Educators used to follow the auto industry because that's where all the lessons came from, says Bala Iyer. Then it was Microsoft. Now it's Google. In this month's Harvard Business Review, Iyer, an associate professor of technology operations and information management at Babson College, looked deep into Google's DNA to discern what makes it an innovation machine. Iyer talked with Kathleen Melymuka about what he and co-author Thomas H. Davenport discovered.
Let's talk about some of the key attributes that you say contribute to Google's success. The first is "strategic patience." What do you mean by that?
Look at their mission statement: "to organize the world's information and make it universally accessible and useful." This requires a long period to execute, and they're not kidding. CEO Eric Schmidt says it's probably going to take 300 years. When a company has such a powerful long-term mission, that sets it apart from the others. They go in knowing they're in for the long haul. Every action they take, you can see that.
In these days where quarterly results are everything, how can other companies emulate this?
Google won't play by those rules. Google changes the rules by this mission statement. They can take actions they feel are good for the long term. Google won't even give [Wall Street] guidance for their quarterly results.
This is a basic thing in business: You want to make sure you have a powerful mission statement. You can give people a lot of freedom to do what they want to do and be productive and innovative when you have a mission statement like this and allow people the freedom to operate within it. Companies do try, but sometimes the mission seems like it's separate from the company.
How does Google's infrastructure support innovation?
Everybody thinks that when a company is based on the Internet, you [get a] free ride on the Internet's infrastructure. But this company put billions of dollars into building things on top of the Internet. Google has its own operating system that works on top of the Internet and is based on Linux. It customizes the Internet to its advantage.
For example, Google deals with huge amounts of data. Data centers are very important to them. They need to be able to add them as necessary. When Google plugs in a data center, they can make it operational within eight hours, which is a phenomenal capability, but they have it because they made this investment. When they introduce new products and services, no one questions whether their infrastructure can support it.
I imagine this is something almost impossible to copy.
The lesson is not about building another billion-dollar infrastructure, but about how much you could customize to your own advantage. You could still layer your own system on top of the available public infrastructure. Isn't that what Salesforce.com is doing? Amazon's cloud, eBay's infrastructure -- that's what it is. The platform should be built on top of the available Internet. The idea is to put your own secret sauce on top of it to support your ecosystem.
This platform on top of the Internet even supports Google's product development, because they can test-drive products on their own infrastructure and can allow third parties to write products, which we're now calling mashups.
Let's talk about those.
Stacks have always been a big part of our industry. And the value is migrating up the stack. These guys are creating higher value. An example is Housingmaps.com. Somebody thought it would be a good idea to combine Craigslist and Google Maps to look at properties for rent. You get permission from Google, and that's a mashup.