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How to stay on top

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Adobe didn’t get to where it is today by playing defence. And, as Brad Howarth discovers, the company knows it must keep innovating to stay on top. It’s a lesson for us all.

Many of the world’s leading technology companies have used guile and determination to expand from a position of market leadership to one of dominance. Think of Intel with microprocessors, Google with online search, or Microsoft with everything it can get its hands on (except, of course, online search).

To misquote Emperor Palpatine from Revenge of the Sith, the only thing that these near-all-powerful companies come to fear is losing their power.

With revenue of US$3.8 billion and just over 7,300 employees, the Silicon Valley-based software developer Adobe Systems is not in the same league as Microsoft, Google or Intel. But in terms of what it does, no one else comes close. Its Acrobat Portable Document Format is about as ubiquitous as can be. So, too, is its Flash multimedia software, which enables websites like YouTube to play animation, video and audio content.

Flash is downloaded through the internet, and automatically updates (albeit with a prompt) when new versions are released. Adobe claims Flash is now installed on 99 percent of the world’s desktop and notebook computers.

It’s an enviable position, but like many dominant players, it makes Adobe a ready target for competitors. Not surprisingly, the strongest challenger of recent times has been Microsoft, which through the release of its own Silverlight software is trying to define its own standard for web-based multimedia.

It’s early days in the battle, and some battles have already been won and lost. Microsoft, for instance, provided the technology to NBC for its online coverage of the Beijing Olympics. But Adobe recently scored points when it reclaimed the right to provide the technology platform for Major League Baseball, which had previously been lost to Microsoft.

Adobe’s success is not entirely dependent on the ubiquity of the Flash player – the company makes significant revenue from multimedia tools such as Photoshop, Premier, DreamWeaver and ColdFusion. But it does make Flash the first choice for multimedia developers, and having won that position, it is loathe to lose it.

So it is something that Adobe defends aggressively through innovation. According to the Senior Vice President and Chief Software Architect of Adobe’s Advanced Technology Labs, Tom Malloy, innovation represents one of Adobe’s four core values.

But while it is common to think about innovation in terms of engineering and technology, he says Adobe prefers to see innovation come from all parts of the company.

“We also like to think about the IT folks and the finance folks innovating as well, and think of ways to support and foster that,” says Malloy.

To that end, Adobe has instituted the role of Idea Mentor, to act as an advocate for people with innovative ideas.

“The way the Mentor performs that role is through a variety of events and other techniques to either train or nurture or facilitate ideas and people by turning their ideas into something real,” says Malloy.

Employees are free to sign up to boot-camps to learn what it takes to be an innovator, and are given the opportunity to present ideas to senior business leaders. There is also an Innovation Leadership Forum where middle-managers are invited to work on new product ideas and projects.

The company is also considering an innovation sabbatical program, where managers are invited join Malloy’s Advanced Technology Lab to pursue the leadership of a new product idea.

That is not to say that Adobe does not also invest heavily in product innovation. But Malloy’s own goal is to go further still. The Advanced Technology Labs’ mission is to deliver innovations to the product team that they would not otherwise do on their own.

“They tend to be the developments that you miss,” says Malloy. “So they can be non-obvious things that take a long time or are particularly hard, or are structurally incompatible with the way we do mainstream product development. We are not constantly on the treadmill, and we can plug the gaps that the product teams might find hard to do themselves.”

It’s this focus on innovation that has seen Adobe claw its way into a leading position, nestled among much bigger players in the technology industry. And according to Malloy, it will take nothing less if Adobe wants to stay there.

Brad Howarth is a journalist and author of ‘Innovation and the Emerging Markets: Where the Next Bulls Will Run’, a study on the challenges facing small Australian technology companies. You can read his blog at lagrangepoint.typepad.com.

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