Corporate culture: how a huge firm like Google tries to foster innovation

Hitting a couple of tough A2 concepts here: the idea of companies having a ‘culture’ and how deliberate steps are often taken to shape that culture: in this case, to try to prevent the breakdown of innovation. This is often a classic ‘diseconomy of scale’ that hampers large organisations.

As a recent Economist article points out, Google is already seen as a creative company. There’s the new Chrome web browser and Fast Flip, which lets users scroll through the contents of an online newspaper in much the same way that they leaf through its pages in print. Expect to hear more soon about something called Google Wave too.

How do Google innovate? The old approach was pretty informal, with ideas just bubbling up through the company from small teams. This gets much harder as businesses get bigger (and Google has nearly 20,000 employees).

To keep the ideas flowing, Google has begun to hold regular meetings at which employees are encouraged to present new ideas and some projects are then given more resources and independence to pursue their ideas. This is designed to help prevent the company getting too stuck in its ways.

This approach isn’t without its problems though. It’s said that inside Google the project has generated both enthusiasm and controversy. The Wave team deliberately distanced itself from Google’s headquarters, choosing to be based in the company’s Sydney office. And it insisted that its work be kept secret for a long time so its new idea was not subject to nit-picking criticism. Some Googlers felt this was a betrayal of the firm’s open culture. “Not everyone inside the company thought that this was super cool,” admitted one of the people leading the project, which was allowed to recruit dozens of software engineers to its ranks.

That has not dented Google’s enthusiasm for creating more such teams. The plan is to allow the number of ideas teams to grow from a dozen or so today to perhaps 50.

But as with all innovators, Google still faces an even bigger challenge: how to turn great ideas into sources of revenue, and ultimately, profit.