developers are strongly encouraged to fix bugs or add features to any Google product they want even if they are not on the product team. This attitude encourages the cross pollination of ideas across the company and encourages members of the various product teams to keep an open mind about ideas from outside their particular box.
Good Ideas Often Come from Outside your Box: A lot of people in the software industry often criticize Microsoft for its practice of innovation through acquisition and have compiled lists of Microsoft's innovations that were actually acquisitions but the fact is that the road to success lies in being able to spot good ideas whether they come from within your company or without. Google is no exception to this rule as the following table of acquisitions and the Google products they resulted in shows
As you can see from the above list, a lot of Google's much lauded products were actually the products of acquisitions as opposed to the results of internal incubation. Being able to conquer the NIH mentality is important if one wants to ensure that the products that exhibit the best ideas are produced by your company because quite often they won't originate from your company.
Force Competition to Face the Innovator's Dilemma: One reason that a number of Google's products are considered innovative is that they challenge a number of pre-existing notions about software in certain categories. For example, when Gmail [a product of an engineer's 20% time spent on side projects] was first launched it was a shock to see a free Web-based email service qive users 1 gigabyte of free storage. A key reason that this was a shock was because most free Web-based email services gave users less than a hundredth of that amount of storage. This was because the business model for free email was primarily to give users a crappy user experience (2MB of storage, obnoxious advertising, etc) and then charge them for upgrading to a decent experience. Thus there was little incentive for the major players in the free email business to give free users lots of storage or a rich online experience because isn't how the business worked. Another example, that is likely to be a classic case study of the innovator's dilemma in the years to come is Google Docs & Spreadsheets vs. Microsoft Office. From the Wikipedia article on disruptive technology
In low-end disruption, the disruptor is focused initially on serving
the least profitable customer, who is happy with a good enough product.
This type of customer is not willing to pay premium for enhancements in
product functionality. Once the disruptor has gained foot hold in this
customer segment, it seeks to improve its profit margin. To get higher
profit margins, the disruptor needs to enter the segment where the
customer is willing to pay a little more for higher quality. To ensure
this quality in its product, the disruptor needs to innovate. The
incumbent will not do much to retain its share in a not so profitable
segment, and will move up-market and focus on its more attractive
customers. After a number of such encounters, the incumbent is squeezed
into smaller markets than it was previously serving. And then finally
the disruptive technology meets the demands of the most profitable
segment and drives the established company out of the market.
As someone who now maintains several wedding lists in collaboration with his future spouse I can say without a doubt that universal access to our files from any computer without my fiancèe or I having to install or purchase any software is head and shoulders beyond the solution provided by traditional desktop productivity suites. In addition, it is quite clear that Google will move to address the gaps in time (see Google Gears) so we are likely on the cusp of a multi-billion dollar software category undergo upheaval in the next few years.
The main lesson here is Change the Game. Do not play by the rules that favor your competitors.
The key thing for people wanting to learn from Google's practices isn't to follow each of Google's specific policies but instead to understand the philosophy behind their practices then apply those philosophies in your specific context.