I really owe Nicholas Carr a vote of thanks; I believe no other single individual has provoked so many ongoing entries of the form “A is right about X” or “A is wrong about X”. Today, Nick is wrong about innovation. To be fair, this is something that has driven management practitioners and theorists crazy forever; the people running a company tend to know pretty well where some innovation would be useful; adding product value to give some price leverage; revamping manufacturing operations to tie up less capital; it depends on the company’s pain point. And that kind of works, but only for the little innovations. Maybe the best-known example is Kaizen, as applied in the Toyota Production System; which explicitly acknowledges that it’s chasing small, incremental, steps forward. But fortunes are made, and industry titans are built, where management isn’t really looking, almost always. The big pieces of innovation come out of garages and low-rent offices in lousy locations, and they’re produced by small groups without much management backing. It can be done at big companies (the business personal computer at IBM, Java at Sun) but then it’s always in an off-the-mainstream skunkworks. Nobody—I repeat, nobody—is smart enough to predict where the next big strategic innovation is going to come from. So if you “narrow your innovation focus”, you’re almost guaranteed to miss it. The best approach, I think, is a combination of conscious focused incremental innovation—kaizen—combined with a structure that’s loose enough that when someone wants to hide in a corner and try something crazy, you don’t get in the way too much.


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September 12, 2006
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