Everyone understands that the bigger a company gets, the more difficult it is to create and nurture ideas. There are a number of reasons. The sheer size of the organisation mitigates against change – it is incredibly difficult to get everyone to understand a game-changing idea and align themselves behind it. You get a fragmented approach and the whole thing can get mired down in bureaucracy and finger-pointing.
Large organisations are inherently conservative, with people not wanting to rock the boat, while there is fierce rivalry between different divisions/departments which can lead to ideas being squashed if they seem to tread on someone else’s turf. There’s also a fine line between a strong company culture and having too inward looking a focus. Even successful companies such as Facebook have been accused of a lack of perspective – because they solely use (and love) their own products they assume they everyone else believes they are equally awesome. Step outside the organisation and your obsession is just a minor part of the lives of your customers.
The good news is that the majority of organisations do understand the need for a stream of fresh ideas. After all, the world today is dominated by companies such as Google, Facebook and Amazon that either didn’t exist twenty years ago, or were considerably smaller. Competition in every market is increasing and no-one wants to go the way of Nokia or Woolworths.
So how do you align your company to create the best forum to create ongoing ideas? I’m no management consultant, but I’ve seen a few attempts over the last twenty years and it boils down to three broad types:
1 Innovation silos
In many industries (such as pharmaceuticals), where innovation relies on expensive capital equipment it makes sense to create separate, concentrated, research labs. These have the intellectual muscle and resources but can suffer from their sheer size and distance from the business. They can then hit the same problems as any other big organisation, with divisional rivalry and static corporate culture. Alternatively businesses have focused innovation in standalone business units – either skunkworks operations that are locked away from the rest of the organisation, incubators that support promising ideas at arms length or even smaller companies that have been bought and are run as ideas factories. All of these can work, provided management stay true to their word not to meddle or demand fast results, but there’s still no connection with the wider business and its needs.
2 The campus
You break up your monolithic organisation into a campus style environment, with different divisions occupying their own buildings, but close together. Splitting into smaller teams is good for creativity, and you get the economies of scale of having everyone on a single, but large, site. However the ability to cross-pollenate between groups can be limited – unless you happen to bump into someone over lunch you might be completely in the dark about what other sections of the company are working on.
3 The college
What I think is really interesting about the campus model is that it deliberately mimics the university campus structure. While this makes for a good working environment, it doesn’t help spread ideas. So I think companies need to look at a more collegiate model, similar to that of universities like Cambridge. You have two allegiances/bases – your division (essentially your college) and your actual project (your faculty). So you get the chance to mix with people from other divisions and collaborate on joint projects. Some people may find it disorienting, but if projects are scheduled to last 2-3 years the goal is never that far away.
Innovation is vital in every industry, and the size and structure depends on the sector and the market each company operates in. But I think it is time for more organisations to look at the college structure if they want to nurture and develop a stream of ideas that take their business forward over the long term.
This week’s takeover of Nokia’s handset division by Microsoft is easy to see as a marriage of desperation, or as Robert Peston put it, “two drunks supporting each other at the end of the party.”
Wind the clock back 10 years and the picture was very different. Nokia was dominant in the phone market and Microsoft held a similar position in the desktop/laptop market. The first Windows-powered smartphones were being released, but they were incredibly complex (I know, I had an Orange SPV), essentially transferring the desktop Windows experience to the mobile world. There were a whole raft of other mobile handset providers that have since disappeared or lost their independence – Motorola (now owned by Google), Ericsson, and Siemens.
Two things changed all this – Apple came along and made smartphones easy to use without losing their power and in a linked move, the world embraced mobile with the growth of 3G and wifi. As the existing market titans, with enormous user bases, Microsoft and Nokia couldn’t evolve fast enough to change their business models. The same process happened in previous waves of computing as the world moved from mainframes to mini computers and then PCs; few CEOs have the guts to bin their existing cash cow and launch a radically different business.
So could either of them have done things differently? I’ve talked before about Microsoft’s disastrous attempt to innovate with Windows 8 but you can argue that it didn’t invest enough in mobile early on. If it had combined ease of use and access to compelling content with the power of the SPV (which was heavily subsidised) and made it less ugly it could have had a chance of pre-empting Apple’s rise. But it never seemed to be a priority. And Nokia again seemed to view smartphones as a niche market until very late in the day, focusing on the Communicator which was a high end business tool rather than a consumer-friendly device.
All this means the combined unit has a tough job on its hands and is going to have to focus heavily on innovation and marketing to succeed. Ironically given Apple’s perceived lack of innovation and BlackBerry’s woes there is chance to seize the challenger position and become the quirky, cool alternative to Samsung and the iPhone. This does mean being brave and creating something radical that shakes up the market. Microsoft couldn’t do it with Windows 8 – so can an injection of Finnish thinking make the difference?
I had the chance this week to see an old copy of BT’s Technology Journal, published at the time of the millennium. To give you an idea of how long ago the year 2000 actually was, the cover trumpeted an interactive version of the journal on CD-ROM that delivered a multimedia experience.
What was most interesting were a series of technology timelines, across areas as diverse as health, home and entertainment that predicted what the world would be like in 2020 and beyond. By now (2013) we should all be watching 3D without glasses, using robots in the kitchen and the police will be equipped with phasers (as seen in Star Trek). Looking forward by 2015 we’ll be able to pleasure ourselves with the Orgasmatron (though I’m sure that was in a 1960s Woody Allen film).
It is really easy to laugh at predictions made 13 years ago, particularly as they spectacularly failed to imagine things such as tablet computing and Facebook which have changed our lives and disrupted industries. I remember Tomorrow’s World back in the 1970s happily demonstrating the jet packs we’d be using to get around by the turn of the millennium. I’m still waiting for mine to arrive.
The reasons that futurologists get it spectacularly wrong are two-fold. Firstly, progress is not linear. Moore’s Law may apply to computers, but not to everything. Creating artificial organs does not mean that we’ll have artificial brains ten years later. Research simply doesn’t work like that and is much more stop start. Even now, eureka moments can move things forward rapidly or development can hit a dead end.
The second, and most important factor, is about user acceptance – and this is where startups and innovators need to pay most attention. Just because technology can do something doesn’t mean that people will want to pay money for it. I’ve talked at length about how startups need to cross the chasm and create products that the mass market wants, rather than just early adopters. This is where a lot of the innovations predicted by BT (and plenty of others) fail. There simply isn’t a compelling reason for people to either change their behaviour and/or fork out significant amounts of money to take a risk on a new innovation. Understanding consumer behaviour and designing products to meet their needs is vital if new innovations are going to make it out of the lab and into the mainstream. Yes, we can create 3D TVs that don’t need glasses, but the cost is currently prohibitive. We could probably even build jet packs, but the legal framework isn’t there to control their usage.
So the lesson is clear – innovation, blue sky research and predicting the future is all very well, but think about the problem that you are trying to solve. Is there actually one? Do people care enough to change their behaviour? Will they pay money for it? Otherwise you’ll be left with a warehouse full of rusting robots as consumers spend their cash elsewhere. Though I do think the Orgasmatron probably has a decent chance of success…………
On the face of it, David Cameron’s announcement of a £1m prize for solving a ‘grand innovation challenge’ is good news for UK science and industry. The competition will look at the biggest issue of our time (as selected by the public) and then be judged by an illustrious panel, chaired by Lord Rees, the English Astronomer Royal. The Prime Minister likened the competition to the 1714 Longitude Prize which was created to solve the problem of navigation at sea, and which spurred unknown Yorkshire clockmaker John Harrison to develop much more accurate marine timepieces.
All well and good – anything that stimulates debate on pressing problems for mankind and supports scientists and engineers is obviously welcome. Even Cameron’s idea of a ‘Britain’s got talent’-style show to identify the key issue that scientists have to solve is an attempt to put engineering and research back into the mainstream.
But there’s three main problems I can see – and unfortunately they run through a lot of the coalition’s thinking on science, engineering, technology and entrepreneurship.
Firstly, £1m is a pitifully small amount of money for an idea that will solve ‘the biggest problem of our time’. The annual Breakthrough Prize in Life Sciences (bankrolled by Mark Zuckerberg, Google co-founder Sergey Brin and tech investor Yuri Milner) has distributed $33m to 11 winners. And that’s just in one year. The new Longitude Prize is being funded by the Technology Strategy Board (TSB) and it appears (from what I’ve read) that the £1m is not new money, but is from the TSB’s existing budget. Hardly an expansion of government investment in science and engineering.
Secondly, like all politicians Cameron is driven by short timescales. Solving the problems the world faces can’t be accomplished in a single term in office. Research simply does not move that fast. If the Prime Minister checked his historical facts (perhaps he needs to speak to Michael Gove), this has always been the case. The original Longitude competition began in 1714 but Harrison’s clock was not successfully operational until the 1760s. And even then he was judged not to have won the official prize itself (though he was awarded multiple grants during his lifetime to recognise his achievements).
Thirdly, modern research is a global undertaking. Scientists work with their peers across the world, collaborating to solve problems across disciplines and countries. Look at the Human Genome Project – while the Wellcome Sanger Institute in Cambridge made an enormous contribution to sequence human DNA, it was a truly global effort, involving scientists from across the world. So if Cameron expects his prize to be won by a 100% British entry, he’s likely to be proved mistaken.
I really hope that the new Longitude Prize takes off and increases interest in science, engineering and technology. But, like investment in championing Tech City, it smacks of a short term, PR-led approach by the Prime Minister – aiming for headlines, not the lasting breakthroughs that take decades to unlock.
We’re continually being told that innovation is critical to our future as a nation – indeed, last week’s Budget included plenty of talk about encouraging research and development, technology and bright ideas.
Getting kids interested in science is vital to this – and after all it shouldn’t be too difficult, given their love of things that explode, make a mess or beep loudly (or all three). However at the moment not enough children see the link between studying science and doing cool stuff – just look at the stereotypes of white coated, glasses-wearing, techie nerds if you don’t believe me.
So as the parent of destructive but inquisitive boys I had high hopes of the Cambridge Science Festival, the annual two week series of 180+ events put on by the University of Cambridge to show everyone (not just children) that science is vital, fun and something they can get involved in. We went along to just some of the festival last Saturday and I can’t help thinking that it was an opportunity not quite delivered on. I’m not sure if they were expecting fewer people but both the Centre for Mathematical Sciences (a building I never knew existed) and the Institute for Manufacturing were crammed to the rafters and beyond with eager children and their parents. That had a knock-on effect on having to wait to do activities (and the laser bunny hop had broken, boo), leading to grumpy kids and increasingly stressed parents.
Amongst the bodies it was great to see a Raspberry Pi in the flesh, but for me the standout activities were all organised by the Cambridge Science Centre. Set up to establish a public interactive centre for science aimed at locals, tourists and schools it is currently raising funds to eventually create a permanent base in the city. It’s a great initiative and from the range of activities they put on and their sheer enthusiasm they demonstrated that they really understand their target market and know how to connect with them. My kids (aged from 3 to 8) had to be dragged away from the air cannon that showed how seeds are carried by the wind (parents, think of it as a supercharged Elefun game), while inside the Institute for Manufacturing they had a whole range of gripping hands on activities. Take a look at http://www.cambridgesciencecentre.org/ to find out more – this is exactly the type of innovation that the government is talking about and a project that really deserves to succeed.
There’s a continual complaint that the UK simply doesn’t produce the numbers of heavyweight tech companies that the US spawns. And looking around, the pattern seems to be true – for every ARM, Sage or CSR in the UK, you could name a dozen similar size companies in the US.
While some of this is gap is obviously down to relative population sizes are there any other factors holding back UK entrepreneurs? This was one of the issues discussed at last week’s Enterprise Tuesday event in Cambridge by an entertaining group of speakers, including company founders and Cambridge Angels, Sherry Coutu, Andy Richards, Robert Sansom and David Gill, managing director of the St John’s Innovation Centre.
The key factor is the ability to scale – the UK creates exactly the same number of startups, per capita, as the US – but only half of them successfully scale up compared to their US rivals. There are plenty of reasons for this – from an inbuilt British fear of change to an inability to cross the chasm
and appeal to the mass market. It seems that for too many UK companies the choice between scaling themselves or selling out is weighted towards the exit option. While this releases investment capital back into the system and gives entrepreneurs the chance to begin again, it has created (in the words of a US VC quoted by Andy Richards) an industrial veal farm in Cambridge, with prized startups nurtured and pampered ready for the inevitable early death/exit.
The UK in general, and Cambridge in particular, has shown that it can grow dominant tech companies, so now is the time for the government and tech ecosystem to encourage entrepreneurs to take a step back, aim higher than an early exit and build businesses that can scale. Given the UK has the ideas we need to move from farming veal calves to growing some bulls……….
I had the privilege of being involved with helping to organise last weekend’s Cambridge Startup Weekend. Essentially a Startup Weekend brings together people with ideas and skills to create a new application in just 54 hours. People first pitch ideas and teams then form to work on the most popular ones. The idea is that some of these teams and applications then go onto become real, viable businesses.
Sound exhausting? It was. But what amazed me was the energy and enthusiasm amongst the 90+ delegates. Everyone was incredibly committed to the projects they worked on, despite the fact that they had only just met their team mates or come across the ideas. People were happy to work non-stop through Friday and Saturday night to achieve some pretty incredible things, learn loads and make lasting friendships.
This all made me think – just imagine if you could replicate this energy and teamwork within larger organisations. Innovation would skyrocket, as would morale as everyone worked towards the same goal, rather than in individual silos. Rather than going away on team building retreats/jollies, I believe innovation weekends are something every company should look at – or risk people with ideas just walking out the door.
- Cambridge Startup Weekend unearths new generation of talent (cambridge.startupweekend.org)
- Cambridge Startup Weekend set to find next generation of tech success stories (cambridge.startupweekend.org)