Data for the Future (Updated)

http://5by5.tv/talkshow/66

I’ve been listening to this episode on The Talk Show on 5by5.tv with John Gruber while working on KPIs for my day job and something hit me.

Why smart people make dumb decisions, especially regarding technology and the future.

There is no data for the future. The data that they have doesn’t support decisions for the future either. The data they do have shows how to milk additional revenue or profits from existing sources, but can’t pioneer new sources.

While reading the Auto Blog, I learned that any car that BMW makes needs to make a good business case. There needs to be data showing that a certain product will be successful in order to pursue it. But where is the data for innovation? If there is market data showing a certain product will succeed, it means somebody already did it. Just the fact that you have data means you are already late to the game.

Innovation comes in the lack of data.

Usually, a company will form with a visionary, an inventor, and idealist as the spearhead. They become successful and hire good managers to keep the company well maintained. When the innovator leaves the head position, usually it is filled by one of the managers below. But their entire success is based on maintaining and growing somebody else’s innovation, not on creating new ones. They might have some of the roots if they’ve been there from the start, but managers replace managers and innovation is lost. The organizational structure stifles innovation.

What seems like a better organizational structure is to separate the existing and growing products from the innovators. A team of innovators will pioneer a new product and grow it, hopefully to some degree of success. Some of the team will remain, along with existing managers to help grow the product. The rest of the innovators will create(or acquire) a new team to pioneer new products and then pass them off again. The executive board should have managing experience to grow existing products, but the focus should be on the future, not the past. That requires more innovators on the board, not managers.

Followup: Clay Christensen, How to Pick Managers for Disruptive Growth

One of the most vexing dilemmas that stable corporations face when they seek to rekindle growth by launching new businesses is that their internal schools of experience have offered precious few courses in which managers could have learned how to launch new disruptive businesses.  In many ways, the managers that corporate executives have come to trust the most because they have consistently delivered the needed results in the core businesses cannot be trusted to shepherd the creation of new growth.

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