Best practice innovation? Google vs Apple
Companies looking to ignite their innovation engines have two admirable models to emulate: Google and Apple. Both firms have used innovation to become wildly successful market leaders. Their cutting-edge innovation strategies infuse all facets of their business, from product functionality and operational practices to business model design. At the same time, Google and Apple epitomize two different approaches of fostering and implementing innovation.
Google’s vision is about using the power of internet technology to enable business, operational and product innovation. Inspired by its own experience as a lean Silicon Valley start-up, Google’s model relies on bright and passionate minds, rapid experimentation and immediate market feedback to develop innovations. New products and features are quickly introduced online, refined and then re-launched. At any one time, there could be dozens of innovation projects under way, many of which could be disruptive in nature such as its self-driving car.
Unwilling to rest on its laurels, the company’s mandate is to continuously improve its search, advertising marketplace, e-mail and other services, based on how people use its offerings. Google’s approach could best be described as bottom-up: customers become partners in product design and operational enhancements through their immediate testing and feedback of new innovations.
The key components of this strategy are employee experimentation, data-driven decision-making, online testing and networked communications. Powerful web tools bring the market inside the firm, enabling crowd-sourced collaboration as well as the rapid prototyping of product ideas. Furthermore, many employees must commit a certain amount of time to germinating new ideas and creative problem-solving.
Google truly understand Internet economics – rapid software testing, powerful network effects and low cost product distribution – so it can expend relatively modest amounts of time, money and risk to launch new projects. This innovation model is ideal for the development of Web-based products as well as the creation of blue ocean markets like Internet software, online commerce and mobile applications.
Apple pursues a very different innovation strategy. Though networked communications and marketplace experiments add useful information, breakthrough ideas and the fortitude to sustain them come from passionate individuals, not committees or thousands of beta testers. As compared to Google, Apple’s innovation model is more edited, intuitive and top-down. “There is nothing democratic about innovation,” says Paul Saffo, a veteran technology forecaster in Silicon Valley. “It is always an elite activity, whether by a recognized or unrecognized elite.” The customer plays a minor role in the early stages of innovation. When asked what market research went into the company’s elegant product designs, Steve Jobs had a standard answer: none. “It’s not the consumers’ job to know what they want.”
Apple’s more directed approach is also a function of the business that it’s in. Apple’s physical world is far different from Google’s realm of Internet software, where writing a few lines of new code can change a product instantly. Apple must consider a multi-year technology and supply chain roadmap for its products, with new models expected regularly from its zealous users. Furthermore, the careful melding of hardware with software – a vital differentiator for Apple’s products – is a challenge with multidisciplinary systems design that must be orchestrated by a firm, guiding hand.
Much of Apple’s impetus for innovation comes from the legacy of Steve Jobs as well as the senior leadership he recruited. Their job is to harvest a variety of Apple’s information-gathering networks for ideas and inspiration. As such, top managers need be excellent synthesizers of information ranging from popular culture to semiconductor design.
On average, Apple looks to innovation to deliver product and operational home runs. The Company tends to put considerable resources and thinking behind a few big ideas and then implement them with excellence and fanfare. Other vital functions such as product supply, marketing and customer service play a critical role in ensuring new innovations are fully exploited.
Which approach works best?
It depends on how you measure success and shareholder value. The better question may be: is there one best approach to innovation? My experience advising firms with their innovation strategy suggests that combining the best and most practical aspects of each approach will yield the best results. According to Saffo, fostering innovation requires “an odd blend of certainty and intellectual rigour and openness to new information and new ways of thinking” In other words, it should be a blend of top-down guidance and bottom-up discovery mixed with a dash of open innovation tactics.
Open innovation sesame
Both organizations have not been shy leveraging external sources of innovation. Apple discovered its point-and-click mouse and graphical on-screen icons (which later became the standard for the personal computer industry) in 1979 at Xerox. In 2010, Apple purchased Siri, a small Silicon Valley start-up, for its talking iPhone question-answering application. Siri was originally a program funded by the Pentagon. In 2009, Google launched its Google Ventures program, a comprehensive open innovation platform. Google Ventures includes a start-up university and innovation lab – places where entrepreneurs can develop their products, collaborate and tap into Google employees.
Though Apple and Google may pursue very different paths to innovation, they do share many innovation-enabling attributes such as a nurturing culture and management system. Moreover, the gap between their two models may be shrinking somewhat. Recently, Google moved toward a top-down approach by culling a diverse collection of more than two dozen projects. Steve Jobs’ replacement, operational expert Tim Cook, will almost by default be more of a bottom-up leader than his predecessor. Ultimately, both models may end up converging.
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