Monday, December 15, 2008

Common Causes of Innovation

I was reading a Business Week interview with Marissa Mayer, VP of Google, about how her company is doing during the economic downturn. The article covered a lot of ground but one thing that caught my eye was the discussion of the 20 Percent Innovation culture where people within Google can spend up to 20 percent of their time on projects of their own choosing. The idea behind this is to give people some protection from the dictates of management, dictates which can often stifle the next innovation.

Mayer was asked if some of the Google culture could be replicated in other companies? Her reply was that each company is unique and the systems need to fit the company. But she went on to say:

But there clearly are things that can be replicated, like having small teams, awarding a lot of ownership to those teams so you stretch and grow those people. Or really focusing on and demanding that innovation come from everyone and everywhere throughout the organization. One of the worst things you can do in a company is to have an R&D segment or an innovation group. Once you have some people whose job it is to innovate, everyone else stops innovating.

I worked at 3M for thirty years. The company was famous for "The 15 Percent Rule" which basically was the precursor of Google's 20 Percent Time. The thought process was exactly the same: give people some space (i.e., time) to tinker with their ideas that was outside the jurisdiction of management. This was sort of a Get Out of Jail Free card that an R&D person could pull out at any time if the supervisor wanted to shut down this "non-productive" activity. And it worked. Many of the really great product ideas at 3M grew out of the 15 Percent Rule.

It's worth looking a little deeper behind these examples from Google and 3M. What do these cultural norms imply? First, it points to some very savvy senior management who understand that really innovative ideas often come from the brains of people who have been given some intellectual freedom. This culture of innovation is usually established by the very same senior managers who often founded the company or at least sweated to see that the organization survived through those crazy early years. They know that they didn't have the perfect business plan or that often the business that eventually succeeded was not the business they set out to develop. Innovation has to be nurtured by a sensitive gardener. Savvy, growth-oriented managers know this and allow for it.

The second thing worth noting about this norm of cultural innovation is that even the greatest idea is just an idea unless it can be developed into something that can demonstrate its merit. The person with the idea often only has part of what is necessary to move the idea along. But the idea person has colleagues who also have 15 or 20 percent of their time to work on ideas of their own choosing. The idea they choose to work on doesn't have to be their own. They might have just the right expertise or equipment to move the idea ahead another step. Networks of innovators start to grow. People have every reason to talk to anyone they think can help. And that fosters yet other new ideas. This networking juices everybody up. Well, everybody but the manager focused on efficiency and the ego that says that the only good ideas are his ideas.

So that is yet another aspect of an innovation culture: egos are kept in check. "Alpha" managers may force efficiency and performance out of their organizations but they will never get innovation. Innovation cannot flourish in a high-ego culture or a culture of fear. Even for the person with the original idea, by the time the idea has been developed a little further it is owned by an ad hoc team of people who all feel they are the proud parents of something beautiful.

Cultures of innovation are born most often at the same time innovative companies are born. They are tough to bolt on later. They are also fragile. There is a relentless pressure to not "waste" resources on "unproductive" ideas. And to be clear, most of the ideas coming out of the 15 or 20 percent time don't go anywhere. But the ones that do... these can change the very future of the company. It is always a balance between innovation and efficiency. Always.

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