Can Alphabet Spark Corporate Innovation?

As I was reading Walter Isaacson’s new book, "The Innovators," which chronicles the rise of the digital revolution, something struck me. From Charles Babbage to Sergey Brin, the arc of digital innovation has gone through three very distinct stages.

In the beginning of the digital revolution, some 150 years ago, the innovator was the inventor and the gentleman scientist. They maintained and nurtured academic networks but often worked alone. The primary way they spread ideas was through publishing them in journals. If, as in the case of Charles Babbage and his differential engine, there was prototyping required, they would find a patron and then hire the people required to fabricate the prototype. They did this because they could. In this time, innovation was not a particularly resource-intensive endeavor.

But, as we moved into the 20th century, things changed. For the next six decades, Isaacson’s innovators tended to be found in one of three places: a university, a government-funded lab or a corporate lab. Innovators were generally cogs in much bigger machines. Why? Because the scope of innovation had changed.  It had become much more resource-hungry. You needed the bulk of a Bell Labs in order to turn out a prototypical transistor.

One also gets the sense that many of the innovators Isaacson profiles were barely tolerated within these more corporate environments. Brilliance often comes coupled with abrasiveness as its dance partner. Many of the forebears of the digital revolution seemed to be -- not to put too fine a point on it -- assholes. If you read between the lines, you get the sense that both the innovators and their place of innovation would be immeasurably happier if their paths diverged. But, given the realities of the world at the time, they both needed each other.

Starting in the '60s, a new breed of innovator emerged: the innovative entrepreneur. Almost without exception, they started within a larger organizational context, but soon found a way to break free and build a company around their innovativeness. Gordon Moore, Robert Noyce, Bill Hewlett, David Packard, Bill Gates, Paul Allen, Steve Jobs, Steve Wozniak, Larry Page and Sergey Brin: All took a new path to innovation. Thanks to the introduction of venture capital, innovation could become the road to riches.

This all becomes more than academically interesting in light of Google’s announced corporate re-org, Alphabet.  Essentially, the company is trying to buck the trend of innovative evolution. Page and Brin feel that innovation can still be contained within the boundaries of a corporate structure, as long as that structure is, well, innovative enough.

In theory, their logic looks sound. The biggest complaint I hear from current Googlers is their feeling of insignificance within a massive organization. Breaking the big boat into a bunch of smaller life rafts could solve that problem. If you could somehow provide innovators with enough room to stretch their mental muscles and yet support them with the enormous resources Google/Alphabet has at its disposal, it seems like a no-lose scenario. Essentially, Alphabet should be able to provide a steroid-powered incubator for innovation.

Yet I remain skeptical. I suspect innovation may defy the best-laid corporate logic. You can sketch out an org chart that seems like a stable platform for entrepreneurialism, but I think the entrepreneurs may still squeeze out through the cracks. Even if they’re not egotistical jerks, they are, by their very nature, individualistic. They defy authority. Their dreams are tough to contain. Where you see a supportive incubator, they see a restrictive cage. Corporations tend to excel at incremental innovation, but disruptive innovation comes from individuals who don’t play nice at company picnics. And that’s the type of innovation that Alphabet is betting on.

Alphabet is an interesting development in corporate structures. I hope it works. But I’m not sure you can harness entrepreneurialism, because it -- like information and the human spirit -- yearns to be free.

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