Innovation isn’t easy
An article in Re|code entitled “The Google X moonshot factory is struggling to get products out the door” highlights the serious problems Alphabet X, the incubator for the company’s shoot for the moon projects, but which has the theoretical potential to change the course of humanity.
Google X was set up as a way of centralizing the many initiatives arising from the company’s policy of decentralized innovation, in turn the result of something as ambitious, radical and expensive as allowing employees to devote 20% of their time to developing their own projects. It costs a lot of money to be able to spend a fifth of the wage bill on paying people to do their own thing, although many employees say that to really work on something serious requires using up something closer to 120% of their time.
In the context of a company enjoying strong growth but where everything seems to hinge on the performance of the core business, the restructuring that marked the arrival of Alphabet seemed an ambitious move, a way to fight isomorphism by creating isolated business lines that stand out as viable, giving them the independence that would allow them to become independent companies, aided by the parent, but with their own entity. The idea of Alphabet, as the name suggests, was to access projects in their alpha stage on which the company betted. Within the model, Google X was the chocolate factory, the place where those ideas could take form, an absolutely critical factor within the system.
According to this philosophy of diversification, turning Google into a holding company only made sense if it offered shareholders something better than diversifying their portfolios on their own, which it hoped to achieve by offering these diversification projects a more fertile environment than the market offered. If that fails, the very essence of the project fails with it. If the projects are delayed, if bureaucracy remains a problem, if key managers leave, if those who want to launch ambitious projects are forced to leave the company to set them up, it is clear that something has failed within the process. It would seem that attaining a reputation as an innovator is done not by working for Google, but after leaving the company.
At some point along the way, the company that designed an ambitious selection process to attract the best talent and put it to work in dream offices seems to fail, and instead of responding to the dreams of founders who want to change the world, the company becomes a place in which those who want to put ideas to work need to leave to do so.
This is particularly contradictory: the company tried to provide an enabling environment for innovation, but has found that those who want to innovate prefer to do it out in the big bad world rather than try in the environment the company tried to create.
That, and not harassment from the antitrust authorities of the European Union, is the biggest problem the company faces today: Alphabet is great at shaping ambitious projects, fantastic in bringing together the best brains in the world, sounds great when it announces something … but that’s as far as it goes, and if any of these projects become reality, it’s despite the environment carefully created for it.
Continual innovation is a challenge for any company. It is not a question of structures, reputation, talent, money or leadership … rather than getting them all spinning at once. Innovation is a long and complex, very difficult cycle to industrialize. Very few companies are successful, and far fewer achieve something approaching what we might consider long-term success. And the difficulties of Alphabet X are a good proof of this.
(En español, aquí)
