Innovation at Google

Google has a famous strategy for innovation: Give each engineer one day every week to work on blue-sky, big potential ideas of their own choosing, and only require them to work on their “official” assigned project four days each week.  When I describe this to executives, I often get this question: “Why wouldn’t the engineer leave and start up his own company with that great idea? How does Google make sure they benefit from this investment in their staff?”

One way they might do it is by making their engineers sign some sort of agreement stating that “any ideas developed while employed at Google are Google property” etc. etc.   So far, I’ve seen no evidence that Google has done this.  (If they do, it’s never appeared in print.)  And in fact, Google does have a problem with employees leaving the company and taking their ideas with them; this was the focus of a recent Wall Street Journal article titled “Google searches for ways to keep big ideas at home”*.  Three start-ups that emerged from Google include Ooyala, Aardvark, and FriendFeed.

Google has never had a formal process for senior executives to review the blue-sky ideas that engineers work on one day a week.  So a lot of those ideas fail to move forward, sometimes because they require resources that only senior management can allocate.  So now, as the WSJ article reports, Google has initiated “innovation reviews” where each executive presents the most promising ideas from within their own division.  CEO Eric Schmidt is there to listen, and so are the founders Page and Brin.

The problem is in getting a promising idea from the early stage, to the next stage where it’s developed enough to see how a prototype might work.  And typically, that doesn’t happen without some management focus and some allocation of resources.  So there’s a new consensus at Google that too few of their one-day-a-week ideas are turning into blockbusters.

Another way Google is addressing the problem is to give a few engineers, with extremely promising ideas, even more than one day a week–in some cases, giving them full-time to work on their idea.  The new collaboration tool, Google Wave, resulted when two brothers in Australia were told to go all-out on their idea, a new communication system to replace email.  Top leaders also assigned the two brothers dozens of employees.

Now that’s something you wouldn’t get if you left the company with your idea–unless you got some very deep-pocketed venture capitalists to fund you.  That’s a good argument to stay at Google; as CEO Eric Schmidt puts it, to be “part of a start-up within Google.”  But it can’t happen without adding some structure, criteria, and resource allocation mechanisms to their innovation process.

*Jessica E. Vascellaro, WSJ, June 18, 2009, p. B1, B5: “Google searches for ways to keep big ideas at home”.

6 thoughts on “Innovation at Google

  1. • What is the organizational structure of Google?

    • What is the biggest challenge that Google is facing?

    • How do you think the organizational culture of Google fosters creativity/innovation in the workplace?

    1. Google’s structure and strategy depends critically on the high profit margins they make from their core business of search. I think their biggest challenge is to diversify their revenue stream; but they’re doing the right things–by for example having their engineers devote 20 percent of each week to innovative new ideas.

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