Balance Trust and Control for Innovation

The storyline almost writes itself. Blinded by infighting and bureaucracy, both Microsoft and Nokia squandered great opportunities to innovate. In turn, they are then overtaken by more nimble competitors, particularly Apple.

While there’s truth to that simplified storyline, the lessons to be learned are less obvious. Let’s tease it all out a bit.

Microsoft: Innovation Killed by Competitive Culture?

In an editorial earlier this year (February 2010), former Microsoft VP Dick Brass ran down the list. He identified three significant technological innovations at which Microsoft had a good shot, only to be leapfrogged by Apple: tablet computers, ebooks, and smartphones.

There was no doubt in Brass’ mind about the villain: Microsoft’s powerful competitive culture. Caught between competing principalities in the kingdom, forward progress was slowed. The kingdom of MSFT was therefore bogged down itself.

Possible Hypotheses:

a.    Better to collaborate than compete?

b.    Better to have top-down direction than laissez-faire innovation?

Nokia: Innovation Killed by Bureaucratic Conservatism?

Kevin O’Brien, in an International Herald Tribune front page story on September 27, 2010, writes that Nokia showed business customers a prototype touch-screen, internet-ready phone three years before Apple’s 2007 iPhone introduction. However, because it was expensive to produce, a risk-averse management team killed it.

O’Brien cites several variations on the theme: Nokia was historically a hardware-driven, not a software-driven, firm. Its previous success made it more risk-averse. The committee-structure employed by Nokia moves decisions to lowest-common denominator design and a tendency to defer decisions.

Possible Hypotheses:

a.    Re-organize to separate mature and evolving businesses?

b.    Develop an incubator operation to nurture small-sized innovations?

These are only a few hypotheses, of course. Another way to phrase the problem might be: When do you go open-source, and when do you dictatorially shut down debate?

Greater minds than mine have been over this issue. Sometimes it gets phrased in terms of innovation; other times, it surfaces as a debate about centralization vs. decentralization. 

It also shows up as a trust issue: when do you trust, as in collaboration–working closely and openly with others. And when do you trust, as in delegation–being willing to let go, to subordinate your wishes to a greater good.

Seen this way, the right answer is probably a blend. Business innovation rarely comes from brilliant minds sitting in isolation; it grows when people are willing to openly engage with each other, rather than to identify their mission as self-aggrandizing. (Ross Smith has written about this, as has Robert Porter Lynch.) Successful innovation depends on successful collaboration at the personal and organizational level.

But a successful organization can’t live on innovation alone: great insights have to be commercialized, produced, marketed, sold, and controlled. These tasks require different skills. (Malcolm Gladwell draws an interesting parallel when he dismisses the idea that Twitter can be a tool for political revolution; looking at the civil rights movement, he suggests its power came from personal connections, not distant ones).

Ideally, then, a successful organization would manifest two kinds of ability to trust their internal teammates.

1.    the ability to trust peers—to offer up insights, and to hear criticism without shut-down and resentment; to be open to ideas from others; to be free of NIH syndrome, and to embrace others’ ideas as your own;

2.    the ability to trust superiors (or designees), to defer to a majority, to sacrifice one’s own good for a greater good; to accept another as speaking for oneself; to delegate without clawing back; to grant others control over ourselves.

These trust dimensions are not any easier than the dimensions of centralize-decentralize. It’s tempting to look at Apple and glean lessons there; after all, they are cast in the role of successful challenger in both the Nokia and the Microsoft stories.

But technology is a distinct business; and while Steve Jobs’ reputation as a controlling manager is clear, it’s not clear (to me) whether Apple’s at what time in the process a decision is made and the ‘trust me’ approach takes over from the ‘we trust each other’ approach.

My guess is—as in most organizational design issues—the ‘right’ answer consists of a carefully crafted statement of ‘it depends,’ pointing out clearly the what, how and when of ‘depends.’