From the Harvard Business Review, April 2008 (link here).
By exploiting their massive technology infrastructure as well as the desire for software engineers to deliver ideas to the world quickly, Google has built an innovation ecosystem.
The founders and CEO have created a culture of “ubiquity first, revenue later” and “useful first, usability later,” taking financial and time-to-market pressures off of the development teams.
Google’s data-driven methods for evaluating ideas and high risk-tolerance for failure, propels idea velocity and yet allows them to exercise some control.
This article also helps you understand how companies can emulate Google’s innovation success by budgeting innovation into job descriptions and striving to eliminate friction.
Coming back to an Enterprise Performance Management perspective, having a robust management system in place allows you to do things like model the investment in innovation (build/buy) and push the best model into the budgeting & planning process. Imagine forecasting quarterly R&D spend: what if you underspend this month, have you taken your eye off the innovation ball? And will you ramp up next month to make up the difference? EPM is also the foundation for that 'data-driven' method of evaluating ideas, with our without risk weighting.
Given their latest earnings release, Google's innovation machine is well-oiled and making sausage!
Tom Davenport blogs about his article here.
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