Wednesday, November 16th, 2011

Q&A: Best-Selling Author Eric Ries on Innovation in Business (Part 2)

By

This is the second post in our series of discussions on innovation with entrepreneur and thought-leader Eric Ries.

What are your thoughts on the pace of innovation in technology today and what programs do you find exciting for boosting innovation in tech overall?

I call it “the rentership of the means of production.” I think that’s the biggest single change that’s rocking the technology industry right now, but in the future I think all industries are going to be facing this trend. If you have an idea for something new, it used to be you had to go get a lot of permission to borrow money, to raise money, to buy factories, to, as Marx used to say, “own the means of production.” But these days you can rent them. That means that for relatively small amounts of money and for relatively small investments of time, you can test ideas to see if they’re any good.

So If you think about Mark Zuckerberg in his dorm inventing Facebook, he didn’t have to ask anybody at all for permission to just do it, find out that it was a good idea, and then subsequently have all of the negotiations you would normally have in setting up a business under the old model. Now, you only have those negotiations when you have traction and progress and data about how good your idea is, so it’s a lot more exciting – it means there can be a lot more innovation happening. It means that we’re democratizing the tools of entrepreneurship so more and more people can become entrepreneurs. I think that’s going to be enormously exciting, although for anyone who’s relaxing into the current pace of innovation, the current pace of business, it’s going to be very stressful because more and more change is going to be coming faster and faster.

What are the top three to five barriers of innovation for an individual or organization?

They all have the root cause of drinking your own Kool-aid or believing your own plans. If you hire a manager to run a division for you or to manage a project for you, and they beat the business plan – they do better than expected, they come in on time and on budget with high quality – we generally think they should be promoted.

But in entrepreneurship, if we’re building something that nobody wants, why would we be proud of having done it on time and on budget? Since learning is really the essential unit of progress for entrepreneurship, anything that gets in the way of learning is lethal to innovation. If you have political considerations or if there’s a bureaucracy where people have to get permission or pitch gatekeepers to get resources instead of being able to test things empirically, that’s lethal. If you have departmental boundaries that keep you locked up in independent functional silos so teams can’t communicate and iterate together, that’s lethal. If you are adamant about listening to your current customers and giving them only what they want, that’s lethal because you can’t learn anything about what potential new customers might want. So we have to really reorganize our companies so they are built to learn from the ground up.

Eric will continue to conversation on innovation later this week at the Box Innovation Network Launch. We will be sharing highlights from his special keynote, so be sure to stay tuned for more details.

By

See all of Alex's articles.

Tags

bin