January 27, 2012
In the hunt for innovation, that elusive elixir of economic growth and corporate prosperity, try a little jazz as an inspirational metaphor.
That’s the message John Kao, an innovation adviser to companies and governments—who is also a jazz pianist—plans to deliver in a performance and talk Saturday at the World Economic Forum in Davos, Switzerland. Jazz, he says, demonstrates some of the tensions in innovation, between training and discipline on one side and improvised creativity on the other.
In business, as in jazz, the interaction of those two sides, the yin and the yang of innovation, fuels new ideas and products. The mixture varies by company. To illustrate, Mr. Kao points to the very different models of innovation represented by Google and Apple, two powerhouses of Silicon Valley.
The Google model relies on rapid experimentation and data. It constantly refines its search, advertising marketplace, email and other services, depending on how people use its online offerings. It takes a bottom-up approach: customers are participants, essentially becoming partners in product design.
The Apple model is more edited, intuitive and top-down. When asked what market research went into the company’s elegant product designs, Steven P. Jobs had a standard answer: none. “It’s not the consumers’ job to know what they want,” he added.
The Google-Apple comparison, according to Mr. Kao, highlights the “archetypical tension in the creative process.”
Many voices
The tools used by Google also enable crowdsourced collaboration and the rapid testing of product ideas, the essence of the lean startup method. “These are business and management innovations lubricated by technology,” said Thomas R. Eisenmann, a professor at the Harvard Business School.
The benefits, experts say, are most apparent in markets such as internet-based software, online commerce, and applications for smartphones and tablets. “The cost of creation, distribution and failure is low, so it takes relatively little time, money and effort to float trial balloons,” said Randy Komisar, a lecturer on entrepreneurship at Stanford and a partner in the venture capital firm Kleiner Perkins Caufield & Byers.
That style of innovation is being applied beyond startups. The National Science Foundation, for example, is embracing the formula to try to increase commercialization of the university research it finances.
Last autumn, the foundation announced the first of a series of grants for the NSF Innovation Corps. The 21 three-member teams received a crash course at Stanford in lean startup techniques and have been given $50,000 each and six months to test whether their inventions are marketable.
The lean formula, with its emphasis on constantly testing ideas and products with customers, amounts to applying “the scientific method to market-opportunity identification,” said Errol B. Arkilic, program director at the foundation.
Yet while networked communications and marketplace experiments add useful information, breakthrough ideas still come from individuals, not committees. “There is nothing democratic about innovation,” said Paul Saffo, a veteran technology forecaster in Silicon Valley. “It is always an elite activity, whether by a recognized or unrecognized elite.”
Successful innovation, Mr. Saffo observed, requires “an odd blend of certainty and openness to new information.” In other words, it is a blend of top-down and bottom-up discovery.
Looking outside
Open innovation is not a new idea. It flourished, in its way, even in the late 19th and early 20th centuries, noted Tom Nicholas, a historian at the Harvard Business School.
In fields such as electricity, pharmaceuticals and communications, big companies—including General Electric and Dow Chemical—routinely monitored the research beyond their walls and bought or licensed promising work, especially the inventions of university scientists. The result, Mr. Nicholas said, was a thriving “ecosystem of private and corporate innovation.”
A century later, GE is opening a software center in Northern California to make its machines more intelligent with data-gathering sensors, wireless communications and predictive algorithms. The goal is to develop machines, such as jet engines or power turbines, that can alert their human minders when they need repairs before equipment failures occur. Such smarter machines, the company says, are early arrivals in what it calls the Industrial Internet.
To tap outsider ideas, GE’s research arm has made investments with venture-capital funds in clean energy technology and healthcare, and it works with companies, government labs and universities on hundreds of collaborative projects. “We’re much more externally focused and connected to the outside world than we were several years ago,” said Michael Idelchik, GE’s vice president of advanced technologies.
Rapid cycle
Apple’s devices typically have life spans measured in a few years instead of decades, with new models introduced regularly. But like GE, Apple is in the hardware business, where innovation cycles are beholden to the limits of materials science and manufacturing.
Apple’s physical world is far different from Google’s realm of internet software, where writing a few lines of new code can change a product instantly. The careful melding of hardware with software in Apple’s popular products is a challenge in multidisciplinary systems design that must be orchestrated by a guiding hand—though it will no longer be the hand of Mr. Jobs, who died in October.
Apple has repeatedly displayed its openness to new ideas and influences, as exemplified by the visit Mr. Jobs made to the Palo Alto Research Center of Xerox in 1979. He saw an experimental computer with a point-and-click mouse and graphical on-screen icons, which he adopted at Apple. It later became the standard for the personal computer industry.
In 2010, Apple bought Siri, a personal assistant application for smartphones. At the time, it was a small startup in Silicon Valley that originated as a program in the Defense Advanced Research Projects Agency of the U.S. Department of Defense. Last year, Siri became the talking question-answering application on iPhones.
Apple product designs may not be determined by traditional market research, focus groups or online experiments. But the company’s top leaders, recruited by Mr. Jobs, are tireless seekers on subjects ranging from microchip technology to popular culture. “It’s a lot of data crunched in a nonlinear way in the right brain,” said Erik Brynjolfsson, director of the Center for Digital Business at the Massachusetts Institute of Technology.
Apple and Google pursue very different paths to innovation, but the gap between their two models may be closing a bit. In the months after Google cofounder Larry Page took over as chief executive last April, the company eliminated more than two dozen projects, a nudge toward top-down leadership. And Apple CEO Timothy D. Cook will almost surely be a more bottom-up leader than Mr. Jobs.
“What we’re likely to see,” Mr. Kao said, “is Google and Apple each borrowing from the playbook of the other.”
Copyright © 2005 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.
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