Rise and Fall of Innovation at Yahoo!

Rise and Fall of Innovation at Yahoo!Can people really innovate when they have to tend to all of their day-to-day responsibilities?

Unfortunately, people don’t get promoted for being innovative, they get promoted for getting stuff done, developing people, and meeting or exceeding goals or stretch targets. If people are busy making sure they do all that, when are they supposed to innovate? And if they do come up with a good idea while they are in the shower (after all they don’t have time to do it at work), how many hours of sleep are they willing to give up to help move it forward?

This is one of the key problems established organizations have in making innovation happen in their organizations. First, people get rewarded for executing not creating. Second, everyone is so overworked that getting funding and staffing up a project team to make the business more profitable or to ensure its longevity, is incredibly difficult.

So, what’s the answer?

I came across an article in 2007 that showed that Yahoo! believed the key was a set of dedicated off-site resources charged with taking employee ideas and suggestions and developing them. In the article they cite a product development example in which the product was developed in a third of the time it would have taken within the normal Yahoo! reality. 65% faster than an internal project. What does that say?

What this article reinforces is that people must have time to execute new ideas. Top levels of management have to commit to ring-fence a portion of people’s time to develop new product or process ideas that will improve the efficiency and profitability of the enterprise OR they have to commit the resources to a group external to the normal operations of the company. 3M has its 15% time and Google has its 20% time (if your 20% time project is approved), but Intuit’s group-focused, aggregated percent time seems the most sustainable because it allows managers to schedule and plan for innovation time away like they do vacation.

Bringing in outsiders is a third alternative, but not that different from number two with the exception of a little more of an outside perspective that comes from working with multiple clients and living outside the political culture.

So, which approach are you prepared to commit to? Or, are you committed to driving the best ideas and people out of your company and seeing your competitors blow by you?

P.S. Yahoo! Brickhouse opened in 2006 and closed in 2008.

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Braden KelleyBraden Kelley is a Social Business Architect and the author of Stoking Your Innovation Bonfire from John Wiley & Sons. Braden is also a popular innovation speaker and trainer, and advises companies on embedding innovation across the organization and how to attract and engage customers, partners, and employees.

Braden Kelley

Braden Kelley is a Design Thinking, Innovation and Transformation Consultant, a popular innovation speaker and workshop leader, and helps companies use Human-Centered Change™ to beat the 70% change failure rate. He is the author of Charting Change from Palgrave Macmillan and Stoking Your Innovation Bonfire from John Wiley & Sons. Braden has been advising companies since 1996, while living and working in England, Germany, and the United States. Braden earned his MBA from top-rated London Business School. Follow him on Twitter and Linkedin.




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No Comments

  1. Bob Jacobson on March 6, 2012 at 3:09 pm

    Great article, on the money. Yahoo! has ceased to believe in itself or what it has to offer. It’s become a melange, a mess rather than a message. What’s its point?

    The only problem with the article, Braden, is that it comes a decade too late. As soon as Google and blogs appeared, Yahoo’s original purpose, to find great things to read on the web, had little exclusive value. One solution would have been to sell the original property to a more foolish buyer, or simply liquidate it and do something meaningful with the assets.

    However, the notion of shutting down and reorienting never seems to enter too many executives’ heads. Hired to do something, they do it and do it and do it until it can no longer be done. Then they write some empty self-compliment on their resumes and move on. Their failure should follow them everywhere, because it’s not they who suffer most, but rather the shareholders, business partners, and workers. A quick and satisfying close, one that paid off everyone for their dedication, would liberate a lot of talent and equip it to innovate onward. Instead, executives wait until the firm’s dying moments to cut everyone loose. Yahoo’s doing it now.

  2. Raj Madhuram on January 10, 2013 at 7:46 pm

    You have good points about needing dedicated time to take the idea and turn it to reality. However, I must point out that innovation is alive and well at Yahoo! (Disclaimer: I work for Yahoo! and the views and opinions are entirely mine and does not represent my employer)

    I don’t know about the article you have referenced about Brickhouse, but I think definitely it is misrepresented. From what I know, we did not use
    “outsiders” to develop anything. People within Yahoo! who had great product ideas were encouraged to participate in this program for 3-6 months. Yahoo! Pipes (https://pipes.yahoo.com/pipes/) is one of the products that came out of it.

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