Having worked in the Bay Area for more than 20 years, I have seen many great companies form, grow and vanish. Technology, in its cyclical nature, has been the main driver of these tumultuous waves of the “new” transforming to “also-ran” and eventually “has-been.”
Few companies have survived and thrived through the past two decades. Success-driven complacency is a real and palpable factor in the demise of any good company, yet some other ingredients to a downfall are often overlooked.
The dynamics of company growth impede breakthroughs — we all know that. Yet why?
Simply put, organizational structure theories often overlook the basic human quality of dialogue. We need real dialogue to achieve meaningful, innovative ideas, yet you cannot have a serious dialogue with a crowd of many contributors. As companies grow, the once-intimate conversation of the founder generation is replaced with hierarchical process, authority, egos and fear that negate the once-nuanced deep interaction.
Individual talent matters
Scale is an overused metric. The size of an organization is essential for the execution of an idea, yet a major drawback to creation. And in the Valley, true singular talent is rare. These are typically dynamic individuals that are driven and committed. It is impossible to scale that individual talent at the rate of a normal workforce. In most cases, innovative teams are small — less than 20 individuals. Fast growth can cause truly talented people to become such a depressed minority to the point that they cannot operate effectively.
Technology, economy and culture move fast and the window of opportunity is no longer than 18 to 24 months from initiating an idea to first market introduction. Large companies often cannot execute at such a pace as they struggle to align every project with a grand strategic move.
However, some people would say that the real issue is the lack of big breakthroughs cutting across stagnant market structures. So, how do we overcome that?
A new approach to innovation
Besides deep scientific research, much of the innovation in the Valley is about the optimal balance between technology and economics. But the social and cultural elements must become equally important, both internally (to the creating team) and externally (to the market).
The Valley is full of super-intelligent people. However, it is also full of socially awkward, insular attitudes that are a major distraction and often play negative roles in decision making. Understanding how the emotional qualities, or EQ, of humans work for any new technology is an intuitive quality — a talent in itself — that is exceptionally difficult to test by any research methodology.
Labs should be replaced with studios, and STEM education should be bolstered beyond STEAM (“A” for art) to truly encompass human emotional qualities as these intangibles reflect better the true value of any new idea to its audience — people waiting to get excited about things they never saw, listened to or touched before.
The “dark horse” rule
Thinking up far-out alternatives, or the contrarian idea, is relatively easy for the talented. The difficulty with these “dark horse” ideas is to let them live beyond the moment. If some far-out idea gets under your skin, it most likely has some substance. Now carefully dissect it and understand the merits. We always ask to continue to study the far-out-crazy ones, because once they are refined in application and strategy, many of these become winners.
Finally, throw a curveball. If you have more than a billion dollars in revenue, spend five percent on curveball ideas. These should be confined to a small team, short timeline, and closed profit and loss. Many will fail, some will break even, and few will make it big-time. But in the process of pursuing these, you maintain the team’s dynamism and brand vitality. These are just as important for the main line of business as the next big thing.
Gadi Amit is the founder and principal designer of San Francisco-based NewDealDesign. Working with Silicon Valley’s top technology companies, he has created some iconic products, including Fitbit, Lytro Camera and Google’s new modular and 3-D-printed Ara phone. He is currently working with the best and the brightest tech firms to create new technologies that will come to light in the next 12 to 18 months. Reach him @NewDealDesign.
This article originally appeared on Recode.net.