‘How eBay developed a culture of experimentation’, by Adi Ignatius, Harvard Business Review, March 2011

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This article was a disappointment because it didn’t live up to its title billing and, though interesting, was not what you expect to see in the Harvard Business Review; it was more like a traditional CEO interview to be found in any broadsheet newspaper or business magazine. And, whereas I thought eBay’s CEO would have lots of new insights into innovation, the level of new thinking was disappointing.

The early part of the article focuses on the changes taking place in the market place for internet access products, how smart phones and tablets have transformed the way in which consumers are now using eBay. You get the distinct impression from eBay’s CEO John Donahue that the company once controlled the pace of change but is now desperately trying to keep up with technological and user changes outside their control. Apparently there are 119,000 developers working on eBay applications.

It must have been difficult for Donahue to follow such a successful CEO as Meg Whitman and the interview gives the impression that he is still living to some extent under her shadow. He claims that his two major themes have been driving innovation and greater focus on customers, hardly ground breaking ideas and ones which Meg Whitman would no doubt have claimed already. Apparently one of his first actions as CEO was to sell Skype, a decision that does not seem to match his themes; one would have thought that there would be more innovative solutions to its future than disposal.

It is several pages before you come to anything that matches the title heading and this comes in answer to the question – how do you cultivate and sustain risk taking? The answer – which is not new but is nevertheless impressive – is to ‘celebrate failure’ and to adjust quickly when this happens. His view is that ‘you are better off moving and if you don’t get it exactly right, making an adjustment. That’s the only way to compete on the Internet today, because it’s moving so fast.’ Though I understand the sentiment, I wonder how far it applies across all hi-tech businesses. The critical factors must be how much you have to invest, how much can be recovered and how easy it is to switch.

I was also interested in his follow up comment; ‘you’re going to see a tremendous number of innovations and experiments; our job is to drive them and see which ones consumers really respond to’. This may work in eBay but doesn’t seem terribly inspiring. I’ve a feeling that the real innovators and value creators like Steve Jobs will decide what consumers are likely to respond to and create rather than respond to demand.

Click here to read the article in full;

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