The Myth of Macroinnovation

An idea is making the rounds and appearing in articles like this New York Times piece, and it goes roughly thus: the age of the small inventor is over because to work on stuff that matters requires the largescale coordination of people and materiel that only governments and large corporations can provide. This notion that we’re entering a Golden Age of Macroinnovation is bunkum, I’m happy to report.

Scale matters, scale has always mattered, but scaling is not innovating. It’s true that there are many opportunities for businesses and governments to do big things. That’s always true—all my friends who worked at Yahoo! and Microsoft said one of the attractions was the ability to write code that would be used by hundreds of millions of people. However, the article basically says, “large institutions are tackling large problems.” That’s wonderful news, much better than large institutions ignoring large problems, but has nothing to do with innovation.

Perhaps I’m wrong, perhaps scaling is a form of innovation. Innovation is characterised by disruption and the unknown. Think of those governments and large corporations and ask yourself: are these the birthplaces of radical thinking, new ways of getting things done, and risk-taking leaps into the unknown? Of course not. Governments are the most risk-averse institutions in the world, more so than medicine where lives hang in the balance—doctors at least listen to evidence, whereas the definition of bureaucracy is “we follow the rules regardless of reality”. Governments exist to preserve the status quo that elected them, not disrupt it.

Don’t go hoping for a change in government’s risk aversion any time soon. Every penny is spent knowing that to fail means to be vilified for “squandering public money”. Doing something new risks failure. Like a puppy that has been harshly house-broken, Government associates failure with pain and so responds with fear, hostility, and concealment. With that mindset you can never learn from failure, and so unless you luckily get it right first time you’ll find your Government road to delivering something new to be harsh, difficult, and largely untrodden.

Do you think things are different now? Consider Obama’s billions on health record rollout. KP have a model EHR system, “KP HealthConnect”. It cost $4B and took five years to buy and roll it out. This is KP’s second go at it: in 2002 they wrote off $770M they’d spent with IBM trying to build their own EHR system. Do you think that the Obama Administration will get a second chance if his first attempt at EHRs loses $770M?

Big businesses aren’t much different: a large company is a small Government that has more flexibility on HR. The profit focus of a business is a help and a hindrance as Innovator’s Dilemma so clearly showed. The NY Times piece quotes Clayton Christensen saying, “The good news is that, once they recognize the benefits of disruptive thinking, the big companies have all the resources necessary to induce change.”

My experience with large companies and governments shows me that it is not a simple or trivial matter to recognize the benefits or marshal the resources. A common failure mode is where the leadership say they want disruption and innovation, the grass roots want it, but the middle management tiers aren’t incentivised to deliver it because their bonuses are tied to metrics on existing product lines. Disruption eats into existing businesses. “Maximizing Shareholder Value” is a wonderful focusing device but, without an explicit timeframe for that value, innovation risks shareholder lawsuits for sabotaging profitability.

In his comment on the NY Times piece, Michal Migurski observed, “New New Deal is at heart a massive, all-fronts realignment—where’s the role for the small and the nimble in this universe?”. It is premature to declare Mission Accomplished for reinvention of Government (see the Government 1.5 meme). At its heart, this is an attempt to get Government to use the Web 2.0 tools we built in the last decade … tools that were largely the product of one or two people. I don’t see bureaucrats using decade-old tools as an “innovation” that the small and nimble have to worry about.

I love that governments, NGOs, businesses, and citizens are going to be tackling large and meaningful problems with the aid of the tools and techniques developed by researchers, entrepreneurs, and hackers around the world. But to mistake using those techniques for inventing them is to ignore that great lesson of Margaret Mead: “Never doubt that a small group of thoughtful committed people can change the world; indeed, it is the only thing that ever has.”

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