I wanted to post the second part of slides today but I am in Chicago this week and have no access to my other Thinkpad. So I will just write about it and follow up with the slides next week.
There are no doubts many barriers to innovation. Or you can say there is a glass ceiling and you hit that ceiling pretty easily. Organizational structure and capital resource allocation process can be considered as hard structural barriers to innovation. Less obvious challenges include the attitudes of people towards risks and accommodating the “misfits” (The best innovators I’ve known are the “misfits”). What stop company from innovating?
Organization Inertia. Discontinuous innovation costs a lot of brain cells for a potentially exciting but uncertain reward. Instead of taking leaps into the unknown it is often easier and more predictable to squeeze a little bit more performance or creating extensions or simply cut cost through consolidation.
Short-termism. The all-pervasive factor is that of short-termism. This is the innovation paradox in which companies do not innovate purposefully or ambitiously, even though they recognize its importance, because of quarterly reporting.
Corpporate Culture and DNA. Companies have not invested in their innovation framework or processes. Innovation framework and best practices are not commonly known and applied.
Open Innovation. An open innovation model opens up the funnel that needs to be adapted to encompass flows of ideas outside an organization. Managers outside the tech world are not trained to exploit external innovations. It can be difficult for a business steeped in the principles of competition to embrace co-opetition. How do you co-innovating with your competitors? The way companies generate ideas and bring them to market has been undergoing a fundamental change. In the old model of closed innovation, enterprises adhered to the following philosophy: Successful innovation requires full control, from generating ideas, product development, manufacturing, marketing, to distribution. For the last 50 years, that model worked well, but not anymore.
Look at what Facebook is doing today. It is the first social networking site to open its operating system to outside developers. At its first public event at the SF Design Center this May, Facebook announced that it will give access to third-party developers like Amazon, Digg, Photobucket and Twitter - to build applications that will be integrated into the new Facebook Platform. Zuckerberg admited that with just some 85 engineers, they can't possibly compete with thousands of developers creating social applications. He also said Facebook will be competing with those guys on a level playing field.
So Google is now trying to beat Facebook at its own game. Be even more open than Facebook ever was. Google announced a new set of APIs enabling developers to build on Google’s socialgraph data. Initially centering around Orkut and iGoogle, the plan could expand on to the other Google Apps including Gmail and Google Talk. I think Google Docs and Gadgets will be a major part of this.
