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Harvard Business Review Bala Iyer and Thomas H.


    IT and Business Architecture Experimentation and Improvisation Analytical Decision Making Other relatively unusual forms of innovation ◦ Google has clearly done something right……  What has it done? .

 The Roots…. scalable IT infrastructure Technology explicitly architected for innovation Well-considered organizational and cultural strategy .. ◦ Vision  Technology and Strategy are inseparable and mutually permeable  Technology should do more than just support the business  Technology should engender strategic opportunity ◦ Mission     Category-killing Search Engine Massive.

       Practice Strategic Patience Exploit an Infrastructure “Built to Build” Rule Your own Ecosystem Exercise Architectural Control Build Innovation into Organizational Design Support Inspiration with Data Create a Culture Built to Build .

Revenues later…... Short-time profitability doesn’t seem to matter ◦ Ubiquity first. Why? ◦ Google monetized consumers’ intentions – search and others ◦ Not so for everybody else.  Strategic Patience itself is NOT ubiquitous.  What makes it work? ◦ Strong monetization of consumers’ intention – cash cows ◦ Clarity of purpose ◦ Attention to detail .

database systems ◦ Highly scalable infrastructure – servers. networks. Foundations ◦ Strong market equity from principal product – search engine ◦ Persistently developing proprietary technology – operating systems. services  What do these yield? ◦ Accelerated product development lifecycle for in-house innovations ◦ Support for third party developments. mashups and other innovations  Where has this led to? ◦ An ecosystem of:  Developers – who use the ecosystem infrastructure to launch their products  Content providers – who need an eco system to reach out to markets  Content consumers – who use search as the starting point for a variety of their own needs .

all else is dependent on you!  How does Google control the ecosystem? ◦ Every transaction is performed through its platforms – Hence:  Claim a large share of the value created  Have access to all the data and processes and events ◦ Result:  Very effective market analyses  Accurate forecasts and predictions  Crowd-sourcing in a controlled manner . Google – the Keystone Component ◦ The component that holds all others in place ◦ So.

   Ability to track the performance of mashups Negotiate relationships from strong competitive positions Hedge the risks faced by third-party developers ◦ ◦ ◦ ◦ Customers get: faster access to innovations Google gets: more ways to increase traffic to its platforms Developer gets: ability to tryout without contractual entanglements As a result: Avoid the appearance of competition.  Vulnerabilities ◦ Keep the traffic going amidst competition ◦ Keep the ecosystem players’ trust .

    Budget innovation into job descriptions Eliminate friction at every turn Allow the market to choose which innovation will work Cultivate a taste for chaos .

 Strong focus on Analytics ◦ Perform randomized experiments on the Internet ◦ Use panels to assess     Customer demand for new products Company and product performance Competitor performance “Just for fun” assessments   Employs an Idea Management System “Democratic” approach to innovation .

almost obsessive work! . Technocratic culture ◦ Individuals prosper by intellect ◦ A consequence: Prediction markets!    Budgeted time for innovation Regular “stimulus” tech-talks Focus on: ◦ People as the most important assets ◦ Learning and continuous improvement ◦ Results:  Knowledge-work environment  Design and occupancy of offices  Approach to interviewing and hiring  In exchange for the privileged treatment: Expects hard.

  Google can control the evolution of its ecosystem No need for market surveys and statistical analyze  Exercise Architectural Control .