Harvard Business Review Bala Iyer and Thomas H.

Davenport

IT and Business Architecture Experimentation and Improvisation Analytical Decision Making Other relatively unusual forms of innovation
Google has clearly done something right
What has it done?

The Roots..
Vision
Technology and Strategy are inseparable and mutually permeable Technology should do more than just support the business Technology should engender strategic opportunity

Mission
Category-killing Search Engine Massive, scalable IT infrastructure Technology explicitly architected for innovation Well-considered organizational and cultural strategy

Practice Strategic Patience Exploit an Infrastructure Built to Build Rule Your own Ecosystem Exercise Architectural Control Build Innovation into Organizational Design Support Inspiration with Data Create a Culture Built to Build

Short-time profitability doesnt seem to matter

Ubiquity first, Revenues later..

Strategic Patience itself is NOT ubiquitous. Why?

Google monetized consumers intentions search and others Not so for everybody else..

What makes it work?

Strong monetization of consumers intention cash cows Clarity of purpose Attention to detail

Foundations
Strong market equity from principal product search engine Persistently developing proprietary technology operating systems, database systems Highly scalable infrastructure servers, networks, services

What do these yield?

Accelerated product development lifecycle for in-house innovations Support for third party developments, mashups and other innovations

Where has this led to?

An ecosystem of:
Developers who use the ecosystem infrastructure to launch their products Content providers who need an eco system to reach out to markets Content consumers who use search as the starting point for a variety of their own needs

Google the Keystone Component

The component that holds all others in place So, all else is dependent on you!

How does Google control the ecosystem?

Every transaction is performed through its platforms Hence:
Claim a large share of the value created Have access to all the data and processes and events

Result:
Very effective market analyses Accurate forecasts and predictions Crowd-sourcing in a controlled manner

Ability to track the performance of mashups Negotiate relationships from strong competitive positions Hedge the risks faced by third-party developers
Customers get: faster access to innovations Google gets: more ways to increase traffic to its platforms Developer gets: ability to tryout without contractual entanglements As a result: Avoid the appearance of competition.

Vulnerabilities
Keep the traffic going amidst competition Keep the ecosystem players trust

Budget innovation into job descriptions Eliminate friction at every turn Allow the market to choose which innovation will work Cultivate a taste for chaos

Strong focus on Analytics

Perform randomized experiments on the Internet Use panels to assess
Customer demand for new products Company and product performance Competitor performance Just for fun assessments

Employs an Idea Management System Democratic approach to innovation

Technocratic culture
Individuals prosper by intellect A consequence: Prediction markets!

Budgeted time for innovation Regular stimulus tech-talks Focus on:

People as the most important assets Learning and continuous improvement Results: Knowledge-work environment Design and occupancy of offices Approach to interviewing and hiring In exchange for the privileged treatment: Expects hard, almost obsessive work!

Google can control the evolution of its ecosystem No need for market surveys and statistical analyze

Exercise Architectural Control