These days, innovation is more than just a means to grow a business -- it often determines whether a new business can survive at all. And when it comes to the most recent technology revolution, Google (NYSE:GOOG) has blazed the path. Inc.com recently caught up with Matthew Glotzbach, product management director for Google Enterprise, the search giant's business solutions unit, to get his thoughts on how small companies can use innovation as a springboard for fast growth.
It's been said that there's no penalty for failing at Google. How can small businesses afford to follow a similar philosophy?
The Internet space is kind of a class example of, as a small business, you can throw together a prototype of an application, pop it online, and attract customers and users instantly. From the outside looking in, you may look like a legitimate huge operation and in reality you're two guys in a garage at Stanford building Google.
The trick for a small business is not to take the big-bang approach. Don't go and study the problem for 10 years and then build the killer product. That's to say, don't dump it all in, put everything behind it, have it launch only to find out that you missed the market or it wasn't what the market wanted. It's the theme of, do it quickly, test it out.
Small businesses have an amazing advantage in that they're really good at listening to customers. And customers are really good at giving small businesses feedback. For whatever reason, users and customers aren't as inclined to give big business feedback. Maybe because you assume it's a big corporate black hole. The small businesses and their customers are willing to engage in the conversation and the businesses can learn so much from the customers.
So it's a combination of rapid iteration, of getting things out there and testing it, and listening to the feedback. This is the way that small businesses can quickly evolve and fail, learn from failures, but those failures don't have to be catastrophic game-ending type failures. They can be evolutionary, iterant and make-your-product-and-services-better type of experiences.
Google requires that its engineers spend 20 percent of their workweek working on unassigned projects that interest them. How effective can this be in other industries?
It probably takes different flavors for different types of industries and types of workers. Obviously it works really well in the software, engineering type of world, where in a 20-percent model you can really make some breakthrough innovations. But take it to manufacturing industry -- the last place you would think of. Maybe it's an hour every week instead of eight. But what if you gave factory workers the ability to, and time to go, think about what's happening and the conduit to give that feedback back to the management team. If they could communicate and say, "Hey, here's a process that really isn't working" and have it be OK. And not only was it OK, but it was encouraged.
And here I think small businesses have an advantage, because the idea of 20-percent time is almost implicit in small business. Because people are constantly working on a little bit of everything. Because that's the nature of small business. This is my job from title perspective, but this is the list I do to grow the company. This is one of the innate things that happens in the small business setting that drives those businesses to move faster.
So innovation is an imperative for growth?
Obviously this is true when you talk to five-person companies. But it seems to be going up the scale. Five-hundred-person companies are starting to get a little more of that feel. You talk to somebody that is a salesperson, and also does heck of a lot of marketing and gives product feedback. When you find that, that's when you find companies that are thriving and growing, versus when you have silo offices with thick walls that are bound by what you are and aren't allowed to do.
How can the small-business world lead the way in innovation?
Again, small businesses have not only the imperative, but also the advantage to do so. They're not stocked in any kind of legacy way. They can afford to innovate in a lot of different models. Small businesses are often about customer service. As businesses grow from small businesses to medium businesses -- which is a lot of times the goal of small businesses -- they can drive customer-service innovation. The classic example is when you have a two-person company, you're in really high touch with customers, and when they start to grow, how do they maintain that high touch of customers, but really do that on scale.
Small businesses are also driving a lot of product innovation, especially in the tech sector. Studies that are done show small businesses are often times leading the way -- which is really counterintuitive. You think of big-product tech innovation, and it seems like you have to have hundreds of millions of dollars in R&D to be able to drive that. In reality, I have a friend who has a product company -- he and his business partner built up a physical goods product line and, soup to nuts, it took them three months. They have products that are manufactured and distributed now. It's an impressive operation that you would have even 10 years ago never thought possible.