Innovation: The Real Thing

Throughout the history of the tech industry, one of its guiding beliefs has been a faith in the power of innovation–that the company building the best mousetrap will win. But as outsourcing and web technologies continue to drive change, we’re starting to see the rise of tech businesses that specialize in business process rather than innovation. Innovativeness itself is a commodity to be managed through economic forces, rather than a craft to be nurtured.
This model deprecates the role of the strategic visionaries who have traditionally built great tech companies by discovering an unmet market need and then leading the charge toward it. Instead, the most important skills in the new model are a willingness to experiment and quick reflexes.
The most prominent example of this new approach is Google, which is in many ways a giant research lab funded by an advertising company. Google has created an internal Darwinian marketplace for technologies. A blizzard of new ideas is tossed into the market. Those that attract the most enthusiasm get resources, while those that don’t are allowed to linger in the twilight, in endless beta status.
This in-house competition is supposed to eventually produce exciting new businesses that take the company to the next level, but so far that has been the model’s weak point. As a company dominated by technologists, Google produces a lot of interesting new technologies, but not a lot of compelling new product ideas focused on user needs. Sometimes Google has even been forced to buy companies like YouTube when its own internal efforts failed or were late to market.
Google can continue to operate this way for as long as its advertising machine spins off cash and insiders have voting control. So it’s too early to dismiss their Darwinian model of innovation management. But for the rest of us, who don’t have unlimited financial resources to pay with, the best approach is clearly still to plan a strategy first and then execute on it.