Vision and Freedom: Two Essentials For Disruptive Innovation

I worked at Yahoo from 2004 through 2009. During my tenure, we ran three major programs, an enterprise-wide innovation program, which generated near-term products and services, a futurist program which crowdsourced both future strategy and future focused patentable ideas, and a targeted IP development program, which focused on developing targeted, potentially patentable ideas, with an eye to expanding the patent portfolio. We were so successful in these endeavors that those last two above led to substantial contributions to a patent portfolio which was recently valued at over $1B.

Early on during my time there, my colleagues and I were discussing the “state of the internet” specifically the biggest players at the time. These consisted of Amazon, eBay, Google, and Yahoo!. For the other three we could very easily determine a clear original vision:

Amazon: the online store which can sell anything at a fixed price
eBay: the site to sell anything, new or used, at auction
Google: the search engine which provides the most relevant results

Then when it came to Yahoo, we looked to its history. Yahoo started out as a hand-curated directory. Of course, it had grown into much more than a hand-curated directory site, but its original vision was “the best of the web”, and since we hadn’t figured out a way to automate that process at that time (although PageRank was a step in the right direction) it was done by humans. But what was our “clearly articulated vision”?

When you looked at the other three major players, they still held to their vision, and their vision helped to drive them forward. Their vision was not secret, they didn’t have a “private vision and a public vision”. It was one single vision, a clearly articulated purpose, which was repeated by the CEO, the senior management, middle management, all employees. It wasn’t a secret to the public or the shareholders. Everyone knew their articulated purpose. Since then, some of the visions have expanded, both Amazon and Google, now Alphabet, have expanded their set of services way beyond their original vision, but their core vision still stands somewhere as part of the organization. Of the four, eBay still remains mostly true to that vision and continues to flourish. As new players appear, like Facebook, Twitter and Snapchat, the closer they stay to that vision, the more they flourish, and the more innovation comes out of their ranks.

At Yahoo, we felt that we didn’t have a truly clear articulated purpose, a foundational statement which everyone knew and helped to drive us forward. We’d heard things like “the internet’s amusement park” (probably in a reference to driving ad revenue through more sticky eyeballs – now there a horrible phrase) and few others, but there was, in our eyes, no clear, specific, articulated vision.

Thus, we did innovate, but in all directions. There was some innovation focused along product lines and some “mashups” of different products, but without that clear vision, where were we going?

If you think about it, a clear, articulated vision, is a bit like the constitution of the United States. Like the US constitution, it lays down a singular vision, a small set of “rules to live by”, and then basically lets you be free to do what you will, within that set of rules. It’s a super high-level articulation of purpose.

When I started, Terry Semel was the CEO, and I left when during Carol Bartz‘s term, and with every successive CEO, we (when I was there) and my friends who are still there, were hoping for that visionary leader to come in and articulate that clear vision, and not just to employees. As I mentioned above, that vision needs to be clear not only to your internal people but your customers and shareholders as well.

When Marissa Mayer joined, we thought, as an ex-Googler, she would be the one to bring in that articulated vision. IMHO, I don’t feel that we’ve seen that from her either, which I don’t totally understand. This is probably one of the reasons they ended up where they are now – no one at the top spelling out that compelling, clear vision of what Yahoo truly is.

What if your company has a clear, articulated vision, like the US constitution, which everyone understands and gets, but you are still not seeing the level of disruptive innovation that you want to see? Then maybe you are simply not walking the talk. Maybe it’s your own internal rules and regulations which are keeping you from developing the disruptive innovation you need.

Just like the US during its first years was nimble and had a minimum number of rules and regulations. Fast forward to today, and the rule books span over 81,000 pages. Like the United States, you may have large numbers of internal rules and regulations in your own version of the Federal Register which contradict the quest to attain the goal so clearly articulated by your founders and leaders.

In conclusion, there are two essentials required to allow your employees to generate disruptive innovation – one a clear articulated vision and two, a minimum of internal rules and regulations governing your employees, some in clear violation of the vision.

Create this environment, then sit back and watch as your employees envision incredible new, interesting, profitable and disruptive ideas within your organization.