It’s always hard to find good examples of innovative organisations to talk about in my classes. Not because there is a shortage of innovative organisations to discuss, but because people need examples from organisations that seem similar to theirs. One of the skills that I have to get better at is helping people see the analogies between the good examples that we have and their particular situation. I think that being able to do this well is a critical skill to have these days, so figuring out a way to build this skill would be useful.
One of the organisations that I often use as an example is Google. There is an excellent short piece on innovation at google on the Insead Knowledge site. I would like to use some of the points raised in this piece to show how even though you might not be a high technology company, there are lessons that everyone can learn from looking at how Google manages innovation.
The first lessons come from Google’s 20% rule:
anybody at Google can use 20 per cent of their time — one day a week, a week every five weeks — however they choose to define it, for them to work on what they want to work on. It also means their manager doesn’t tell them what to do.
There are two points here. To be innovative like Google, you don’t necessarily have to give everyone 20% of their time to work on whatever they want to work on. However, if you want to be innovative, you have to invest resources into the innovation process. You don’t need the specific initiative, but you do need to replicate the commitment to innovation. Too many firms tell people ‘we want you to be more innovative, and you have to do that in addition to all of the other stuff that we already expect you to do.’ This doesn’t work. One way or another, to be innovative you have to free up resources for innovation.
The second point is that at Google innovation is not a top-down operation. To encourage innovation, the people who are innovating have to have some level of autonomy. This relates to the first point. To encourage innovation, you need to give people time and space. This requires investment. To make this work, you need to ensure that everyone understands how innovation links with your strategy. But really, the job of managers is to figure that part out, while giving their teams the opportunity to figure out exactly what that means by developing and executing new ideas.
Here’s another important part of Google’s approach – quoting Dave Girouard – President, Enterprise of Google:
Girouard concedes that not every idea may bear fruit, but says there is internally a “formula” to assess new ideas. “We have a 70/20/10 model which Sergey Brin came up with several years ago, which is 70 per cent of our efforts are to be focused on our core business, 20 per cent should be focused on related but new areas that we’re developing off of that, and 10 per cent we should reserve for ‘crazy’ ideas, some of which may turn into great advancements and many of which may not pan out at all,” he adds.
This is a perfect illustration of the Three Horizons approach to developing an innovation portfolio. The key idea here is that effective innovation programs include new ideas that can be implemented across several time horizons. If you don’t have innovations that can help you right now, you won’t stay in business. BUt if all of your innovations are short-term, then you’ll eventually be replaced by someone else’s game-changing innovation. Consequently, you need to be working across all three of the time horizons that Google uses.
The general points we can learn from the Google story are:
- Innovation requires resources.
- Innovators need autonomy.
- You need to develop an innovation portfolio across several time horizons.
These three points are important for all organisations that want to be more innovative. It doesn’t matter if you are a big software company, a small accounting firm, a government department, or an educational institution – you can use these ideas. Learning through analogy is a critical skill to build. So the next time you hear about how innovation works at a organisation that is completely different from yours, try to think about what general lessons you can learn from them.