Inner innovation, ideas + secured capital + talent. "Bringing Silicon Valley Inside" a company

Silicon Valley is more than a location, Silicon Valley is a way of doing business.

The geographical location we all have heard about, it is in California, full of talented individuals risking whatever they can to build the next star company that will do an IPO, alongside top universities and a road full of investors offices to knock on.

What is indeed: a market for ideas, a market for capital and a market for talent.

A way of doing business: unbound imagination, opportunity-seeking cash, and energetic people. A vibrant market approach in contrast to the bureaucratic big companies. In theory: “if an idea has merit, it will attract both money and talent.”

Resource attraction vs Resource allocation

Silicon Valley spirit is based on resource attraction and not in resource allocation. Let’s define the terms:

• Resource attraction is about creating the up side, unleashing ideas and passion that will transform the core business.
• Resource allocation is best suited for incremental improvements on existing business models, it is about managing the downside of big investments on the core business.

Innovation vs operations efficiency

While innovation is the primary driver of new wealth, employees in large companies often face constant pressure to prioritize operational efficiency.

Operational efficiency is portrayed in the form of reengineering, six sigma, resource planning etc. which translates into getting better at whatever you are already doing. “Efficiency death march”. E.g. A substantial budget innovation would be regarded as a potential waste of money, while a substantial budget for installing a new ERP software would be regarded as a thoughtful move.

This mentioned, creates the misunderstanding conception that incremental improvements are low risk while non incremental improvements are big risk.

In general hierarchies and resource allocation must coexist with vibrant markets and impromptu resource attraction, in other words, changing from stewardship to entrepreneurship. Innovation should focus less on forecasts and financial models and more on evaluating the size of the market opportunity.

Written after the article “Bringing Silicon Valley Inside” by Gary Hamel, read it here: https://hbr.org/1999/09/bringing-silicon-valley-inside