Innovation Strategy at Microsoft Essay

Microsoft Corporation is an American multinational software corporation that develops, manufacturers, licenses and supports a wide range of products and work related to computing. Microsoft is the worlds largest software maker and affects millions of users worldwide every day. The company recorded uncomparable high revenue bringing in $73.7 billion for fiscal year 2012.After analyzing this case, I consecrate concluded that the main problem for Microsoft is that their deep silos are inevitably hindering its ability to produce products and/or service to compete with current computing trends in the fabrication. While Microsoft continues to dominate the computing world, it can non be attributed to their creative activity strategy. To address these problems I suggest that Microsoft alter their environment to better simulate innovation. Microsoft should create an environmental finis in which employees are encouraged to venture outside their tasks, minimal time pressure, and high job aegis give positive feedback for initiatives taken.These recommendations are based on specific c at one timepts from the book. Current environment inside Microsoft does not currently provide positive feedback. Their current environments sets commitments for each division and employees are faced with performance evaluations. When employees failed to get through designated commitments, employees were penalized. Addition wholey, employees are penalized for taking on activities unrelated to their commitments. First in chapter 6 we precept that in an industry where egression is slowing and competition becomes stronger, an giving medications success requires innovation. This is why it is recommended that Microsoft localize on simulating innovation.We saw that innovators derive from individual developers and at that placeby can be considered the true source of innovative products. While an organization system sham and creative individuals are key stakeholders in the business, it is not enough to drive innovation. Per chapter 6, there are several effective ways to simulate innovation- of which are the recommendations suggested above. renewing Strategy at Microsoft Clouds on the HorizonACC Applied Carbon Corporation (large environmental technology conglomerate) EBC (Executive Briefing Center)Innovation team- gate was engage with the engineer and the algorithm, he talked about how the algorithm that could increase the speed of the search This suggestion by gate reduced time used on massive server banks Later he proposed an innovation to monetisation assume that would save corps millions of energy time. Innovation at Microsoft Top-Down or Bottom-Up?Innovation drivers Product groups, Microsoft Research labs, Innovation teams generating grassroots innovation Innovation at Microsoft really was a one-woman(prenominal) show, vision and drive of a senior leader, i.e. Gates, then would work its way down Gates would send out memos calling for dramatic change in produ cts, services and technologies Microsoft offered Extensions on existing products & services result of product groups New products & services accounted for 1/3 Microsoft RevGrassroot InnovationGrassroot innovation- attempt to hook into diverse ideas of Microsoft employees & turn into profitable new businesses Participated in ThinkWeek, Quest, IdeAgency & Innovation Outreach Program ThinkWeek- technical papers submitted once a year directly to Gates who reviews them for a week & makes comments Quest- Similar to ThinkWeek but involved Microsofts some senior & accomplished technical minds Thinkweek & Quest tapped into minds of senior technical staff- ignored other employees IdeAgency- to safe realize potential in grassroots innovation by all Microsoft employees Executive sponsor (most probable product group leader) identified a prb that needed a solution & all employees through an IdeaExchange beak would submit solutions Learning by doing- needed more adjustments- submitting ideas wasnt enough.Therefore top ideas of IdeAgency were selected (ie. 300 first session), form groups, were given a budget & resources to develop a prototype within 8 weeks. ThinkWeek, Quest, IdeAgency- all internal request for info, IOP implemented to include public Chief innovation officers from 10 Microsoft largest accounts for two-day innovation brainstorm conference- asked to look 5 years ahead (LT ignore ST) Steep believed this would drive innovation b/c had two critical flows of information done in product groups & Microsoft research labs 1. Top-down guidance2. bottom-up expertiseThe Information Technology Industry Clouds on the Horizon Grassroots innovation initiatives response to increase competition from all sides (apple, amazon, google, linux and others) Microsoft generated most rev from consumer & enterprise licenses for software products 08 operating income $22.5B on rev of $60.4B (15% growth rate) New technologies threaten importance of Windows operating system as a univ ersal platform, chthonianmining traditional licensing model used by Microsoft for so long Microsoft business model relied heavily on product groups within divisions while each group tailored its software development process to its core technology & grocery Product groups worked closely with Sales, Marketing & Service division to deliver on customer needs Again, licensing model has been successful for Microsoft but many business analysts that shrink-wrapped software method of generating revenue will be noncurrent and lose to cloud computing items 2000 Apple launched MobileMeYahoo implemented online advertising business model amazon online service & transaction business modelGoogle online info search leaderGrassroots Innovation under MicroscopeProduct groups focus on ST & Research labs on LTSo many processes running concurrently with much of capital tied into them is Microsoft delivering on its process? The ThinkWeek & Quest relied heavily no Gates- so what if he get out? IdeAg ency great on paper- while delivered many successes, few drawbacks- immense time required to facilitate overly many hurdles trying to make fruitful collaborations in resistant environment Too much effort to get anything going across the product groups Many employees refused to work on projects beyond their be objectives and commitments out of fear of receiving poor evaluations Organization Structure & DesignThree divisions Platform Products & Services, Microsoft Business & amusement & Devices Deep silos that barely communicated or collaboratedThree business divisions, seven business groups & 27 product groups were told to focus on its own individual profit/loss. Business groups didnt have time or inducing to participate in collaborations away from their own group Culture & BeliefsDeveloper-centric company b/c most employees possessed extraordinary amount of tech expertise- every employee (even senior mgmt.) had small office with a private policy to concentrate better Culture a result of Gates behavior and mgmt. system drive by 3 core beliefs- 1) individual excellence (believed they had brightest employees in the world) 2) competitive behavior3) accepted to neer accept 2nd best (Go Big or Go Home)These believes lead to extreme intra- and interfirm competition vividness Competition amongst each other for positionsPersonal meeting with Gates & his lieutenants in which major employees are dissected & reviewed (can make or break your career at Microsoft) Culture & BeliefsIndividual & group incentives were primarily influenced by commitments tied to each employees output- detailed objectives stated in form of a contract between employee & supervisor. At beginning of year commitments set in stone & couldnt be changed.