Google is wildly innovative. It recently topped Fast Company magazine’s list of the world’s most innovative companies, and it regularly ranks among everyone else’s top two or three most- innovative. Google is also spectacularly successful. Despite formidable competition from giants such as Microsoft and Yahoo!, Google’s share in its core business—online search—stands at a decisive 84 percent, more than five times the combined market shares of all other competitors combined. The company also dominates when it comes to paid search advertising, with 80 percent of that online ad segment. And that doesn’t include paid search on mobile devices, where Google has close to a monopoly with a 98 percent share. But Google has grown to become much more than just an Internet search and advertising company. Google’s mission is “to organize the world’s information and make it universally accessible and useful.” In Google’s view, information is a kind of natural resource— one to be mined, refined, and universally distributed. That idea unifies what would otherwise appear to be a widely diverse set of Google projects, such as mapping the world, searching the Internet on a smartphone screen, or even providing for the early detection of flu epidemics. If it has to do with harnessing and using information, Google’s got it covered in some innovative way.An Innovative Approach to InnovatingPerhaps more than anything else, Google knows how to innovate. At many companies, new- product development is a cautious, step-by-step affair that might take a year or two to unfold. In contrast, Google’s freewheeling new-product development process moves at the speed of light. The nimble innovator implements major new services in less time than it takes competitors to refine and approve an initial idea. For example, a Google senior project manager describes the lightning-quick development of iGoogle, Google’s customizable home page:Such fast-paced innovation would boggle the minds of product developers at most other companies, but at Google it is standard operating procedure. “That’s what we do,” says Google’s vice president for search products and user experience. “The hardest part about indoctrinating people into our culture is when engineers show me a prototype and I’m like, ‘Great, let’s go!’ They’ll say, ‘Oh, no, it’s not ready.’ I tell them, ‘The Googly thing is to launch it early on Google Labs [a site where users can try out experimental Google applications] and then to iterate, learning what the market wants— and making it great.’” Adds a Google engineering manager, “We set an operational tempo: When in doubt, do something. If you have two paths and you’re not sure which is right, take the fastest path.” When it comes to new-product development at Google, thereare no two-year plans. The company’s new-product planning looks ahead only four to five months. Google would rather see projects fail quickly than see a carefully planned, long, drawn-out project fail.Google’s famously chaotic innovation process has unleashed a seemingly unending flurry of diverse products, most of which are market leaders in their categories. These include everything from an e-mail service (Gmail), a blog search engine (Google Blog Search), an online payment service (Google Checkout), and a photo-sharing service (Google Picasa) to a universal platform for mobile-phone applications (Google Android), a cloud-friendly Internet browser (Chrome), projects for mapping and exploring the world (Google Maps and Google Earth), and even an early warning system for flu outbreaks in your area (FluTrends). Google claims that FluTrends has identified outbreaks two weeks before the U.S. Centers for Disease Control and Prevention.
Competing Through InnovationNot only is Google innovative, but it uses this core competency as a primary competitive weapon. Take two of its biggest product introductions to date, both of which have been launched in the last year. First, there’s Google Play. Even though it created the number one smartphone operating system in the world— Android—Google still could not capture the purchases and activities of all those Android users when it came to apps and entertainment media. Nor could it come close to matching its operating-systems penetration in the tablet market. So Google combined and redesigned everything it had in that department and launched Google Play, an iTunes-esque marketplace for apps, music, movies, and games. Although one reviewer points out that this launch “lacks the polish of Apple,” he goes on to say that “there should be little doubt . . . about Google’s determination to change that.”Google’s second recent major product introduction is Google+, an all-purpose social network. With Google+, the search leader fired a shot right over the bow of Facebook. In response, Facebook founder and CEO Mark Zuckerberg put all Facebook employees on “lockdown” alert, working around the clock to copy the best features of Google+ and accelerate development of other Facebook features already being developed. In only a year’s time, Google+ has acquired 250 million registered members, more than one-quarter of those who now share their lives on Facebook. Like Google Play, Google+ is a cutting-edge product. Such new products put Google in the dash for riches in completely new competitive arenas. In addition, they give Google a new edge against its toughest digital competitors—the likes of Amazon, Facebook, Apple, and Microsoft—in what Nokia’s CEO refers to as the “war of Internet ecosystems.”Innovation Without BordersGoogle is open to new-product ideas from just about any source. What ties it all together is the company’s passion for helping people find and use information. Innovation is the responsibility of every Google employee. Google engineers are encouraged to spend 20 percent of their time developing their own “cool and wacky” new-product ideas. And all new Google ideas are quickly tested in beta form by the ultimate judges—those who will use them. According to one observer, “Anytime you cram some 20,000 of the world’s smartest people into one company, you can expect to grow a garden of unrelated ideas. Especially when you give some of those geniuses one workday a week—Google’s famous ‘20 percent time’—to work on whatever projects fan their passions.” Such thinking sends Google beyond its own corporate boundaries in search of the next wave of big ideas. Recently, Google hosted what it called the “Solve For X” conference. The company invited about 50 of the smartest people in the world to tackle some of the world’s biggest problems. The emphasis was on “radical.” Just how radical were some of the ideas that emerged? How about turning contact lenses into computer monitors with headsup displays, packed full of data. Or how about solving the world’s clean water problems through existing desalinization technologies? If that doesn’t go far enough for you, how about using MRI technology to put images from the human mind onto a computer screen? Just the fact that Google organized Solve For X indicates the type of innovator Google is. For Google, innovation is more than a process—it’s part of the company’s DNA. “Where does innovation happen at Google? It happens everywhere,” says a Google research scientist.If you talk to Googlers at various levels and departments, one powerful theme emerges: Whether they’re designing search engines for the blind or preparing meals for their colleagues, these people
feel that their work can change the world. The marvel of Google is its ability to continue to instill a sense of creative fearlessness and ambition in its employees. Prospective hires are often asked, “If you could change the world using Google’s resources, what would you build?” But here, this isn’t a goofy or even theoretical question: Google wants to know because thinking—and building—on that scale is what Google does. This, after all, is the company that wants to make available online every page of every book ever published. Smaller-gauge ideas die of disinterest. When it comes to innovation, Google is different. But the difference isn’t tangible. It’s in the air— in the spirit of the place.Questions for Discussion1. Based on information in this chapter, identify major similarities and differences betweenthe new-product development process at Google versus that found at most other companies.2. Is Google’s product-development process customer centered? Team based? Systematic?3. Considering the product life cycle, what challenges does Google face in managing itsproduct portfolio?4. Is there a limit to how big Google’s product portfolio can grow? Explain.5. Will Google be successful in markets where it does not dominate, such as social networksand app/entertainment stores? Why or why not?


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