The "innovate internally vs. purchase it externally" debate | Synergetic Management

The “innovate internally vs. purchase it externally” debate

This is the first of a two-part look at creative outputs and innovation.

In this first part, we will look at an interesting blog post by Stephen Arnold who challenges his readers with his view that creative leaps by Google are done more via acquisition than by internal “idea / innovation labs”. In fact, it is scaling back its Google Labs. This has profound implications for many readers because of the almost-universal (yet unconscious) tendency to benchmark our creative processes with what we think leading companies are doing and why we think they innovate better than we can.

In the second part, we will look at some conclusions Arnold drew from a study he conducted into how the technological leaders of decades ago actually innovated – how they used the creative process. (Hint: in most cases, they did not use any repeatable, reliable creative process, nor did they have a solid innovation process!)

As always, we will discuss what all the above means for your creative efforts.

(Caveat: Arnold uses innovation in one context to imply creative outputs of breakthrough proportions (as opposed to garden-variety creative outputs that solve everyday problems), and in other contexts to imply the *process* of using a creative process regularly. I have attempted to highlight this by terminological changes when quoting him and changes when I paraphrase his arguments. If there is any discrepancy between his original intent and my interpretation, the fault is purely mine.)

(Note: Arnold has done some serious research into Google, so you might want to think of his opinions as being more than just one more in the sea of blogosphere opinions. Check out his page here.)

Let’s look at the Arnold’s first assertion that Google buys creative breakthroughs vs. creates them in-house.

The crucial distinction Arnold makes is that Google’s product teams do not make fundamental creative breakthroughs, but that they “merely” improve existing innovations buy adding features.  He goes on to assert that Google did make its own breakthroughs before 2007, i.e. before Google “became the internet”. As he writes:

Since that wonderful year (2007), Google has been implementing and buying companies to get innovation (creative breakthroughs). In some cases, Google acquires people who developed a company and then join Google to follow their research path.

Profound implications if true. Let’s look at these implications:

  • First, Arnold does not claim that after purchase, creative output stops. It continues, and in many cases reaches levels it could never have done on its own because of the benefits of being associated with Google’s immense resources.
    (This symbiosis is helpful to both parties. An analogy can be drawn with a cell and its mitochondria – each has its own DNA, so each likely existed independently at some point. Yet, today, your very life depends on the mitochondria in your cells. Eons ago, a cell absorbed a mitochondria and both prospered – the mitochondria provided much needed energy to the cell, and the cell provided plenty of raw materials and protection. Together, they were more than the sum of the parts.)
  • What does change is the “target” of the creative effort. Before acquisition, the target was whatever problem needed resolving in the first place. After acquisition, the target changes to improving the solution! Both are viable candidates for creative process efforts, but they are radically different! This difference must be understood if you are to use the creative process effectively!
  • Google made its own creative breakthroughs before 2007, i.e. before it became an internet powerhouse (and commanded lots of money and expert resources). Therefore, Google must have changed its strategy from creation to acquisition.
  • Many different small outfits are working to create breakthroughs to become the “next big thing”; many then hope to get noticed by Google (or Apple, etc.) and bought-out. Most of these outfits start-out as relative unknowns, with little expert power or money (there are exceptions – YouTube, for example).

All of this leads us to one inescapable conclusion:

  • You do not have to have Google’s resources to create phenomenally successful products or services!

This last point is critical. By any conceivable measure, it is likely that Google is so much bigger and more powerful when compared to your organization as to make comparisons nonsensical. Yet, Arnold’s analysis shows that Google grows fastest and best by importing creative breakthroughs from outside. Can we therefore conclude that the creative process is the great leveler, that it does not require size or resources to help you make that breakthrough discovery?

If so, then the creative process is truly powerful beyond compare. Use it properly, and you have as much chance, and maybe even a better chance, of making that breakthrough discovery than does Google, one of the most innovative firms in existence!

Contact us today for more information on how you can best use the Creative Process to create that amazing breakthrough!

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