By: Leonard Fuld, Chairman, Fuld + COMPANY 


Last week I read a techie blog about Google that blew my mind.   The article stated that “Each year, Google changes its search algorithm 500-600 times.” What company have you ever heard of that updates its core product nearly twice each day? 
I guess I’m a fact geek.  I enjoy trivia.  I am also in the competitive intelligence business.  That is why I want to take this discussion out of the factoid stage and move it to a much larger conversation, a conversation about understanding your competition.    To truly appreciate Google’s competitive edge is to know far more than learning about new product features.  The intelligence about Google comes from knowing how it competes.
Don’t confuse the word innovation with real innovation
It seems that nearly every one of the thousands of companies my firm has analyzed over the past four decades claims it innovates.  I’m not sure that’s exactly the case.   The CEO of Avon Products, one of the worst performing S&P stocks in 2015, inserts the word innovation three times in her shareholder letter alone.   Amazon, one of the top 10 performing stocks for that same period, does not use the word innovation at all in its report (except in listing the name of one of its subsidiaries, A-9 Innovations).  Amazon’s executives constantly experiment and encourage product and service changes.  They live innovation rather than talk about it.
So does Google.
What are Google’s three lessons?
Lesson #1:  Make lots of Beta bets…and take them from anywhere
Beta is in Google’s blood.  Its management would rather send numerous experiments out into the world and have the market tell it what works (GoogleMaps, Gmail) and what does not (Google Glass, Google Reader). 
Outside developers certainly help Google in this area.  Just take a look at Google’s own developer’s page (https://developers.google.com/products/ ).  It lists hundreds of developer product categories.    
We can all experiment and even fail, according to Google.   Permission to fail is critical to achieving the next big thing in your business.
Lesson #2:  Let Big Daddy Data decide
A former Google employee interviewed by the New York Times commented about how Google makes decisions: “Never take the status quo.  And fact-based decision-making — always rely on data. Never make an emotional decision.”
Sergey Brin and Larry Page, Google’s founders, emerged out of the Stanford University crucible knowing and appreciating the power of data.   I’m sure there are many backroom arguments between Brin and Page or between the executive office and Google developers.  Egos get involved.  At the end of the day, though, it’s data that casts the final vote.  
Lesson #3:  Change or die
Incremental change is okay but not a good enough for the long term.
Google’s hard-charging change-or-die attitude is part of the company fabric.  Larry Page told Wired magazine in 2013 that employees must focus on 10x, that is improving or building something that is ten times better than anything else in the market.  That’s his 10x strategy. Perhaps this kind of thinking explains why Google changes its search algorithm nearly twice each day.
 Google’s lessons are easy to understand but tough to execute.  That’s how it achieves its competitive advantage.  Pay attention to these intelligence lessons if you want to succeed in your market. Update your products or services more often than you currently do; likely as not, these changes are critical to maintain your competitive edge.  Experiment and give your staff permission to do so, even if – and especially – they fail.   Finally, focus on data and how these data inform your strategy and new initiatives going forward.   Certainly argue about the data but don’t bury the data under your arguments.

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