Why is innovation so difficult in the software industry?
In an interesting take on Google and its innovation, or lack of it, Robert Scoble provides an insight into Google’s manifestation of a very important issue for all organisations: their management of innovation.
Much of his explanation and diagnosis rings true. However, many of the proposed remedies, in his article and in the comments on it, do not.
This is, of course, not an issue which is specific to the software industry. There are many similar issues and examples of both less and more innovative organisations in other industries.
The main issue is not the individuals in the organisation
The main issue is the structure of the organisation itself.
Companies such as W.L.Gore & Associates, Toyota, 3M and Semco have, for many years, demonstrated how to organise for innovation and put innovation at the heart of what they do. This cannot be done with pyramid shaped structures with charismatic leaders who throw their weight around.
These organisations are, in general terms, organised bottom-up rather than top-down, with infrastructure which supports teams which are the appropriate size for their purpose, have the freedom to explore and to make mistakes, and make their decisions collaboratively. See for example: Gore’s lattice management, The Toyota Way, 3M (see their book A Century of Innovation or the article Seven Pillars of Innovation) and Semco’s Out of your Mind!
To advance, software companies of a different structure are required. The current software industry consists largely of a range of organisations from nimble startups to sluggish giants, with simple pyramid shaped structures and product portfolios akin to one-hit-wonders from the music industry. It will need to learn from other industries which are well ahead in their management of innovation.
New organisations with new structures will be required and it is not yet entirely clear how these will emerge. Perhaps not unsurprisingly, given the scale of the change required, the emerging challengers may not be thought of primarily as software companies at all; a current example is Amazon Web Services,which provides cloud computing services on an unprecedented scale.
For many existing software organisations it is probably already too late. For them, and even for other people who seek to emulate them but have not even started up yet, the journey required to change their culture is reminiscent of tricky rural navigation directions: not only it is case of “if I were you, I wouldn’t start from here”, but it may be that “I am not sure that you can even get there from here!”