This is a discussion I had with some other people during Lean IT Summit 2017. My former colleague Antoine Contal, now working for Google, made a rather impressive talk on how Google works at removing waste to help their employees thrive with digital products and services.
Elaborating on this talk we just came to challenge the actual innovative reputation of Google. We started to identify a gap between, on one hand, the many books and articles in which Google is referenced as an innovative company and, on the other hand, the actual number of world changing products they have launched after in-house development.
Beyond the Fad
Beyond the hysterical fad and the radical-management zealots singing the praises of the Mountain View company, “Google does it like this, google does that, 20% own time project, yada yada yada …” I just thought it might be interesting to have a hard look to the observed outcomes of this innovative process.
The purpose is not to pretend that Google is not an innovative company, they obviously are : many new products and services are offered every year. But are they as successful as you would expect from such a company ? It may be interesting to investigate if it really deserves its reputation as one of the most innovative companies in the world.
How to measure innovation performance ?
In order not to get carried away and to keep sight of reality, a good practice is to measure. So what are the KPIs for innovation performance ? Dr. Makarand “Chips” Chipalkotti answers as follows :
There are many key performance indicators (KPIs) that are talked about for measuring innovation performance. One that is used by many companies is the “Innovation Sales Rate” (ISR). The ISR can be variously defined, but usually is a measure of the percentage of sales that is sales of “new” products. No doubt, this leaves room for a variety of interpretations, but still is a good measure.
Having a closer look to Google most profitable products and services, it occurs that Google AdWords (61%) and Google AdSense (21%) represent a combined contribution of 82% percent of Google income in 2014. AdWords was launched in 2000. AdSense in 2003. Which means that 82% of the revenues from the so-called innovative company come from products that are 17 and 14 years old respectively.
Question 1 : What is the expected performance level of new products in an innovative company of the digital age where everything goes “so fast” and markets are “disrupted overnight” ? Is the figure of 80+% of the revenue from historical products aligned with this vision ?
What profitable technology has Google really developed in-house ?
Sure, the search engine and page rank are awesome technologies and products, it is difficult to argue with that. Gmail remains one of the best way to deal with your mails. But other than this, what other ground breaking technological product have really been developed in-house by Google ? You would expect many but facts are somehow intractable.
Google Maps was initially developed by Sydney based Where 2 Australian start-up. Android was developed by entrepreneur Andy Rubin. Google Analytics comes from a technology of a company called Urchin. All were bought by Google in the mid 00’s.
Google developed Chrome by hiring Firefox experts, buying Skia technology for vector graphics (a technology developed by a small company from North Carolina) and by drawing on Lars Bak expertise on virtual machines, an expertise he acquired while working at Sun Microsystems.
Not to mention Youtube, Google has acquired many of the products that has made them ubiquitous on the digital landscape : DoubleClick, AdMob, Waze, … you name it. It looks to me that their innovative strategy relies far more on the acquisition of external companies than on solid in-house practices and processes of product development.
Question 2 : if Google is such an innovative company, how come most of their innovative products and services come from external acquisition ?
What Google in-house developed product has really taken off ?
Does anyone remember Google Gears ? Google Waves ? I remember the keynote introducing the latter : we all were impressed with the technology but then someone asked : what the use of this feature allowing people I am collaborating with to see what I am currently typing ? How about Google+ ?
Question 3 : How come such an innovative company has so many heavily marketed products disappearing ?
Unless you provide clear and factual answers to these questions, please spare us the relentless references to Google as an example of innovative company.