==A special guest post from Randal C. Moss, the co-author of my new book on Innovation: “IGNITE :Setting your Organizations Culture on Fire with Innovation” ==
Why Jigsaw Matters
The in-house think tank of Alphabet (Google) is being spun off into its own entity now known as Jigsaw. The spin off matters. Their work matters. The fact that there is even an independent innovation driving mechanism within an innovative company matters most of all. Here is why:
The Jigsaw Spinoff Matters
In spinning off Jigsaw, Alphabet is codifying what was probably already true – Jigsaw operated under a different set of rules and in a different way to arrive at unique ends. The formal spin off is important from cultural and balance sheet points of view. While I do not have x-ray vision, I assume the way Google counted the Google Ideas investments on their balance sheets impacted their financial outlook in one way or another. With Jigsaw spun off, they can more accurately demonstrate profitability of each of their operating entities to investors. Whether or not Jigsaw is destined to be an enterprise expense (R&D) or operate in a silo is yet to be seen, but the structure could help analysts better understand Alphabet’s value.
Culturally the separation is monumental. The distance could amplify the overtly entrepreneurial nature of Google Ideas. It could also allow Alphabet to raise Jigsaw up as a lighthouse for the rest of the organization to look towards. I’m confident this was the case with Ideas and expect that cultural artifact to continue.
Jigsaw’s Work Matters
While Eric Schmidt points out some exceptionally benevolent projects such as DDoS Protection, Proxy services, and Phishing Protection I the bigger play is to create an even faster paced incubator and project lab for products that go beyond the first Billion users. They are generating REAL MEANINGFUL VALUE, but how will they monetize it? They are publicly traded entities and investors demand returns. “Billions of people are coming online for the first time. Many will rely on the internet not only for access to information, but also for frees expression” says Eric Schmidt. Read: Billions of new users that, if we can deliver a great safe and open internet experience too, could become loyal to our brand. This is a much different approach than the ‘Colonialism’ tack that Facebook is making in its bid to bring connectivity to the next billion.
The Fact That Jigsaw Exists Matters
The fact that we are talking about an innovation laboratory within an innovation based company matters. It tells everyone that even the best of the best still need to build and maintain an innovation lab that drives the enterprise ever forward. There are no laurels to rest on when the wolves are forever nipping at heels. Google, and now Alphabet, recognized the value of maintaining a component of their start-up DNA somewhere within the core of the organization even as it matured. Protecting it and nurturing it so that it stayed lean, scrappy, and ambitious.
This idea of the internal incubator is the crux of their success. Their commitment to innovation as a strategy – not as a CEO pet project, is what drove growth and profitability. Their spin-off of Jigsaw is a monumental statement about their commitment to innovation and the impact it will have on their long term success.