innovation management report google

8/13/2019 Innovation Management Report Google

1/10

Mirzet Muminovic 061684746

1

Innovation Management ReportGoogle Inc

Innovation is something that has enabled companies and people to develop ideas that have

benefited the world we live in today. It is through innovation that todays society has been

shaped with the technological advancements such as internet, music and communications.

The following report will focus on one aspect of the internet advancement the Google Inc

Company.

1.0 DEVELOPMENT OF GOOGLE:[1]

Google Inc was designed by two Stanford university students Larry Page and Sergey Brin as

part of their final year design project. The two students were part of the Stanford Digital

Library Project (SDLP); and the aim of the project was to design a single integrated digital

library system. The initial idea began in March 1996; where Larry Page considered the

mathematical properties which enabled the World Wide Web to function. The initial system

proposed was called Back Rub and its main aim was to develop an algorithm that would

rank web pages in order of importance rather than the number of times key words

appeared on the web site. This was the turning point in the development of the search

engine itself and is what distinguished Google from the other search engines that were

available at the time; such as Rankdex and Yahoo. The Back Rub system was then

developed further by Page and Brin; and was run from the Stanford server until it consumed

too much band width. It was then operated from Pages home and on September 1997 the

Google Brand was developed. The company developed at an alarming rate and as result the

company offices moved to the Silicon Valley in 1998 and then finally moved to Mountain

View; where it has remained. The company then developed from strength to strength

through investments from other companies having their company registered on the Google

domain. Further revenue was generated through small advertisements being placed on the

site itself. However the main source of revenue for the company is still what they charge

companies for registering on their domain (usually $0.05 per click)[2]

. From here the

company has branched out in to other fields that have kept them at the forefront of the

technological era. Google Inc has developed applications such as Google maps; satellite,

news, shopping, G-mail and video. This is an excellent example of the innovative nature of

Google as it was the first search engine that would allows users to search for particular web


2/10


2

sites; but at the same time keep up to date with current affairs as well as being able to

locate places anywhere in the world and view them through the use of satellite imaging.

1.1Google Time Line:The complete time line for Google Inc can be seen in reference 1; figure 1 shows the major

milestones in the companys development.


3/10


3

(Figure1: Time line of Google Inc)

Page & Brin develop search engine

called Back Rub.

Google.com registered as a domain.

Google rents office in Silicon Valley

garage; working with 8 employees.

Google opens offices in Palo Alto as the

company begins to expand.

Google becomes available in 10

languages

Google image search facility launched. First

search engine allowing users to search

specifically for images.

Google announces partnership with AOL to

increase customer base.

Open offices in Dublin, China and India.

R&D centre opened in Tokyo; due to

Japanese technological advancements.

Google Map is launched after

acquisition of Where2.

Google, Finance and News are

launched.

Google Earth is launched.

Google earth is updated with improved

satellite imagery.

Google becomes available in 41

languages.

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


4/10


4

2.0 DRIVING FORCES OF INNOVATION

Various factors which have enabled Google Inc to become a leading and powerful online

based company in todays global market. Factors such as society needs, cultureand

organisational structure have all contributed to the establishment of this trademark.

Therefore the next part of the report will identify the involvement of these factors in the

companys development.

2.1 Society Needs:

The reason why Google Inc has been so successful is its popularity within todays society.

At the time of its development other search engines were available; however what

made Google so different was the way that it carried out the searches; making it popular

with users and as result more and more companies opted to have their companies listed

on the Google domain. The Google search engine enabled the user to view relevant sites

rather than sites that had the most number of key word present; making access to

information quicker and easier; and also it meant simpler searches could be used. This

was a key factor in its success as at the time as use of the Internet was increasing; as

well the introduction of online services such as shopping; communicating and video

streaming. As a result societys views and demands changed for internet providers; they

wanted quicker and easier ways of using the internet; and wanted information available

to them immediately rather than searching through pages and pages of possible sites.

This is an example of knowledge push and needs pull leading to innovation[3]

. The needs

of the users changed along with their life style and as a result caused Page and Brin to

use their knowledge in the computer science field to develop such a system.

2.2 Culture:

Culture and Society needs have had a very similar effect on the innovation of Google Inc.

The culture today is has moved more towards a technological demand; and as result

online service providers have had to meet the needs. Todays culture is a lot more

dependent on the internet, especially search engines. They are the first port of call when

trying to obtain information online; consequently Google Inc has developed a search

engine that is quick and easy to use, but at the same time offering alternative


5/10


5

applications such as maps, weather and news that todays society is looking for. Fusion

of map, mail and video technology has made the Google search engine so popular and

innovative in producing various applications.

The reason why this has been made possible is not only to do with the culture of todays

society but also the company culture itself. The Google mission statement is Organise

the worlds information to make it universally accessible and useful. The company

prides itself on the fact that is has produced an environment for staff that is both

relaxing but stimulating at the same time; to ensure creativity and innovation is

constantly being exploited. The way this is done is through initially the set up of the

offices. The company has facilities such as offices and computers; but also bikes to travel

to and from meetings; wine tasting sessions and dance classes[4]

. Not only is the

organisational culture innovative but also the employment process; The company seems

to favour ability over experience[4]

, as they believe that someone who has experience

may have developed a particular style of working; where as someone who has no

experience will be able to think in a different way resulting in innovative thinking.

Furthermore the culture within the hierarchy is also different and innovative, as it allows

employees to speak directly and challenge if necessary the owners and other seniormanagement through regular meetings. The effect this has is that it makes the

employees feel that they too can make a difference and allows their voices to be heard,

and as a result they will be more incline to ensure the company is continuing to move

forward in the right direction. The organisational culture encourages innovation not only

through the way the company is operated but also through the environment employees

work. The only way that this has been made possible is, due to the owners Page and Brin

being open minded and innovative themselves resulting in the Google atmosphere.

2.3 Organisational Structure:

The way that Google Inc is structured makes it a very innovative company. The creators

of the site itself have implemented a system where by shareholders who invest have the

ability to say what the company should look into or move into. This is very different to

the way most companies are operated in that they usually operate with a CEO and other

management who report back to the share holders; and then a decision is made. This


6/10


6

method had the potential of a takeover by shareholders; and as a result Brin and Page

implemented the Dual Class Voting Structure[5]

; which meant that they had 10 votes

each where as share holders only had one to prevent events like this from occurring.

This enabled them to maintain control of the company and its future.

Not only is the management structure of the company lead to innovations but also the

companies employees. The staff employed come from a very versatile back ground and

this is the key philosophy at Google; that different minds will perceive a problem and

solution differently. As a result the company has weekly meetings that allow employees

to discuss particular problems they may be facing as well allowing others to put forward

potential solutions. Furthermore the company encourages employees to go off and

investigate solutions to potential problems outside of the projects related to work[6]

on

working hours. This is one of the major contributors as to why Google is so innovative; it

enables a network to be introduced and to develop the innovation. The effect this has is

that it improves the efficiency and learning as well as introducing collective risk taking

and intersection of different knowledge sets as well as ensuring a creative climate[7]

.

This means that several different employees from completely different back grounds can

be looking for a solution to a particular problem; resulting in a broad range of ideasbeing put forward. Not only is innovation encouraged in this aspect; but also Google Inc

allows employees to become share holders in the company itself; meaning they are

directly affected by the financial success of the company[5]

. This drives employees to

improve Google applications further to ensure the company is successful as well as

producing new applications continuously.

3.0 INNOVATION MANAGEMENT STRATEGY

In order for the Google Inc Company to remain successful innovation has to continue.

However it also needs to be managed to ensure that the company is developing products

which are both necessary and useful. A management strategy from another company

cannot be copied as it will not apply to the Google Company; consequently core values need

to be in place to ensure a management strategy can be developed. The core abilities in

managing innovation are[8]

:


7/10


7

3.1 Abilities for Managing Innovation

1. Recognisingfinding technical and economic clues to trigger a change.2. AligningEnsure the change fits in with the business strategy and is not a reaction

to a competitors change.

3. AcquiringRecognise the limitations of the company and obtaining necessaryinformation, knowledge or equipment to make the innovation possible.

4. Generatinghaving ability to produce some of the innovation in-house.5. ChoosingExploring different options available and ensuring the chosen innovation

will fit in with the organisational strategy.

6. ExecutingMonitoring and controlling of the innovation from initial to final stages.7. Implementingmanaging the introduction of the innovation into the organisation

and insure acceptance and effective use of the innovation.

8. LearningEvaluate and reflect on the innovation and identify improvements thatneed to be made.

9. Developing the organisationEmbedding effective routines, cultures and ideas inplace to ensure innovation continues.

3.2 Google Trademark (IPR) & Revenue Generation

The Google management strategy is very different to most companies as the company itself

is not your typical organisation in that it is providing a service rather than manufacturing a

physical product. The management strategy implement by Google began with the

establishment of the Google brand itself. The technology which made the company

innovative had been established by 1997 as Page and Brin recognised what was missing

from the current market; however the next stage was to establish Google in the market. The

logo enabled Page and Brin to brand the company on a global market and also to be

identified from other similar service providers such as Yahoo protecting the Google brand.

(Figure 2: Google Logo.)


8/10


8

The company moved away from using the Google domain as a means for registered

companies to advertise their own brands or logos. The reason for this was that Google aim

was to provide a service for the public rather than use the site as a marketing tool. The

revenue would be generated from the companies registering to the domain rather than theusers who use Google

[2].This was vital to Googles success as it mean that they remained in

control because it prevented companies using the Google domain as a advertising platform

rather than a service; this is a major factor why Google is so popular as pop-ups do not

appear. However its major competitor Yahoo relies on such advertisements to generate

revenue; a major reason why most internet users opt for Google over Yahoo as there is not

the potential of advertisement bombardment; unless the user searches for a particular

company; then when the company site is entered the company can advertise as much as

they would like. This has an effect on revenue generated for example in 2009 the revenue

was $ 5.51 billion[9]

; whereas Yahoos revenue was $1.6 billion[10]

. The reason behind this is

thought to be due to the economic crisis, the majority of companies that advertise on Yahoo

opted out and resulting in a decline in revenue; however Google revenue increased as it

wasnt reliant on this source of revenue. This is something that makes the Google Company

innovative not only in the service it provides but also in the method it generates revenue.

3.3 Google Innovations

Once the Google trademark was established and the company developed as did the market

they were providing to. This meant that innovations that would follow needed to be within

the business strategy of the company. The first major innovation to the Google search

engine was the availability in different languages; this was something that had not been

available from one service provider at the time; and as a result the innovation was

welcomed.

3.3.1 Timing of innovations:

The key to Googlesinnovation management is the timing of the new applications, for

example the introduction of Google in various different languages; initially available in only

10 languages. The reason behind this was that the languages it was available in English,

Spanish, and German etc these were countries that the internet usage was at its highest in

2000 because they were the most developed at the time. This meant that more and more


9/10


9

people could access the Google search engine and therefore its popularity and exposure

would increase, and as a result more companies would register resulting in more revenue. In

2000 the maximum number of searches on Google was 100 million per day, as oppose to

1998 10,000 per day, the number has vastly increased to 2 billion searches per day

[11]

.Further applications such as maps, video and shopping were also introduced at specific

times to ensure successful integration.

3.3.2 Acquisition of Companies, Employees and Technologies:

Another example of their management strategy is the introduction of the Google map

facility in 2005. The main reason why it was launched at this stage is due to the lack of

technology available. The initial concept was conceived by Lars and Jens Rasmussen who

owned the company Where2. Page and Brin along with Googles vice president Vinton G.

Cerf who is responsible in identifying new technologies; acquired the company in 2004[13]

;

and with the help of the Google team developed Google maps[12]

. This is a very effective

innovation strategy by Google Inc as it enables them to brand new technology as their own

through acquisition of smaller companies who have the potential for great ideas. It is

through this strategy that Google has been able to stay ahead of competitors with new

applications constantly being developed. Acquisition of smaller companies by larger more

powerful companies is common; however the difference with Google is that it targets

companies that can integrate well into the Google culture and strategy rather than

companies that will just generate large amounts of revenue but or aimed at a completely

different market.

Google as a whole is an innovation champion rather than just one person; it is thanks to the

culture, organisation and the employees that keep Google innovative and moving a positive

direction. If we look at the senior management they have employed they use a variety of

different people from engineers to marketing experts to sales executives[12]

. It is through

the diverse employment strategy that they are also able to continue innovation but at the

same time manage the innovations as it allows experts in various different fields to identify

potential flaws in ideas or improvements that can be made. So not only is Google acquiring

technology and equipment it needs but also employees that aid in the innovative nature of

Google.


10/10


10

4.0 THE FUTURE OF GOOGLE

Google Inc is moving towards other applications mainly to improve communicationbetween users; and this may be in the form of VOIP system through Google domain or MSN

format. Furthermore Google is looking into the music market; and the increased popularity

of internet downloads; however there is the potential for legal problems if not developed

properly, like in the case of Napster. This is done through acquisition of companies such as

Audio scribbler and World 66[13]

. In order for Google to continue its growth it must maintain

its innovative nature to keep ahead of its competitors such as Yahoo and Microsofts Bing.

Other applications that are being explored are further improvements to the Google

satellites; as well as traffic mapping providers for an online form of satellite navigation.

5.0 CONCLUSION

Innovation is something which is vital in the market that Google is involved in. To continue

successfully it must remain at the forefront of the Google Company business model to

ensure success; this will be achieved if the company continues with the current strategy of

encouraging innovation through the office environment, staff employment and acquisition

of necessary companies, technology and staff.

innovation management report google

Documents