Google: Experienced brain drain, as the brilliant engineers that joined a younger tech leader in order to have an impact and build innovative products started to leave because they struggled with an increasingly bureaucratic organization. Google took a multifaceted approach to this problem by not only increasing pay and emphasizing their 20% time program, but also by continuing to grow their internal venture group and publicizing their interest in building all sorts of random products. It is worth noting that fostering innovation has a special place in Google’s heart in part because search, worth an estimated 93% of their annual revenues, is a large but rapidly maturing sector with stagnant growth rates (and Google’s market share growth has slowed to a crawl). That is to say, they need to emphasize new markets, start-ups, and technologies because their investors aren’t thrilled with their reliance on the search industry (thus the much scrutinized “Watch This Space” campaign) and are howling for new revenue streams. Cisco: Created the Emerging Markets Technology Group as they began recognizing inherent threats to their business model caused by massive size ($40BN 2010 revenues, 70k employees). This specially-formed group is armed with a mandate to build and fund innovative ideas, wherever they may find them. Interestingly, this group was not only provisioned with hard resources like staff and capital, but was also manned by senior employees that had the influence to ensure that these projects would be seriously considered and integrated by the mothership. AOL: Created AOL Ventures as the company struggled with its brand heritage as the “90′s dial-up company that sent you America Online cd’s in the mail” and a series of damaging business decisions demonstrated an inability of senior leadership to innovate successfully (think Netscape and the Time Warner merger). By creating a small elite venture team to invest company capital in strategic ventures, AOL is working to regain a toe-hold in nascent tech industries and companies, as well as provide a medium to inform larger strategic decisions within the organization (I hope). It seems that the AOL Ventures team is also seeking to foster the company’s new innovation-related brand message among the thought leaders of the tech ecosystem by hosting a number of tech-driven events and meetups. I am pretty skeptical that this is actually motivated by anything other than improving deal flow, but what do I know.