Pramod says..

Anil,

While I do agree that Google is an amazingly cool company - we should be carefull when comparing different companies. Microsoft and Google are in totally different points in their life cycles - and have lots of different priorities in front of them - very often different from what meets our eyes.

While I am sure most companies want to be innovative - they have to do quite a lot of other stuff - esp. when they have a huge presence in the market.

Let me take the example of SAP - in the entreprise software market they are no. 1. Now it is as complex as anything can get in real world - but there are a lot of critics who say that it runs on yesterday's technology, that SAP is not innovative - but thats perhaps what one sees. But if you meet the guys at SAP - just as guys whom I know at Microsoft are - at the forefront of technology. But their problem is - well people like me - Managers - who make decision to buy their products. We can't (as much I like to!) change platforms easily - and they have to keep us happy to earn their bread.

Another aspect - companies like (ok not necessarily MS) but GM or 3M or GE were all innovative some time during their life. Have you read the book In search of excellence by Tom Peters, look at today's state of the companies he showcases! Google too will pass over and its place will be taken over by someone else.

Now, another book - which I liked quite a bit on this topic is Good to Great by Jim Colllins. Its interesting that he appreciates that cultural aspects have an impact on the innovativeness of companies. And it can change within companies based on leadership, market conditions etc. etc. over a period of time.

Deviating a bit, looking at people - unless someone goes through transformation like Steve Job of Apple, the personalities of people can mean what they are good at. Some ppl. are good at starting up things, some others at generating ideas, others in maintaining and running things and so on. A start up cannot be successfully managed by someone like for example Lou Gerstner - he is more the maintenance guy. Where as someone like Jeff Bezos managed starting up based on ideas he gathered from around. The google guys - like Stever Jobs first edition are the idea guys I think.

Obviously people can transform but that doesnt happen often.

Just some thoughts :-)
Pramod

Anil says..

» Pramod
Wow, you've put a lot on my reading plate! It is true that companies can change with time based on leadership and market conditions, but this is a side-effect of growing big. You are engaged in getting into more markets, creating more products, acquiring more companies and becoming a corporation, and before you realize it, you have become a slow behemoth like all the old companies you out-innovated in the first place.

The good news about Google is that they are aware of this (which can be seen in the way they managed their IPO - they did not relinquish control to the shareholders in order to be sufficiently immune to shareholder pressure) and they haven't lost focus (which, is not to be a search engine like most people assume, but to organize the world's information) They still function like a geek company, not a billion-dollar corporation. (Which big company would tell all it's employees to spend 20% of their time on projects of personal interest?)

Apart from everything you said, another probable reason why we do not see such innovation is that the companies that are small cannot afford to spend their resources on innovations that may not be financially attractive in an obvious way, and the companies that are larger (and can afford to innovate) are too set in their ways to innovate and change.

What is interesting is that Google has become successful due to intense geek loyalty (the kind that only Apple is intimately familiar with). Since they are definitely aware of this, I would wager that they will try hard to remain the cool company that they are for a long time to come :-)

Pramod says..

Indeed Anil - I was not really talking about Google - I hope they would remain the way they are! I am a big Apple fan - so I do have soft-corner for that kind of feeling. But I wouldn't take it too emotionally.

Since I work in a science driven company myself (not IT, but biotech, agroscience - thought am not a science person :-) - I understand the importance of innovation.

What I gather from my observation is this: these days most of what goes on in big organisations are driven by "shareholder benefits" - and since shareholders - unlike what it was thought it will when the share market concept was born - today are mostly investment bankers/pension funds - looking at short term growth of their portfolio - which leads to todays senior management / CEOs being driven by stock performance. Now there is still not a accepted and viable model that translates innovation to stock value. I know from personal experience how difficult it is to actually come up with a description of explaining innovation on a daily basis to the investment banker community.

Now one could argue that stock prices high tech companies are high and it does not perhaps support what I said earlier. But I think stock prices are driven not really by how innovative a firm is - rather by hype surrounding it. I personally dont consider Infosys to be innovative - but they are one of the high performing high tech stocks in the country. Same goes for most high performers in the stock market. Google - if you discount the effect of the enormous public awareness it has - I wonder how much of its stock performance is driven by knowledge of its innovativeness!

:-)