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Amara’s Law

Roy Amara, former president of the Institute for the Future states that [10] “We tend to overestimate the effect

of technology in the short run and underestimate the effect in long run.”

For example, in the case of iPod, its effect on the production of music has not been fully understood. There are

huge longer-term implications. Similarly, RFID is more than about tags. There are huge implications for how

businesses operate and how society accepts the potential of being tracked. The dot-com bubble burst in 2000

was another example of the result of Amara’s Law. It was then predicted that Internet-based business model was

the next big thing. However, $5 trillion in market value was wiped out [11]. Seven years later, the potential of

Internet-based business model has been realized. Internet start-ups like

Amazon.com, Google, Alibaba.com have successfully acquired real business with many
customers.

The significance of Amara’s Law to organizational culture is that innovators in firms must understand that

innovations, which are not mature for the marketplace at the moment, may have great impact next time and

should not be put down quickly. On the other hand, innovations that succeed today, may present other

opportunities next time. Innovations such as mobile phones have greater impact on people than predicted. It is

better to exploit an innovation incrementally so as to cope with the uncertainty of the market.

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Conclusion

Creativity and innovation are absolutely critical in today’s economy for firms to stay competitive. This paper

discussed the ways in which successful firms build innovation as part of their organizational culture. Some of

the similar key drivers for innovation in Google and 3M include: recruiting the innovative people, giving staffs

room and space to innovate (1- day-per-week-rule in Google and 15 Percent Rule in 3M), creating incentives for

innovation, and progressing in small and patient steps. Firms can learn from the approaches in the cases of

Google and 3M to build in their own DNA for Innovation. However, the ways to innovate and generate ideas

are constantly changing. The best approaches for these firms may not be the best for other firms. It is necessary

to recognize the importance of innovation in the organizational culture, and adapt the success formulas from

innovative companies to suit individual firms.

This paper also briefly highlighted some of the pitfalls which firm should be aware of when they embark in

pursuing the innovative organizational culture. Firm must be willing to make necessary changes to successfully

transform to an innovative culture. Finally, theAm ara’s

Law underlines the importance of assessing the long term impact of innovations. It is
necessary to exploit innovations incrementally to counter market uncertainty.
Centre of Management of Science & Technology
MT5003 Creativity and Innovation
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References
[1]
Organizational Culture, Wikipedia, 2007.
http://en.wikipedia.org/wiki/Organizational_culture
Retrieved on 1 Nov 2007.
[2]
O. Parr-Rud, Business Intelligence Success Factors, Business Intelligence Network,
2007.
http://www.b-eye-network.com/view/4127
Retrieved on 1 Nov 2007.
[3]
The World’s 50 Most Innovative Companies, Business Week Magazine, 2007.
http://bwnt.businessweek.com/interactive_reports/most_innovative/index.asp?chan=innovatio
n_special+report+--+2007+most+innovative+companies_2007+most+innovative+companies
Retrieved on 6 Nov 2007.
[4]
How Google Innovates, Business Week Magazine, 2005.
http://www.businessweek.com/magazine/content/05_40/b3953095.htm
Retrieved on 6 Nov 2007.
[5]
N. Painchaud, Google’s Culture of Innovation, Innoblog, 2005.
http://www.innosight.com/blog/index.php?/archives/36-Googles-Culture-of-Innovation.html
Retrieved on 6 Nov 2007.
[6]
G. Stevens, J. Burley, 3000 Raw Ideas = 1 Commercial Success, Industrial Research
Institute, 1997.
[7]
A Century of Innovation – The 3M Story, 3M Company, 2002.
[8]
J. Collins, J. Porras, Built to Last, Random House Business Books, 7 Sep 2000.

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Common Mistakes in Innovation
Dev Patnaik pointed out five mistakes which companies make when trying to spark
innovation but less willing to make the change in organizational culture to get the results [9]:
1.
Over-reliance on Pilot Initiatives – Some companies initiate projects that

focus on single product idea or promising near-term opportunity. The scale and impact expected is too big to

depend on single approach such as brainstorming. Successful companies such as Procter & Gamble take the

portfolio approach to innovation. The process of innovation is a series of multiple experiments using different

methods and consultants.

2.
Unhealthy fascination with Unique Charismatic Examples – Charismatic
business leaders from successful firms do not always serve as good role model
for other companies.
3.
Misapplication of other Companies’ Approaches – It is enlightening to

learn from successful companies’ approaches but dangerous to blindly emulate. Mechanical application of

inappropriate methods may lead to failure of the innovation program.

4.
Descent into a Cycle of Self-recrimination – Innovation planning teams may

feel that their problems are insurmountable after benchmarking against other companies. Companies can look

into their past success factors to capitalize on their organizations’ strengths and capabilities. This creates

sustainable growth appropriate to their inherent cultures.

5.
Resignation to Superficial Changes – Some companies choose cosmetic
changes over structural improvement. Such initiatives insufficient to change
the organizational culture.
Companies should be wary of such pitfalls when trying quick methods to transform their
organizational culture

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Innovation Drivers
Collins and Porras summarized five innovative drivers from the 3M findings [8]:
1.
“Give it a try, and quick!” – 3M has a process to try out many things and
keeping what really works. The key is to do something and keep on trying
something new.
2.
“Accept that mistakes will be made” – 3M learns and move on from
mistakes. It treats failures as part of the innovative process and does not repeat
the same mistakes again.
3.
“Take small steps.” – Conduct experiments in small scale and develop in full
scale when it seems promising. 3M conducts many inexpensive experiments to
create funnel for would-be innovations.
4.
“Give people room they need.” – Staffs are given time, incentives, job

security and room to experiment. This is illustrated in the “15 Percent Rule” where technical staffs spend up to

15% of their time on projects of their own choosing or initiatives.

5.
“Mechanism – build that ticking clock!” – Practices and tangible
mechanisms for experiment for staffs to try new ideas and innovate

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Creating Innovative Organizational Culture
The 3M Story highlighted some of the features in its organizational culture which foster
innovation [7]:
1.
Recruiting and Retaining Talent – 3M recruits people who are creative and

have broad range of interests. It is thought that people with broad range of interests are willing to learn and

explore new ideas. 3M codified six traits of innovative people in its recruitment brochure: Creativity, Broad

interests, Self motivated, Resourceful, Hard working, Problem solvers.

2.
Creating a Challenging Environment – New business units were spun off.
These newly established divisions had to develop new products and find new markets independently. This

“Renewal” process increased the diversification of 3M.

3.
Knowledge Sharing – 3M encourages staffs to network, interact and share
their knowledge and problem.
4.
Rewarding Innovation – 3M rewards its staff for being innovative. The dual
career ladder paths allow technical staffs to be promoted to the role of vice-
president level without taking administrative or managerial responsibilities.
5.
Mentors, Sponsors and Champions – 3M has a mentor, sponsor and

champion program. Champions have strong credibility and are persuasive “lobbyists” for new ideas and

products. They are willing to take risks and those successfully mentored often later successfully mentor others.