Innovation is to this century what quality and efficiency were to the second half of the last century – the dominant focus organizations adopted to improve business results. From a macroeconomic perspective, the shift is welcomed. We need new-to-market industries and jobs to replace those lost to the decades-long, relentless, job-destroying drive for reducing waste and increasing efficiency.
But a commitment to innovation and successful innovation can be miles apart. How can leaders best bridge the divide?
Marissa Mayer, senior leader of Google’s search business and one of the company’s longest tenured employees, shared her company’s innovation formula at the University of Wisconsin Madison’s E-Business Consortium’s 2010 Business Best Practices & Emerging Technologies Conference. Founded in 1998, the UWEBC brings together leading Wisconsin companies to focus on thought leadership, business best practices and emerging technologies related to E-commerce. Each year, the UWEBC provides its members with a highly informative conference and over fifty peer-learning events, well-worth the price of membership.
Here’s Google’s innovation norms according to Mayer:
- Keep an intense focus on users. Why? In Wal-Mart Stores founder Sam Walton’s words, “If you don’t listen to them, someone else will.”
- Give high quality, excited employees license to be creative. Google asks employees to devote 20% of their time to any idea they wish to explore, a high-return investment. In one 6-month measurement period, Mayer reported, the 20% work generated the majority of Google’s product innovations and improvements.
- Launch early and often, employing user feedback to migrate development efforts towards the final product. Mayer admits this approach produces less “WOW” factor than Apple’s “Build the castle and they will come” new product development approach. But Google’s way reduces risk, thereby avoiding a loud “DUD.”
- Tackle hard problems. I especially liked this advice. Hard problems demand fresh thinking. Otherwise the hard problem would have been solved already. Google’s 20% projects, senior leadership directives and thinking about where technology is headed provide plenty of hard problems for Google to solve. With more cell phone usage, for example, some entrepreneurs realized that there would be a proliferation of videos. How could a company catalog them and make them accessible with a search engine? Their answer – the fabulously successful YouTube now owned by Google.
- Focus on speed as a source of innovation. I think Google’s value promise is built on speed – as the fastest route to information you want, Google saves precious time. So I’d restate Mayer’s point as – Focus on how you can further advance your value promise. If it’s time-savings, speed up all your processes.
- Delight your customer in ways that generate emotional reactions, and offer the unexpected. The changing look of Google’s home page trademark (on holidays, artists’ birthdays and other special days) reveals the company’s playful, fun and creative culture. The unexpected keeps the brand energized.
- Trust your users. Google relies on crowd sourcing as an advantage, e.g., over one million people helped it move from 14 languages to 140 according to Mayer.
Mayer’s answer to a question revealed another insight into Google’s innovation practices. To watch Google at work, she explained, you’d see a highly flexible organization in which people with different skills come together in different configurations to solve specific problems. Groups grow in size if an idea gains traction, after which they disband. Individuals serve different roles across groups, depending on each project’s needs.
The advantages of this fluid approach to structure were first noted in case studies of W. L. Gore & Associates. What a refreshing contrast to the rigidity that characterizes so many organizations in which process becomes an end unto itself. (A relentless focus on efficiency usually created this rigidity, by the way.)
With mobile applications becoming the fastest way to the information that users want, Google’s business model is being challenged. Search engines tailored to niche audiences or a user’s unique needs also threaten Google’s business model, which was designed for the masses. Will Mayer’s innovation practices be sufficient to keep Google in the lead when business model innovation, not just product innovation, is needed?
Successful business model innovation requires leaders to recognize that what got their company to where it is today is not necessarily what will get it to where they want and need it to go. Knowing what to keep, what to discard and what to transform – in the hard and soft elements of business – is the art of business model innovation. That said, there is one thing that Mayer, a youthful, effective and passionate leader should maintain going forward – the “beginner’s mind” that helped Google first establish itself in a world wondering, “What does it mean to Google?”
For insight on business model strategy, read my recently released book, Beyond Price.