Now, mature companies are trying to use the startup model to get employees to work as teams on specific projects, rather than functional departments in charge of internal processes. Netflix pioneered this approach and its former head of talent acquisition, Patty McCord, actively promotes it today. (See the HBR article for more detail). LinkedIn and Facebook use internal hackatons to identify new potential products and teams that can deliver them.
These approaches take into account that the startup-based innovation model created in Silicon Valley differs dramatically from the successful industrial innovation model pioneered by Henry Ford. He invented not only the mass-production logistics and manufacturing system, but also revolutionized labor hiring. Instead of an ethnically-based team of low-skilled workers hired to build a railroad or unload a ship, Ford wanted to see an English-speaking specialist who could fit into his production process. Similar to the quality control process in parts manufacturing, Ford tasked his newly-invented human resources (HR) department with selecting persons that fit a specific job criteria: work skills, education level, family history, ethnicity, etc. Elements of his approach were based on the popular at the time theory of eugenics, which advocated selecting people based on certain inherent traits. (Today, eugenics is broadly associated with racism and bigotry). Ford's HR system proved to be highly successful for the American industry because it allowed companies to plug individuals into well-defined work and social roles. (For example, when hiring engineers GE routinely interviewed wives of the candidates to make sure they possessed proper moral values.)
The current revolution in HR promises to solve the Innovator's Dilemma by giving internal entrepreneurs enough freedom inside the company to create innovations. It also lets companies get rid of employees that don't fit into their culture or have outdated skills. As a result, they get a mobile, active, motivated workforce that can move quickly and carry innovation risks/rewards, rather than offloading it to the parent company. Of course, traditional companies and their HR departments will lag behind in implementing the new model. Most likely, it will continue to spread through new successful startups capable of scaling their initial business into new technology markets.
tags: invention, innovation, control