Google is making some serious money. They absolutely dominate web search, and the end is nowhere in sight. They release new products with lighting speed and are praised as a model of this innovation age. Nevertheless, Google has been criticized for being a one trick pony, and now a Businessweek article points out that despite all the hoopla over their new product releases, search is still their only clear winner. I am probably a fool to write this, but I think Google has adopted a risky strategy, and I predict that if they continue down this path, they will end up purchased by Microsoft (or someone similar) before the end of the decade.
Innovation is the buzzword of day at most companies. More, more, more, faster, faster, faster, new ideas, new directions, that is the key to success. Maybe so, but I think it only works under a lot of constraints. This has been nagging at me for weeks now and I’m going to try to think it out with this post, but in general I think companies misunderstand innovation.
Have you ever heard of swarm theory? It explains the ways groups of individual agents move together. Swarm theory has been used to model the behavior of schools of fish, ant colonies, and flocks of birds. It has even been used to explain intelligence in humans as a product of social interactions. Whenever I read something about swarm theory, it always seems to me to be analogous to the way successful companies move over the long-term. There are lots of debates among strategy gurus about competitive advantage, core competencies, focus, etc. Some will say that a company must have a single minded purpose tying it all together. Some will say in this day and age a company must always be moving and developing new core competencies. I think a company has to let it’s center drift, the way that the center of a swarm does.
My first job out of college was with Harris, a communications company probably best known today for HDTV and other communication systems, best know in the 90s for semiconductors, and originally a manufacturer of printing presses. From what I could tell, Harris never made a huge leap from one thing to another, but instead drifted along a path that covered lots of ground but stayed near their areas of expertise, although the drift allowed those areas to change slowly over time. The innovation at Harris kept the company in motion, but in equilibrium too. That is how swarms behave.
In 1987 Craig Reynolds was able to simulate very realistic flocking behavior in his computer birds by programming them with three rules.
- pull away before you crash into another bird
- try to go about the same speed as your neighbor birds
- try to move toward the center of the flock as you perceive it
Randomness kept the birds from behaving perfectly, yet they still remained in a sort of dynamic equilibrium. That same equilibrium can be found in companies that apply these same sort of rules (all moving the same general direction, but varying slightly).
So what does this have to do with Google? The bird flocking simulation is very similar to the way the strategic direction of a company progresses. The center (core competencies) drifts over time based on who is in the company, where it has been, and some random factors. Google isn’t following the rules laid out by the simulation, and a result their strategic center isn’t drifting, it’s standing still. They don’t realize where the center is, and that is why they will eventually have their vulnerabilities exposed.
Google is launching products in all kinds of directions, and the business press loves them for it and proclaims it the new model of innovation, but all they are really doing is moving in random offshoots around a stable center instead of using innovation from random ideas to dynamically shift that center. The flock isn’t moving together. The flock is working on the core, then going off in meaningless directions. That is why Google can’t take the top spot in anything else.
Google is trying to organize and search different things. I think they would be better off finding new ways to search the same thing.** I’ve taken to using different search engines for different needs. I use Yahoo, Wikipedia, and Del.icio.us at least as much as I use Google. When I think of Google, I think of something that will give me the most popular web pages about a topic, which isn’t usually what I want since I have esoteric interests. Why can’t Google give me different ways to search based on the way I plan to use the information I am looking for? Instead of ranking a page higher because lots of other pages link to it, how about giving me the pages lots of other people like me read, or the pages experts in the field of my search topic read, or pages in a hierarchical format the way I might make an outline? I think Google is too focused on innovating into totally new areas and not focused enough on improving search and presenting the results in better formats. It still sucks. It’s too easy to game the system. Calendars and payment systems and online spreadsheets and all that are just a distraction.
Don’t get me wrong. Companies need innovation and they need speed, but it doesn’t make sense to go randomly running down lots of paths that are unrelated to the core business and are filled with strong competitors. The ADD innovation strategy doesn’t work that well. If Google keeps it up, the company won’t be around long enough to get a driver’s license.
If Google is going to succeed in the long run, their innovative drift should be primarily around search. That is the kind of innovation that moves the center along and helps a company advance as markets and technologies change. And that kind of moving center is what helps companies stay at the top for a long long time.
**Obviously I only have an outsider’s view of the company, slanted by what I have read in the press and my own lackluster experience with Google products. Their internal processes could be totally different from what I perceive them to be.