Google Reworks Its Approach to Innovation

November 15, 2011

In the aftermath of Steve Jobs’ death, innovation is a hot topic. Even consumer television programs stick in a reference to Mr. Jobs’ attention to detail, his brush with oriental philosophy, and his mental processes which would get him deleted from the interview pool at General Motors. Since Mr. Jobs’ death, Apple has made some mistakes which suggests that the loss may have generated some negative karma for Apple.

Apple may have innovation challenges going forward. I now hypothesize that Google has here and now innovation problems, and I think the firm’s most recent actions underscore that innovation is a concern to Google’s senior management.

As you may know, Google’s not-so-quiet shift from “we do it all in the Googleplex” to a more traditional approach to finding great ideas turned out the lights in the “old” Google Labs. Now many of the “real” consultants and journalists will point out that Google is an innovation machine. Examples range from the upgrade to Google+ Facebook type service to the tweaks to maps, Gmail, and Google Apps. Point taken, but let me summarize the thought that was triggered by three apparently unrelated announcements. Some of the azure chip crowd will assert that I, once again, am off base, living in rural Kentucky, and past my prime.

No problem. But consider:

First, last week Google bought two companies. Google has been acquiring companies quickly, and I thought it was a combination of getting people and technology. You can read about the deals in “Google Acquires Apture and Katango”. Apture developed an in-browser search gizmo described as a “glossary for the Web,” and Katango offers an automatic friend manager. (The Katango url was dark, but the eWeek story to which I linked explains what Katango did or does.) Net net: Buying ideas.

Google is throwing money, people, and public relations at its innovation problem. Is this is warning light that the engines of creativity at Google are ill-suited to breakthroughs that neutralize challenges from Amazon, Apple, Facebook, and other firms which are gaining momentum in lucrative new markets.

Second, my dead tree copy of the New York Times ran a front page story about Google’s “new” and presumably “real” Google Labs. You can find it in the November 13, 2011 production copy which arrives in Louisville with a November 14, 2011, date. “Google’s Lab of Wildest Dreams” is one of those big company public relations coups that make smaller outfits turn green with envy. I learned in the carefully shaped story that Google has a “new” Google Labs, Google X. It is a “clandestine lab where Google is tackling 100 shoot-for-the-stars ideas.” So the demise of the “old” Google Labs was not the “termination with extreme prejudice” of “labs.” Google just trimmed the fat and narrowed its focus to 100 “shoot-for-the-stars” ideas. I understand gentle pruning of innovative deadwood, reassignment of bright folks without hurting too many egos, and the focus thing. Net net: Focusing the best of the best on 100 problems to get a home run.

Third, ITProPortal recycle ad story from Globes, an Israeli newspaper, that Google was “planning to establish an incubator for startups in Israel” in 2012. “Google to Incubate Startups in Israel” said:

The company said that it plans to host 20 pre-seed start-ups or 80 people in the incubator program. Google plans to give the start-up training for a minimum of three months. Google said that it was interested in companies developing projects based on open source technologies similar to Android and Chrome web browser.

Israel has some innovative folks. My Overflight service is chock-a-block with references to Google’s activities in Israel, but this is another public relations or marketing nudge related to innovation. Net net: Fund smart people in Israel and presumably elsewhere like Beijing, Moscow, etc.

My take is that Google is becoming more like a traditional big company. I know that many Google satraps see the outfit as agile, stuffed with geniuses, and one of the, if not the most, innovative company on earth.

Not so fast.

First, Google has 55,000 or so people, hundreds of products and services, and faces challengers across most of its product sector. Search seems to reign supreme, but I keep thinking about the legal hassles and pesky companies like Foundem who might put a kink in the search business.

Second, Google is disruptive, but I am not convinced disruption per se is innovation. If anything, Google seems to be counting on disruption to create “products that stick.” The approach is different from the plodders like Samsung or pre-Jobs Apple. When I take a bird’s-eye view look at the sprawling Google empire, I see search from the desktop and ads served in a traditional browser as the primary source of revenue. Who can argue with $40 billion, but we have a bit of instability in revenue. An ad downturn could make life quite interesting quickly. Lawyers, economics, or social services like Facebook could do the job alone or in confluence.

Third, innovation is desirable regardless of an organization’s size. However, when innovation spawns multiple strategies in a short period of time after the once primary engines of innovation were presumably doing the job, I have three questions:

  1. What went wrong at the “old” Google Labs?
  2. What is the innovation payoff from Google’s many acquisitions? I have been waiting for fruit to come on the market from the company’s purchase of Transformics five years ago?
  3. Isn’t this about face with regard to innovation an flashing signal that illuminates a corner of the management world that says, “Desperation Curve. Innovate Immediately”?

I have to go back to the goose pond. I am trying to figure out how so many companies can be in the search business and not use the word “search.” I will keep my eye on this preliminary interpretation of Google’s “new” approach to “real” innovation. Who knows? Maybe an unemployed journalist, a failed webmaster, or a person with a degree in 19th century British friction will pick up on this idea and set me straight. I have excluded the financial implications of this shift in Google’s innovation methods from this free blog post. Paying customers only get that analysis. It is the time=money thing to which the AtomicPR type of firms and their clients do not relate. There is fallout when there is a certain type of reaction. Sigh.

Stephen E Arnold, November 15, 2011

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One Response to “Google Reworks Its Approach to Innovation”

  1. sperky undernet on November 15th, 2011 8:27 am

    Looks to me like Google’s “new” “old” approach is 2-pronged:

    * testing proving Google+ as an outsourcing vehicle with its growing developer community and trying to stack up killer apps to grow its base of chromebook and android users.

    * ultimately this is probably a drive to replace pc-based search advertising with Google+ commercial channel gatekeeper functions. I can see the day that someone wants to enter your circle and Google will tell you that according to its analytics, the potential new addition to your circle represents a commercial or other opportunity and that will cost you x dollars. They can do that to all or selective people wanting to join the circle too, profitting twice from both “buyer” and “seller” just like some cell carriers charge both sides of a call.

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