Thu, Feb 02, 2012 - Page 9 News List

The yin and yang of corporate innovation

Corporate innovation can be categorized by the balance between the top-down versus bottom-up design strategies used by Apple and Google

By Steve Lohr  /  NY Times News Service

Illustration: Mountain People

In the hunt for innovation, that elusive path to economic growth and corporate prosperity, try a little jazz as an inspirational metaphor.

That’s the message that John Kao, an innovation adviser to corporations and governments — who is also a jazz pianist — was to deliver in a performance and talk on Saturday at the World Economic Forum in Davos, Switzerland. Jazz, Kao was to say, 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.

Kao was to point to the very different models of innovation represented by Google and Apple, two powerhouses of Silicon Valley, the world’s epicenter of corporate creativity.

The Google model relies on rapid experimentation and data. The company constantly refines its search, advertising marketplace, e-mail 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, Steve Jobs had a standard answer: none.

“It’s not the consumers’ job to know what they want,” he would add.

The Google-Apple comparison, Kao says, highlights the “archetypal tension in the creative process.”

Google speaks to the power of data-driven decisionmaking, and of online experimentation and networked communication. The same Internet-era tools enable crowd-sourced collaboration as well as the rapid testing of product ideas — the essence of the lean start-up method so popular in Silicon Valley and elsewhere.

“These are business and management innovations lubricated by technology,” says Thomas Eisenmann, a professor at the Harvard Business School.

The benefits, experts say, are most apparent in markets like Internet software, online commerce and mobile 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,” says Randy Komisar, a partner in Kleiner Perkins Caufield & Byers, a venture capital firm, and a lecturer on entrepreneurship at Stanford.

That style of innovation is being applied well beyond Google’s products and Internet startups. The US National Science Foundation (NSF), for example, is embracing the formula to try to increase commercialization of the university research it finances. Last fall, the foundation announced the first of a series of grants for what it calls the NSF Innovation Corps. The 21 three-member teams received a crash course at Stanford in lean start-up techniques and have been given US$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,” says Errol Arkilic, program director at the foundation.

Yet while networked communications and marketplace experiments add useful information, breakthrough ideas still come from individuals, not committees.

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