In the corporate world you learn quickly that if small companies want to collaborate, it tends to happen, while efforts to collaborate with large companies may involve many meetings and involve many people with no guarantee anything will come of it. Small companies innovate as they need to; big companies are often risk averse.
Google’s announcement that it is to reorganise under a new parent company, Alphabet, is a step towards overcoming this sort of bureaucracy and maintaining the fiercely innovative and daring streak that has until now been its trademark.
Large companies have more freedom to ignore their end users, preferring secrecy from fear of having their ideas stolen, and instead focus on large stakeholders. This means that they often create products that are too wide in scope and which fail to address specific needs.
For smaller businesses, innovations are part of the way they engage with customers. Rapid prototypes are released, and assessed to see what works and what doesn’t. These prototypes are then scaled up and made relevant to a wider range of potential customers. Despite its enormous size and wealth, this is also the approach that Google favours.
Too often large companies don’t trust their engineers to make sensible judgements on business decisions. This probably shouldn’t be the case, as often the most successful technology companies are run by those who worked up through a technical role. Companies such as Hewlett Packard, Apple and Google made their names through being technically excellent, rather than a narrow focus on business objectives.
Google’s move effectively splits one monolithic company into several smaller companies wholly owned by Alphabet, of which Google is the largest. In this way, Google (or should we say, Alphabet) hopes to keep each of its areas of focus small, fast, and innovative.
Risk averse
After all, Google is not just a search engine any more. It has expanded in many directions, from mobile phone design and operating systems, to smart home control kits, automotous cars, geomapping, and off-the-wall projects. It is comfortable trying things out and dedicating the resources to ideas with potential.
This risk-taking is a key part of Google’s innovation infrastructure, giving independence of thought to staff and technical leaders without over-burdening them with business issues. In fact, it’s similar to a traditional academic research model, where academics with good ideas get the resources that allow them to drive them forward. Done well, the university becomes a leader in the field, just as Google has become a technology giant.
Small works in software
Google wants to attract the best staff into research labs, and achieves this by creating a small-company infrastructure where engineers are not burdened by bureaucracy. However, unlike smaller businesses, Google has the deep pockets to support its staff. A rising star can be given responsibilities without the need to progress through a formal hierarchy.
After all, the structure of large companies may limit their ability to produce useful software – take for example the many major government IT contract disasters, such as the £10 billion spent on an NHS IT system that ultimately never worked.
What would a small company have done differently? It would have invested time in searching for the best solution, created and tested prototypes, and used those as a basis for the final product. The large companies involved in the NHS contract had off-the-shelf solutions, which they pushed without questioning their suitability. Too much money was spent on design and requirements analysis, and it was years before the product reached the clinical staff, by which point it was a computer programmer’s dream but a nightmare for the intended user.
Reputations built on people
Leading universities generally have individuals to thank for their success – for examples cryptography at Royal Holloway, led by Professor Fred Piper, and the University of Edinburgh’s Informatics Group that thrived under the guidance of Professor Sidney Michaelson.
So big companies need to act like small ones and provide opportunities for innovation and risk-taking to thrive, where individuals who do not want to conform to strict rules and procedures can take on their vision of the future. After all, Apple was a garage company once, and Microsoft had to borrow someone else’s operating system (known as 86-DOS and purchased from Tim Paterson of Seattle Computer Products) to get a foot on the ladder.
Google’s enormous impact is mostly down to the creativity of individuals, its image still one of a bunch of software developers who just love to write code – not easy for a company whose products increasingly find places in almost every web user’s life. Let’s hope that the creation of Alphabet protects the small-company ethos that has made Google great.