Even as a massive conglomerate, Google manages to innovate with the kind of dexterity and creativity that most young startups would love to have. From driverless cars and solar-powered contact lenses to pills that search your body for disease, the company has taken on projects that are both ambitious and game-changing--and that, if successful, could impact humanity for the better. 

So how does Google manage this? Harvard Business Review took a dive into the principles the company uses as its backbone. And while the way Google executes them might not be possible for every company, the ideas behind them certainly are.

1. Invest in research

Google spends billions of dollars each year on research and development, funding more than 250 research projects annually. The company invites scholars to spend sabbaticals at its headquarters, luring them with the opportunity to delve into its huge swaths of data. Google also invests in young companies with its GV (formerly Google Ventures) arm--as it did with companies like Nest, Slack, Walker and Company, and 23andMe--and uses a methodical five-day Design Sprint process to help those companies develop or refine products. And its 30 Weeks program helps new designers develop their product ideas and bring them to fruition. Noticing a trend here? Google puts a huge emphasis on learning from outsiders.

2. Push everyone to innovate, from top to bottom

Google's famous "20 percent rule" encourages employees to dedicate 20 percent of their time to projects that interest them. Though it's been debated recently whether it's still in practice--Yahoo CEO and former Google VP Marissa Mayer has said it's more like a "120 percent rule"--the policy did directly lead to the creation of Google News, Gmail, and AdSense. And it's indicative of the overarching, innovation-friendly philosophy at Google: As long as something has a chance to eventually benefit the company, go ahead and give it a shot.

3. Break your team into self-sufficient "startups"

Small teams can work on moonshot projects at Google X, the secretive R&D facility down the road from the company's main campus. The incubator was founded in 2010 with a self-driving car project; since then, projects have included Wing--a drone delivery service similar to the one planned by Amazon--and the ambitious Loon project to beam the Internet to the entire world via router-equipped hot air balloons. Having a lean team that operates away from the day-to-day bustle of the main offices helps keep operations smooth and efficient. Out of sight doesn't mean out of mind, though: Those working at Google X report to Google co-founder Sergey Brin.

4. Encourage collaboration

Wherever Google's projects take place, the company aims to maintain a tight feedback loop that promotes quick decision-making. Instead of using an assembly line approach, Google has its researchers, engineers, and product managers work together throughout projects--and decide what might be worth looking into further for future ones. Feedback and new ideas are meant to flow freely between teams, so scientists talk directly to those who gather customer input and vice versa. All this helps create a culture where innovation flourishes because it's baked into day-to-day processes. 

Published on: Jun 3, 2016