Most software companies are bad at innovating

A couple of my past employers were organized and managed like a typical software company. They were either marketing or sales oriented. The overall vision of the company, product road maps, etc were set by people who had little to do with building the product. Some folks from engineering were often involved, but it was a very top-down approach: CEO/board identified a new market, buz dev considered buy-vs-build, product marketing wrote PRDs by doing a competitive landscape analysis (basically a spreadsheet with a list of features), PMs or engineering managers/architects wrote functional specs, and finally someone started coding. There is no room for innovation here. That's why markets are so crowded with very similar offerings.

The actual engineer building the product had little control in the overall direction of the company, but had flexibility to decide which technologies to use. Often the technology decision was also influenced by marketing as industry buzz words like ASP, J2EE, AOP, SOA, etc can help sell a product for reasons not yet clear to me. At times, management would throw bodies at the problem to speed up a schedule despite engineers calling it a futile attempt.

For execs, it's scary to give up control. After all, their careers often depend on the success of the venture. It's scary to trust a bunch of engineers to build something amazing. However, it's this actual fear that causes many companies to fail. Wisdom of the Crowds shows many examples where a group can make a better decision than even the smartest person in the group (and that assumes that the execs are the smartest folks in the group). So why do CEOs or VPs often try to force their opinions? Why not foster a more democratic approach where good ideas can come from anyone in the organization and somehow these ideas can get aggregated. Why not give everyone a chance to contribute? Why not empower the people building the product with the necessary freedom to do something amazing? A company's culture facilitates the mechanisms for innovating. And in the world of software, innovation is everything. There are hardly any barriers to entry and little capital is needed.

I'm so happy that my current employer is different.