Embracing Chaos

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So far this blog has discussed the importance of Discipline Systems and Collaboration to innovation, but there remains one piece to the innovation puzzle, chaos.  Chaos, like the Hindu god Shiva, is the creator and destroyer of all organizations.  When systems are not controlled, they devolve into chaos where the average movement of each piece is so random that the organization effectively stops.  Conversely, an over-controlled system will die from atrophy as new information from the outside is never absorbed and organizational progress is not allowed to emerge.  So how do system designers or organization leaders harness the power of chaos without risking anarchy? Let’s Google it!

When the company Google held its Initial Public Offering in 2004, it shared with its investors Google’s innovative management strategy to cultivate innovation known as “20% Time.”  Google encouraged each of its employees to abandon their daily work schedule for up to 20% of their workweek and devote it instead to coming up with creative solutions that benefited Google. The strategy was likely based on 3M’s “15% time” policy which 3M had been implementing for decades (of which generated such projects as Post-It Notes, Painter’s Tape, and clear bandages).

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So, did the company benefit from letting their employees spend 1/5 of their work time without any direction or accountability? Absolutely. In 2005, 20% time was responsible for up to 50% of Google’s product line.  Such Google hallmarks as Gmail, Google News, Google Reader, Google Maps, and even AdSense were created during 20% time.  In addition, the user data collected through Google Labs (a location for Google developers to showcase and test their ideas) became an invaluable resource to the company and allowed Google to improve a plethora of its other product offerings.  However, despite this success, once Google became publicly traded, the culture began to shift.

Throughout the late 2000’s and culminating with the shuttering of Google Labs in 2011, 20% time was effectively eliminated.  As Michael Schrage of the Harvard Business Review notes, Google’s move towards more controlled innovation comes from their leadership’s insistence that “the ‘data’ — not gut feel — is the ultimate driver and determinant of innovation success.” Schrage notes that this was likely a mistake because Google Labs was an undervalued data goldmine, just not in the controlled format sought by company leadership. The purpose of this shift, as described by Google, was to put “More wood behind fewer arrows,” by eliminating 20% across the company and instead “consolidating innovation” into the Google X moonshot program.

Chaoticians in the crowd, all two of you, know where this is heading…

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So far, since 2010 the Google X program has failed to provide any well recognized commercial products, and many researchers in the program have worries that the program is sputtering into oblivion.  In fact, the only innovations Google is known for post-20% time were developed largely outside of the organization; such as Android and Youtube which were purchased, or Chrome which was developed  (against the CEO’s orders, by the way) by Google’s founders Larry Page and Sergey Brin. This failure to innovate is repeated time and time again by large companies, typically at the point where some CFO under pressure fools himself and others that for tax purposes, the company should consolidate its R&D to make corporate balance sheets look better.

So what is the take-away?  Innovation cannot be compartmentalized into a single group or “innovation area.”  It must be cultivated across the organization by the people interacting with the product and customers themselves.  The 80/20 rule for allowing chaos has been shown to be an effective at Google as well as many other organizations to combat the innovator’s dilemma.

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