Understanding and Creating Innovation

From the Pages of “How Google Works” by Eric Schmidt and Jonathan Rosenberg [Part 5]

We have talked about the importance and power of effective communication.

We have also gained valuable insights from the way Google handles and distributes information throughout the company.

And lastly, we’ve learned that effective, open and honest communication are built upon the foundation of trust that transcends boundaries between a leader and his employees.

In case you missed this post, you read about it here.

For the last post of our How Google Works series, we will talk about a concept that most businesses failed to grasp but Google, on the other hand, knows too well.

We will talk about innovation — what it is and what you should do to achieve it.

Defining Innovation

For many people, innovation means the next big thing. And there are many companies who want to achieve this. In fact, in 2011 alone, the Wall Street Journal recorded over 33,000 appearances of the word in annual and quarterly company reports in the United States.

For Google, on the other hand, innovation is not just the next big thing —- it’s about creating a new, surprising and radically useful product.

When is the Right Time to Innovate?

So I have this great idea. Does that mean I can go forward and “innovate” right away? If you’ll ask Eric, he will probably say, “Wait! Hold on! Before you do that, let see if there is a proper context for that innovation first.”

Google uses three simple questions to determine whether or not the idea is a go.

  1. Does the idea addresses a big challenge or opportunity that will affect the lives of hundreds or even billions of people?
  1. Is the idea or solution extremely different from the ones that are existing in the market today?
  2. Given the current technology, is the idea feasible enough? Is it achievable in the not too distant future?

How to Create a Culture for Innovation

Do you want to develop an innovative culture inside your company? Below are some of the stuffs I learned from How Google Works.

You Cannot Own, Schedule and Demand Innovation

If you want to start an innovative culture in your company, you can’t just randomly call a person, assign him as Chief Innovation Officer and then mandate him to innovate something. Innovation never works that way.

If you want to start an innovative culture in your company, you can’t just randomly call a person, assign him as Chief Innovation Officer

Google’s Udi Manber’s solution is this, “Innovative people do not need to be told to do it, they need to be allowed to do it.” When we look at innovation this way, it takes on a new meaning.

As Eric puts it, “innovation has to evolve organically” inside your organization. How? You’ll learn about it in the succeeding sections.

Think Big

When I was working as a service volunteer, my leaders would always tell us to “AIM HIGH AND SHOOT FOR THE SKY!” This kind of mentality is a prerequisite to innovation.

At Google, “you are not thinking big enough” is common phrase that you’ll hear from the execs when you present something to them. When you think big, you are giving your employees (the ones who “innovate”) more freedom.

And with it comes creativity — another key component of innovation.

When you think big, you are giving your employees (the ones who “innovate”) more freedom

Dreaming big attracts big talents too. It’s an awesome and highly effective recruiting and employee-retaining tool. If you are to choose to work between two companies, where will you work?

To company A who wants to make things 10x better? Or to company B who settles on a less risky 10% improvement?

Set High Goals — So High that It’s almost Impossible to Achieve Them

When setting goals, there are 2 important things you need to consider:

(1) don’t set your goals too low so you’ll look good and awesome at the end of the day and

(2) don’t set it too high that even the next generation of smart creatives won’t achieve it.

The key here is to set goals or objectives that are difficult enough to make you stretch but are still doable within the given time frame.

And once you’ve set your goals, measure the progress (through key indicators) and always hold your employees accountable! Let me share this quote from a famous leader:

“Where performance is measured, performance improves. Where performance is measured and reported, the rate of improvement accelerates.”

Allocate Your Company Resource Wisely

You cannot achieve innovation without investing some of your company’ resources (like money and manpower) into it.

However, the question here is not whether or not you’re going to allocate but how much? At Google, executives follow a 70/20/10 rules when managing their resources.

At Google, executives follow a 70/20/10 rules when managing their resources

Seventy percent goes to projects that are related to the core business (where you get most of your revenues from) while 20% goes to emerging products that are under development.

The remaining 10% goes to innovation which could generate a huge payout despite its high risk of failing. Why only 10?

Well, aside from the fact that you don’t want your company to go bankrupt due to a failed R&D project, Eric teaches us in How Google Works that “creativity loves constraints”.

The 20 Percent Time

Remember when I told you earlier to allow you smart creatives to innovate? This how you do it. At Google, all of their engineers can use 20% of their time to do anything they want — now this is freedom.

Rest assured, since you’ve hired employees that are really passionate about their job (I hope), they will less likely spend 20% of their time in the cafeteria or goofing around. They will just simply do the thing they love!

At Google, all of their engineers can use 20% of their time to do anything they want

Not buying it? Well, think about Google Now, Google Suggest (this is when Google “anticipates” your search query and gives you suggestions before you’re done typing) and transit information in Google Maps — these are all products of 20% time!

Acknowledge That Great Ideas Come from Everywhere

Great ideas don’t just come from you nor from your employees. It stems from everywhere. If you want to innovate, don’t forget to involve the community.

Take for example Google Maps, Android, Google App Engine and Google Web Toolkit. Some feature or contents of these products are contributed by thousands of equally passionate non-Googlers from all over the world.

Don’t be Afraid of Failure. And When You Do, Fail Well

Due to the high risk nature of innovation, you are always bound to experience minor and major failures along the way. When you do, remember these two quotes that Eric used in his book:

“It helps to see failure as a road, not a wall” – Scott Adams

“Good judgment comes from experience; experience comes from bad judgment” – Mulla Nasrudin

If you want to innovate, learn from your mistakes. As Eric puts it, “Any failed project should yield valuable technical, user and market insights that can help in the next effort”.

Google is also not immune to tremendous failures. When Google Wave failed, it was such a big loss.

But (note how Google responded to this failure) instead of lamenting on a corner, Google’s engineers took valuable pieces of Wave and voila, hello Google+ and Gmail.  

When you sense that failure is imminent, another key to failing well is pulling the plug right away. This way you keep your company from losing more of its precious resources.

My Final Words

There you have it! I hope you’ve learned valuable insights from this post. And I pray it’s enough to get you started on building an innovative culture in your company.

Before I let you go, I would like to thank you for following our How Google Work series.

It has been a fun ride!


Written By

Lenmark Anthony Baltazar

I have been living a life of HR for as long as I can remember. My experiences helped me realize that true happiness comes from being a blessing to the lives of others. I hope my skills and talents will be a blessing to you as well.