Microsoft and Creative Destruction

A recent NYT article by former Microsoft VP Dick Brass has caused quite the stir, but for the wrong reasons. Every follow up article I’ve read, including one from Microsoft, gets much of it wrong some key things wrong.

The premise: The core point of the Brass article is how the introduction of middle management and bureaucracy has killed innovation at Microsoft.

My counterargument: Microsoft has always been a conservative, platforms company. Visionary design and creative leaders think in terms of great products, which Microsoft has never been good at. Brass assumes the challenges that hampered Tablet PC were new and local, but they have always been there. Microsoft’s best, and most creative, work has come when a competitor forced one of the few Renaissance-VPs (VPs who were not over-promoted engineers but actually had a diversity of management skills) to take product design seriously.

My credentials: I worked at MSFT 1994 to 2003. I was on the IE 1.0 to IE 5.0 team among others (Windows, MSN, and MSTE/Best Practices, where I worked with many groups across the company). I wrote a bestselling book about Innovation and I’ve spoken and consulted with various groups at the company dozens of times since I left in 2003.

My take:

  1. The primary problem at Microsoft regarding good design & innovation is the diffusion of creative authority. The problem is not the numbers of people at the company, or the layers of management, as many gripe about. Layers don’t help, but it’s not the problem. The real issue is the inability to grant creative authority to the few people worthy of it. Microsoft has always been a place that gives way too many people a say in matters of design, vision and user experience, and it shows in the pervasive mediocrity of the majority of its products. Films need directors. Orchestras need conductors. But if you divide things into 30 pieces and ask 30 people to play creative visionary, mediocrity ensues. The better products at Microsoft are the ones where VPs modify the distribution of authority to create clear creative authority.
  2. Few VPs are qualified to be creative leaders, at Microsoft or elsewhere. And there is no creative lead role at Microsoft. There never has been. This is not new, it has always been true (at least since 1994 when I started). This is why when brilliant, genius type software designers come to the company, they are baffled by how little creative power they can earn, so they retreat to research or future thinking groups that have no skin in the game (e.g. Bill Buxton, Steve Capps, Ray Ozzie, Jim Gray (RIP), etc.). Microsoft is simply a hard place for to accumulate wide authority over design, which is required to make coherent visions, user experiences and innovations come true. Worse, it’s rare for leaders to acknowledge death by too many cooks since those who have never worked elsewhere, and have no conception of creative process, can’t imagine any other way. The culture has always been a heavily consensus/collaboration driven place for managers, which waters down ideas, and shifts what goes out the door heavily towards conservation.
  3. Management at Microsoft is fat with inbred managers who are not worthy of their title, but this has always been true. If you are hired to manage version 5 of something, you inherit a host of decisions made with skills you do not have, yet get credit for anyway. If the team you inherit does good work, and you happen to be the manager, you receive credit, regardless of how little you did. Entire unprofitable, failed divisions, funded by the rest of the company, promote people out of corporate obligation, creating the existence of middle managers who have never actually successfully managed anything in the marketplace. For the 90s, this was MSN and Consumer products, which were perennial failures. The quality pool of people who managed in those divisions was below average and as the company aged more of these groups were born. Microsoft, like all companies, has suffered from the Peter principle, or worse, perhaps the Paul Principle (people who are lousy at even simple management skills but inherit mediocre projects they don’t understand, and simply manage not to get fired via their team’s noble but unheralded efforts, which hide their shortcomings). As a result, there are line level managers at Microsoft who are more competent than some middle or senior managers. But this has always been true, given the diversity of the company. It’s worse now because of the size.
  4. Real layoffs would be a blessing. In 1999 when I left the Internet Explorer team (before the ill-fated IE 6.0 release), I looked around the company for other teams to work on. I couldn’t believe how many lost, misguided, sad, self-destructive teams I saw. This was in 1999! The company has more than tripled in size since then. Mini-Microsoft is so clearly on the mark about his core ambitions. I don’t wish unemployment on anyone, but I’d say a) the ratio of managers to programmers is insanely out of whack b) The number of projects and divisions that have never made profit and are market laggards is obscene. If the company were split apart, few groups are competent enough to survive a year. This defeats the “strategic value” these properties supposedly have, as dumping of buckets of money earned by Office and Windows profits into their bonfires of incompetence does not a strategy make. You need basic leadership competence, which all too many groups at Microsoft don’t have (and many never did).
  5. Microsoft’s best and most inventive work has often been driven by competition. A visible and serious threat is the only situation where leadership, historically, was forced to be creatively aggressive, giving a chance for creatives to obtain enough power to do good work. Windows 95, Office 95, Internet Explorer 5.0, MS Natural Keyboard, XBOX 360 were all excellent products by most standards, and were made possible by strong competition. The question executives need to ask is why divisions like Mobile & MSN,or the entire Vietnam like 15 year history of imploding efforts of web search (there is a great book to be written by someone about this), have been disasters despite clear and strong competition – this is the analysis to post on every office door at the rest of the company. If you want Office or Windows to change more, wait for more successful threats to these profit streams.
  6. It’s lazy arguing to assume an organization of 10,000 or 100,000 is uniform in any way. Groups at Microsoft have a different culture, and some have been wildly more successful than others (e.g. Office vs. MSN/Live/whatever it’s called this week) in part because their leaders have developed superior cultures that diverge widely from other groups. Windows 7 is an excellent product no matter how it stands in comparison to Apple’s work, and the turnaround from Windows Vista, which many heralded as the end of MSFT, was beyond noteworthy. If Windows 7 or XBOX 360 is made in the same company that makes all the products you hate, you have to realize the limits of painting broad strokes. This is where many critiques of Microsoft fall short, including the one by Brass. They assume uniformity, projecting a local set of experiences in part of the company as the model for the entire company.
  7. If you talk only to people who quit and were disgruntled you can’t possibly have the whole story. I’ve never met Dick Brass, but I know the Tablet PC was a commercial failure. As smart as Dick is, its likely he never understood how IE beat Netscape (it was more than the monopoly stuff), or Office beat Lotus/WordPerfect etc. He also might not know the long history of Windows and Office rejecting most requests from most other teams as a matter of both basic sanity and arrogance. Specific to Tablet PC, it started as a Bill Gates pet project. Working with Bill, who Dick curiously never mentions, was no treat, and unlike Steve Jobs, his direct involvement in matters of design is likely not a godsend. Articles like this one reads too much into corporate policies, as many of them are old (e.g. the review process) and good managers have always had ways to work within these rules to reward good employees. I’d agree the processes could be improved, but all the good VPs find ways to bend rules into loopholes.
  8. The greatest disease at Microsoft is lack of sharing lessons from failure, especially where innovation is concerned. Microsoft has made many big, visible bets. Many of them have failed, but that’s par for the course. The problem is these expensive lessons are swept under the rug, encouraging others in the company to repeat the same mistakes. Everyone loves to make fun of Microsoft Bob, but few can articulate why it failed. If you don’t understand why it failed, you don’t have any reason for laughing so hard, and you likely aren’t half as smart as you think you are. A case study on Vista, MSN Search, Microsoft Bob, The Tablet PC, etc. should be produced by an outside consultant, and stapled on the forehead of every manager at the company, once a day, until they read them all word for word. Then they’d take advantage of Microsoft’s so called experience and wisdom. Otherwise, they are being set up to make the same expensive mistakes again and again.
  9. The idea of Innovation, and Innovation Systems, is a distraction. Success in the market is a better scorecard and the most reliable source of criticism. Innovation, as the word is used in these articles, is a matter of taste. You can be very inventive and still get your ass kicked. Or do a great job with mostly conventional ideas, and kick more interesting competitors off the field. Apple, if you study their choices, doesn’t pull things out of the sky (digital music players, cell phones, and tablet PCs were all established ideas). They enter games others are already playing and kick their ass. But innovation is the least useful lens. The best criticism of Microsoft’s management is how, or how not, they’ve done against their competitors in terms of customer satisfaction. If innovation matters as much as people seem to claim it does, it’s well reflected in either market success or customer satisfaction, so worry more about those solid measures, rather than the ethereal notion of who is innovative and who isn’t.

22 Responses to “Microsoft and Creative Destruction”

  1. Scott Barstow

    Scott —

    As always, really enjoy your writing. I particularly agree with points 1 and 8 from above and have observed these things in numerous environments.

    For me, point #1 is probably the single-most important leading indicator of a project’s failure. If 30 people agree on something, its probably wrong for a couple reasons:

    1. You will never get 30 creative, artistic people to agree on anything, so if they in fact do their input is not really valuable or important and is probably just going along to keep earning their paycheck.

    2. There is no ownership of the results when that many people have to make the decision. If it’s my product idea, and I have full control over making it happen or not, at least its clear where the credit ( or pink slip ) should go. I might be right, I might be wrong, but it’s my vision. I should live and die with it. If it’s not this way, then there are too many fingers pointing at everyone else in the room.

    Thanks for another thought-provoking post.

  2. Astrida Valigorsky

    If you look at the problem from the reverse, I think it speaks to why Microsoft isn’t innovating.

    Microsoft has been historically known as the operating system, software, and hardware company that has been the most profitable. Profit was more usually important than innovation.

    The only time they have really innovated is when their profit depended on it. (The XBOX 360 is a good example).

    Look at Windows Vista – why did Microsoft launch a product that was going to crash or not work on a whole bunch of their installed user-base? Profit. They were worried they were going to lose marketshare to Apple. So they put the product out before it was really ready.

    Now who might be responsible for ensuring profit happens regardless of innovation. That is probably those middle managers. And why do they care so much about profit — its their job to, but also because that is the corporate mantra they serve.

    Microsoft has never really cared about innovation that much.
    Those middle managers learned long ago that half the people will buy the product because it has their name on it, it doesn’t matter.

    1. Scott Berkun

      You’re wrong on at least one count – profit motive. Very few products in the history of Microsoft have been profitable. I mean exceptionally few. Even X-box, which has made billions in revenue, has seen most of that consumed by costs.

      You also need to define the word innovation as I’m not sure what you mean by it (and as usual, it detracts from the point you’re trying to make). Do you mean doing something new? Doing something better? What?

      XBOX 360 had plenty of new features, as did Vista and Windows 7. Even Office 2007 boasts new UI metaphors and feature additions. You might not like them and they might not be as well crafted as what apple does, but they are definitely new ideas put into products.

  3. Esteban

    Hey, great article!

    I really like point 6, and I didn’t really realise that people do it (and I used to do it too of course) until I started in a relatively large, well known company. Then, after having released some products and read comments (in forums and such) I was made painfully aware of the fact that people build their own, homogeneous images of whole companies.

    I guess we tend to make up a story by filling the gaps between the very little facts we know about large things, like companies. It’s just easier to manage in our brains :-)

    I also like points 1 and 8. They’re probably quite common, at least among engineering-centric companies.

    BTW, I think there are a couple of typos: “it

  4. Scott Barnes

    Pretty much sums up my resignation speech 4 months ago :) – sadly I here not only has the above gotten worse, its gotten more refined in terms of becoming an artform.

    Scott Barnes
    Former Rich Platforms Product Manager (Silverlight/WPF)

  5. Michael

    “Windows 95, Office 95, Internet Explorer 5.0, MS Natural Keyboard, XBOX 360 were all excellent products by most standards,”

    You’re not serious are you? Xbox 360 has probably been the most unreliable piece of consumer electronics released in history.

    Windows 95 was all hype and no substance. It was a terrible product that grabbed the market attention but never actually delivered.

    And the MS natural keyboard is somewhat subjective. I’m sure if I had a stomach so big I couldn’t get my arms around it it might feel ‘natural’ but otherwise it feels anything but.

    Office 95 was also a terrible product, and they’ve only gone down-hill since.

    “The premise: The core point of the Brass article is how the introduction of middle management and bureaucracy has killed innovation at Microsoft.”

    Well that’s just bogus too. Let’s be frank. Microsoft was born out of the suppression of innovation. And that’s been their business model ever since. Can’t compete? Buy out the competitor and sink their product. Damn the customers. Rinse. Repeat.

    Get your blinkers off and have an unconstrained look at the company you used to work for, and you might see things very differently.

    1. Scott Berkun


      We’re are all entitled to our opinions, including me :)

      > Get your blinkers off and have an unconstrained look at the
      > company you used to work for, and you might see things very differently.

      It really takes a lot of balls to judge what blinders I do or do not have based on a single blog post, especially a post that is mostly critical, and I think reads as deeper in perspective than what Brass wrote (did you read it? as this was a response, perhaps you should).

      You are free to hate the company, but just because I don’t appear to hate it as much as you do doesn’t mean I have blinders. It might mean you don’t realize the possibility of multiple and conflicting, but valuable perspectives.

      You might have thought Windows 95 was garbage, but it was one of the most well received software products in history. For whatever horrible, misguided dark side of the force power motivated reasons, it sold very well, and solidified one of the greatest franchises in the history of software. Even if it’s all corrupt and evil and the success came for all the wrong reasons (which I suspect is the only sort of statement that would convince you I am blinder-free), this achievement has been replicated by few companies and likely never will.

      XBOX has also been very successful, especially XBOX- Live. You might hate these products, but they are doing well in the marketplace, a market where Microsoft’s “Windows monopoly” did not offer much advantage.

      At a minimum, can you agree the products I mentioned are the best Microsoft have done? That was really the core of my point. Even if you think they are horror shows, I have to believe you’d agree they are exceptional for Microsoft.

      Suppression of Innovation is sloppy thinking. There were thousands of applications and games made for Windows with all sorts of ideas. As grumpy as those developers might have been about the platform, or working with Microsoft, they still managed to invent lots and lots of things. Microsoft encouraged them to do this by giving them tools and SDKs and all sorts of stuff.

      This isn’t to say Microsoft didn’t try to suppress the ability of competitors to invent – of course they did (Java is an easy example). But Apple, Amazon, Google and any other corporation intentionally tries to limit some things in the market, and enable other things, as to their advantage. To what degree and with what ethical standard is another question, but the competitive motive is pervasive.

  6. Glen B Alleman

    I’m a on-trick pony user of MSFT products. MSFT Project is my one trick. We manage programs for our clients using MSFT Project.

    I’d have to say that MSFT’s primary problem with this tool is they don’t actually use it to manage their company in any credible way.

    I know they’ll say they do, but if they did it would not have all the lame, stupid, and down right buggy features in it.

    Our programs have 10’s of 1,000’s of activities, 100’s and sometimes 1,000’s of resources, on programs worth 100’s of millions to billions of dollars.

    If they managed MSFT with MSFT project it would be a tremendous product. Or even better if they asked people who managed programs worth the value of MSFT, if would be better.

  7. Rebentisch

    Why all this negativity? MSFT does a great job to generate and sustain its profits and fence off competition.

    I personally like the idea behind #1 but corporate performance tells another story. Probably it is not about inspirational products, brand and geek value but broad platforms for bread&butter systems. The Tablet PC is a fantastic conception and I really can’t explain why I don’t own one.

  8. Luis Oliveira

    Great article, Scott, as always.

    What really bothers me about MSFT is how much IBM like it has become. This has nothing to do with middle managers or the like. It has to do with the fact that you may be a very large (the largest) and profitable (the most profitable) company, for a very long time (several years, in fact) , without any real impact on your industry. Nothing. Zip. Nada. All the great products, all the cool innovations (however one may define that, before you mention), all the smart recruits, all from and to somebody else.

    Now, we can argue for how long this may go on. But we must agree that it is a sure thing that it will eventually end. Or not?

  9. Phil Simon

    Good piece, Scott.

    This really resonated with me:

    Microsoft has always been a place that gives way too many people a say in matters of design, vision and user experience, and it shows in the pervasive mediocrity of the majority of its products. Films need directors. Orchestras need conductors. But if you divide things into 30 pieces and ask 30 people to play creative visionary, mediocrity ensues. The better products at Microsoft are the ones where VPs modify the distribution of authority to create clear creative authority.

    Sounds like the antithesis of Apple, no? I really like your director analogy as well.

  10. Margaret

    Point #9 nails it. During my time there, I saw a scary amount of disregard for user research. And #2 as well, but MSFT has never been a creative / design centric culture, and I’m not sure they can become one.

  11. Lukas Svoboda

    Scott, this article was passed onto by a contact at Microsoft New Zealand after reading the crunchgear article.


    Very insightful – thanks for the analysis. It very useful parallel with the company I work for and the troubles we are having with IT innovation. Big take away for me is that it’s the organisational culture and it’s multi-headed facets and tentacles that has the biggest baring on innovation.

    There only one place you can go to ultimate responsibility for that – the top.

    One last thing – don’t confuse innovation with invention. Invention is thinking up great ideas. Innovation is turning these ideas into something useful – i.e. a commercial success.

    I think “innovation” as a word is often used when people really mean “invention”. If everyone used innovation as “ideas that are turned into something useful” the word would have much more currency.

  12. Cliff Adams

    I would like to see something come out of Microsoft that nobody expected. There was an episode of Dog Whisperer, where he tells us that if you pull a dog backwards or forwards, he has the physical capability and animal instinct to resist you in the opposite direction. If you pull the dog sideways though, you knock him completely off balance and take control of the animal.

    A lot of Microsoft software products simply pull the dog backwards. I know 1 person in Ohio with a Zune. My Xbox melted down and when I took it to ship for repair, I learned I was the 30th box that week in my area (granted the repair and ship was free and easy). The XBOX software platform is great. They need to do something Seth Godin would think of – – – Purple Cowish. Silverlight is there, but they need to get behind it and drive it more!

    Microsoft just doesn’t exude creativity to me, nor innovation. It’s simply, let’s improve what we’ve already sold.



  1. […] Creative destruction, of succesvolle zelfconcurrentie, blijft toch moeilijk voor Microsoft. Dat heeft een voormalig topman (die van 1997 tot 2004 in dienst was) ruim na zijn vertrek eens uitgebreid toegelicht. Hij moest begin deze eeuw bij Microsoft pc-tablets (en ook e-books) tot een succes maken, wat hem niet is gelukt. Grotendeels door de aard van het bedrijf, betoogde hij begin 2010 al. Aangevuld en bekritiseerd door anderen. […]

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