In the whirlwind of Steve Jobs’ resignation as Apple CEO, it’s easy to forget that it isn’t just superstars who drive breakthrough innovation in an industry like computing. It’s also a shared mindset. By looking at the computing industry’s shared framework for driving innovation and growth, we can learn something that applies in other sectors as well.
It was 1965 (the year before I was born, as it happens) that Intel Corporation co-founder Gordon Moore described a dynamic that has come to be known as Moore’s Law. What Moore could see as early as the mid 60s was that the number of components that could be mounted on a standard chip was doubling every year. Moore’s Law describes how computer hardware would steadily become more efficient (meaning, more powerful at an increasingly lower cost).
Moore predicted that the scaling effect (double the components in the same footprint, year on year) would last for a decade. Come 1975 (which happened to be when Kiln co-founder Indy Neogy was born), Moore adjusted the rate from doubling every year to doubling every two years. Even so, so much innovation was already underway and so much growth already achieved that the yearly expansion has remained remarkable.
A principle becomes prophetic
Andrew J McKeon has just published a cogent account of the motivating force of Moore’s law on the entire industry. He comes at the topic as a business strategist on climate change. His account of Moore’s Law unpacks the Chevron Corporation’s recent campaign commitment: “Oil companies should think more like technology companies.” McKeon does a lovely job explaining why:
“As a clear, credible, and widely accepted metric, it created an expectation that the doubling of computer power every two years would generate huge financial opportunities. Engineers and entrepreneurs organized themselves to realize these gains, attracting large and consistent capital investment, which in turn spurred innovation. As the costs and prices of these successful technologies dropped, this created even higher expectations, driving more investment in innovation, and bringing more cost reductions. Moore’s Law acted as a powerful organizing principle for the semiconductor industry.”
In an interview in 2005, Gordon Moore captured the key point: Moore’s Law had “kind of become a self-fulfilling prophecy”. The industry has organised itself to sustain momentum: from industry-wide standards to start-up cultures, the computing industry has an achieved exponential growth through innovation. “A rule like [Moore's Law],” says McKeon, “can be both an indicator and instigator of breakthrough innovation.”
McKeon is keen for the energy sector to find a comparable organizing principle. He sees the sector relying too much on external factors, from the volatility in oil pricing to public policy, with too little commitment to technological innovation. Barriers to technological innovation are, in part, structural. So many technical fields are involved in energy innovation. Says McKeon, “The companies involved are scattered and diffuse, and their interests often conflict.”
McKeon sketches a 4/7 principle: let’s act as if solar output will double every four years and the output from wind technologies will double from every seven years. Kiln’s Gregg Fraley says: “How about every three years we double the efficiency with which fuel or other resources are used?” With either organizing principle, the next step is the all important question: In what ways might we….?? And from there creative thinking for innovation is unleashed.
The Mindset that Gets You to Breakthrough
If you’re heading to the strategy houses, they’ll supply you with a analysis of your sector that points up all those structural features that act to slow innovation. It’s a great way to box yourself in a corner and feel that there’s nowhere else to go. You’ll end up making incremental improvements and re-engineering your cost base as a way of driving growth. But if you’re interested in breakthrough innovation, begin by asking yourself: what are we thinking that limits the ways we and other players interact? What new principle might we play by? And can we make it contagious…so that others adopt it too?