This is kind of a man-bites-dog story in that generally we think of the legacy auto companies as being out of touch with technology and innovation while we think of Apple as being a leader in both. It is far more common to talk about how Ford or some other car company should do what Tesla did and use Apple as a model for the future. However, this decade isn’t like last decade and currently Apple is being pounded for not innovating and building an automotive competence seemingly because they appear to actually want to go into the car business.
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Car companies are all over CES talking about doing amazing things from home integration to drones as they begin to out innovate many of the tech companies. I had a lunch with the technology executives at Ford and they shared how they were bringing innovation back into their company and, I think, Apple should listen because it seems to be working.
Why innovation dies in big firms
It comes down to risk avoidance. One of the reasons Apple was able to innovate was because Steve Jobs personally backed and drove the innovation. As CEO he not only could survive failure, he had the power to resource the effort to ensure success. Most firms, tech or otherwise, don’t have CEOs who drive innovation. Failures tend to be career-enders and those who try to innovate and fail are generally crucified and are then put into positions where the odds of having any success are low and the odds of screwing up are extremely high.
As a result, people learn over time not to push innovation and the folks who don’t learn that lesson tend to get managed out of the company. Even worse, the firm then buys other small firms that are innovating, integrates those firms into their process, and kills essentially the innovation over time. This is why mergers generally end catastrophically for the acquired company particularly if it started out being small and relatively innovative.
This is likely what has happened at Apple, without Jobs personally husbanding the innovation, those who were willing to take risks have left the firm and innovation is far harder to drive.
Part of the problem with innovation is that a firm can risk failure for small projects, but can’t afford failure for a large one. Ford does lots of trials and tests to make failure acceptable. The reason you want to make failure acceptable is that innovation by nature is risky. You are changing something and there is a pretty good chance, at least initially, the idea won’t pan out as it was first conceptualized. So to get to a successful effort you may have to fail several times.
People tend to forget that Apple’s first phone (the Rokr) was so bad that Steve Jobs himself moved immediately to kill it, but what he learned formed the foundation (actually this was the second Apple phone, the first one, back in 1983, never made it to market). But contrast this with most firms, if they’d failed with the first phone they likely would have shot all involved and gotten out of the phone business, had Apple done that the iPhone never would have happened.
[ Related: Ford draws on Pivotal to reshape developer culture ]
So Ford promotes small project similar to the Rokr and they promote the activity to the firm raising the status of those willing to take chances and risks and the end result is they are becoming an innovation center again.
Ford’s approach to bringing innovation back
One of the things that really annoys me about large firms, in particular, is how they focus far more on assigning blame than on analyzing the problem to ensure what caused it gets fixed and doesn’t recur. Often the only person in the firm who understands a mistake and won’t remake it is the person that made it in the first place, and it is that person who often is managed out of the company. This is, in my opinion, why you can see the same mistake made over and over again at many firms.
Innovation is like this, because of the focus on blame for failure rather than on moving the ball forward, people are afraid to take chances with innovation and after we shoot the innovators we complain our folks don’t innovate enough. Ford has this exactly right, focus on fixing what is preventing innovation and promote it and you can bring innovation back into the company.
Apple, and a lot of tech companies, should take Ford’s approach to innovation as a best practice.