Here’s an innovation story that follows a very familiar plot line, but the plot is so important that it provides an important reminder.
In an interview with a company’s new CEO, a reporter tells us, the company has … “combined breathtaking engineering to create a whole bunch of amazing prototypes. But they rarely make it to market. That’s because, over the last two decades, its culture has grown so competitive and insular, more consumed with getting and protecting an edge than pushing into riskier new businesses.”
Does this sound familiar? It’s the story of almost every successful business, where the balance between protecting the established core markets, and pioneering new ones, becomes a high stakes poker game played inside the company, with various camps competing for innovation, development, and marketing resources, and the established units almost always win.
The article goes on to say … “People were motivated to produce things they knew their managers would like, rather than take risks on new ideas that might fail. The company’s money-minting core offerings sucked up talent and attention while newer ideas got overlooked.”
But what we all know is that the established units win for a while, until major shifts in the market leave them flat-footed. In fact, this situation is so common, the reporter goes on to note that “It has become accepted wisdom in Silicon Valley that large, successful tech companies can’t reinvent themselves. Many have attempted to engineer comebacks, and the industry is teeming with failed empires that have evolved into middling businesses on the decline.”
Is this a story about HP? Or Blackberry? Or Yahoo? It could be any of those.
Actually, though, this article is about Microsoft. It’s a great piece in the latest Wired, a profile on the new CEO Satya Nadella. The article is quite sympathetic to Nadella’s task, and frames him as a smart and sensitive executive who could well succeed in the monumental task that he is confronted with.
Nadella himself describes three layers of critical organizational performance, Concepts, Capabilities, and Culture, and notes that while Microsoft is awash in great concepts, “You need a culture that is fundamentally not opposed to new concepts and new capabilities.”
While “Not fundamentally opposed” puts the bar pretty low, he has a good point, and it certainly frames the work that he wil need to be doing in the coming weeks and months.
The next article that I’d like to read is about the how. That is, How does Nardella expect to achieve this in the Redmond behemoth? The Wired article unfortunately doesn’t say much about that. But we do. This is squarely in the InnovationLabs competence area, and we’ve written about it extensively, including in the two books mentioned to the right, Agile Innovation and The Innovation Master Plan.
Among the case studies we cover in Agile are Wells Fargo, Nike, and NASA’s Apollo Program, each tackling a different variation on the same situation, and each providing new insights.
At Wells Fargo, it’s about how to take risks in a highly regulated and controlled banking environment that is nevertheless subject to monumental forces of change; Steve Ellis gives us the metaphor of snowboarding to explain how he makes the organziation move faster.
At Nike, it’s about pushing a massive volume of new products out into the market, and then listening carefully to find out where there is resonance, and shifting even the brand identity when the company and the market become out of sync.
And for Apollo, it’s about how thousands of engineers and scientists created something of monumental scale, something that had absolutely never been done before – the moon landings – while balancing innovativeness and control.
Nadella is facing a task that has elements of all of these stories, and we will be fascinated to witness the new chapters as time, history, and the market write them.
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