Reverse Engineering Google's Innovation Machine

Even among internet companies, Google stands out as an enterprise designed with the explicit goal of succeeding at rapid, profuse innovation. Much of what the company does is rooted in its legendary IT infrastructure, but technology and strategy at Google are inseparable and mutually permeable - making it hard to say whether technology is the DNA of its strategy or the other way around. Whichever it is, Iyer and Davenport, of Babson College, believe Google may well be the internet-era heir to such companies as General Electric and IBM as an exemplar of management practice. Google has spent billions of dollars creating its internet-based operating platform and developing proprietary technology that allows the company to rapidly develop and roll out new services of its own or its partners' devising. As owner and operator of its innovation "ecosystem," Google can control the platform's evolution and claim a disproportionate percentage of the value created within it. Because every transaction is performed through the platform, the company has perfect, continuous awareness of, and access to, the by-product information and is the hub of all germinal revenue streams. In addition to technology explicitly designed and built for innovation, Google has a well-considered organizational and cultural strategy that helps the company attract the most talented people in the land - and keep them working hard. For instance, Google budgets innovation into job descriptions, eliminates friction from development processes, and cultivates a taste for failure and chaos. While some elements of Google's success as an innovator would be very hard and very costly to emulate, others can be profitably adopted by almost any business.

• Organizational structure and design
• Process improvement
• Organizational culture
• Data management
• Creativity
• Experimentation