Creative Destruction: Why Microsoft Can't Innovate Part 1

If you’re wondering why Microsoft is no longer bringing us the future like it once did, read the Dick Brass op-ed, “Microsoft’s Creative Destruction,” in the February 4th New York Times.

Brass, a VP at Microsoft from 1997 to 2004, provides a great insider’s view of an innovation environment that continually stymied innovation. He describes the problem relative to Apple.

“As they marvel at Apple’s new iPad tablet computer, the technorati seem to be focusing on where this leaves Amazon’s popular e-book business. But the much more important question is why Microsoft, America’s most famous and prosperous technology company, no longer brings us the future….”

It’s a good question. Why isn’t Microsoft coming out with breakthrough innovations? Brass gives us part of the answer.

Microsoft had a tablet in its pipeline almost a decade ago. But they killed it. “When we were building the tablet PC in 2001, the vice president in charge of Office at the time decided he didn’t like the concept… he refused to modify the popular Office applications to work properly with the tablet.”

Brass explains that the huge profits that flowed from Office and Windows “created a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence.”

Dominic Basulto picked up the New York Times piece in his Endless Innovation blog. He attributed the problem to a cultural shift at Microsoft. As the company grew, it built layer upon layer of middle and upper management. Those layers created barriers for information flow, “so that creative ideas never quite made their way down through the organization.” To illustrate his point, Basulto brought in Suw Charman-Anderson’s tongue-in-cheek take on how middle management stops information flow by creating an impenetrable layer of suck.



Although I can’t deny the appeal of that phrase, I think they have it wrong. Innovation ideas don’t trickle down from the top, they bubble up from the bottom—and even the middle—of the organization. The image of a “rain” of ideas falling on senior management is all wrong.

In an effective innovation organization, senior management establishes a culture where empowered employees can focus on understanding problems in their customer's lives and creating solutions. The role of the top brass is to nurture the creative environment, allow ideas to develop and percolate, and champion the best of the bunch.

Leadership following best innovation practice doesn’t allow fiefdoms to prevail and snuff out potential rising stars that might someday become cash cows. Part of senior leadership’s role within the innovation process is to do the organizational blocking and tackling and protect the ideas, the team, and the opportunity from the broader mature organization.

I’ll talk about how to create that kind of organization next week.

[Image - The Impenetrable Layer of Suck - Strange Attractor]