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The Lesson For Corporate Innovation From the Malaysian Flight MH370 Crash

Watching bigger companies with huge markets learn and grow with startups is fun and rewarding. For the past 2 years, I’ve worked with 2 startups and an international accelerator at RocketSpace San Francisco where start-ups grow and big companies come for corporate innovation to grow their businesses through interaction with growing companies.  Most big companies think it’s nice to stay abreast of the startup scene but not doing anything is the safest path.  That all changed with  the tragic disappearance of Malaysian MH370 Boeing’s 777 – the stakes of ignoring the current technology trends are devastating.

Tech Tourism

Innovation is the way companies create new more efficient solutions to future opportunities, problems or markets (my definition).  There’s a big problem – many big companies pay lip service to innovation. They think meeting with cool young enterpreneurs in San Francisco will help them do innovative stuff in their businesses. In my experience interfacing with many of these large companies, most of the time it doesn’t work. These efforts are often little more than “tech tourism” that does not align the goals of growing companies and big companies. Now a glaring spotlight is on the air transport industry – my data is backed up everywhere so when I loose my phone or computer I get it back instantly. You can login to “Find my iPhone” and locate a $200 smart phone instantly. How can that NOT be the case with super high tech military and civilian aviation? This is where corporate innovation failed to keep up with the basic and important reality of cloud computing and data storage.

That Was A Great Idea When I Was A Kid

When I was a kid, I was amazed after a plane crash that the “black boxes” would be found then analyzed to give insights to both the cockpit voice communications of the final hour and the plane’s flight data. It seemed amazing. (I was also amazed when I saw my first cell phone and used the web for the first time) Yet with MH370 that amazing technology suddenly seemed old, outdated and inadequate. A buggy whip in the space age. Here are a few questions to ponder.

  1. How could radar not know where the plane went?
  2. How could a Boeing 777 have its transponders go silent then vanish?
  3. Why did the final satellite ping or handshake be mysterious as to the planes location?
  4. How could satellite service provider Inmarsat be clueless to the plane’s location when it communicates in real time?
  5. How can engine maker Rolls Royce not have detailed engine data transmitted back to HQ?
  6. Most importantly, why is all this info not stored in the cloud in real time?

The Cost of Ignoring Market Changes

These questions underline the failures of corporate innovation. The brutal price of ignoring changes in a world where everything has been moving into the cloud has been the fate of over 230 people. How could several companies that literally have their assets “in the clouds” every day not have important data in the (Internet) cloud? Boeing, Rolls Royce, Inmarsat failed to anticipate the changing landscape business, the needs of the airlines (their customers), government safety agencies and ultimately, individual passengers. How can a plane just disappear with all that sophisticated communications equipment that works from 38,000 feet? Think of all the time, money and heartache that would have been saved if we didn’t have to troll half the Indian Ocean hoping to hear a ping. Understanding what really happened depends on an “needle in a haystack” search of the open ocean to detect a faint ping from a “black box” before its battery dies. The price of ignorning innovation is now an awful spotlight that should cost major execs their jobs for not keeping up with technology that’s free to every Dropbox or ICloud user.

Why Aren’t “Black Boxes” In the Cloud?

Specifically, a cloud service for “black boxes” should have been thought up and implemented years ago. Any company like Amazon, Microsoft, EMC, IBM, etc could have operated it. But why didn’t it happen? Because these big companies failed to innovate. But why did they chose to ignore new tech trends as unimportant? Having worked with several Fortune 100 companies, I’ve seen it be much easier to wait and do nothing than charge ahead with something new. There is a cultural disconnect – safety for large company management usually means not taking risks. Innovation, on the other hand, is a considered trade-off of acceptable risk vs. potential rewards. These big companies “played it safe” and now realize they are still in the horse and buggy era without real-time cloud backups of critical aircraft data. This disaster makes the inability to “track my Boeing” starkly clear. The CEO of Boeing should make this a priority and invite companies large and small to help them fix this problem quickly.

Collaboration between established companies and newer, growing start-ups is a key element of innovation. However so few big companies get it right. Hopefully Chief Innovation Officers and Chief Digital Officers now realize the risk of ignoring important market progress. Big companies cannot afford to continue to pay lip service to innovation and the rapidly changing technology world around them. Their key challengs is how to filter through all the startup noise while identifying the major issues to their businesses and coming  up with an action plan. They need people who know both sides of the market to do this for them. (I’ll talk about how to fix that issue in part 2 of this post. Let me know what you think!)

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