Name: Why Microsoft struggles to innovate
Uploaded: 2014-04-10
Duration: 4 min 4 s
Description: Former Microsoft COO Robert Herbold says preserving Windows and Office stopped the company from innovating in mobile.

Let's apply your principles to Microsoft. You've been gone for ten years now, Yes. Your timing was very good when, when, when you left Microsoft the stock was at an all, all time high. The company continues to make a lot of money, but on the other hand it has a lot of strategic problems, product problems, and so on. Right. So, first of all, what is your assessment ten years out? Well it's a tough industry. You know the thing that's beautiful about technologies is great new ideas win. Okay, that's the way it should be. And Microsoft has had two of the greatest ideas, and have won in the biggest possible way. And we're talking about Office and Windows. So first responsibility is to manage those things well, because the shareholders are counting on it. Secondly, you have to come up with some new ideas that, that register another kind of winner, along with those two. That's not easy, let's face it. They've been fairly successful with the Xbox after losing a lot of money for a period of time. Now they've got a Kinect product that's very hot. On the other hand, you can't help but admit, hey, in regard to smart phones, guess what? They missed the train. They're madly trying to catch up right now. Microsoft is very, very persistent. And they've got a lot of resources and they've got a lot of talent. So you never wanna count them out, but the fact is, they have a lot of work to do. Tablets. Bill was carrying around a tablet ten years ago. And what's fascinating, at that time, the tablet was used to take notes. Yeah. There weren't applications like social media and the like. What has really caused the tablet to emerge as a powerful device for individuals is some of the tools like social networking. So the technology industry is total fun. And Microsoft's a player, you're not always gonna win, but you have to keep at it and and I think you'd characterize Microsoft as very persistent. Of your ten principles in your book, which would be one that would illustrate something that Ballmer, as a leader of Microsoft, needs to, need to be better at? Well I don't know that its Steve personally, but what happens with larger organizations is they tend to reach for consensus management. Mm- hm. When you have a lot of people around, they wanna, they wanna help. They wanna contribute, okay? There's, their heart's in the right place. They wanna go to meetings. They wanna be involved and pretty soon you look at people's calendar they're going to too many meetings. You, you're answering too many emails in fact that, that has become your mode of operation. That's a huge mistake. Yes. And so consequently, what an organization, even when it's very large, has to organize itself in a way that it feels very small. When you look at some of the most successful companies today let's take two in, in the technology world an Apple or, or an Amazon. They've both been very successful at cannibalizing their existing products. It flies in the face of this insistence or, or need I think, at Microsoft, to protect the two great franchises, Windows and, and Office. By and large, what you want out of new idea. Is you want enough independence so that it can live. That it can survive and truly get a vote out there with the consumer. You don't wanna slow it down and, and congest the thing. A lot of companies do that. So in the case of Microsoft, you'd make the case that X, Xbox worked because, in part, because it was allowed to be independent, make a big investment. And go out, something like a Zune or, or various mobile products, didn't perhaps be -, for the sake of argument, because they were very tied to Windows. In some cases they were tied to Windows and, in other cases you're using people who have experience in other areas and sometimes that's a burden. Because you bring a mentality as to how products are supposed to work. And one of the things that's true in this industry, is sometimes your best ideas are generated, and sometimes your best projects are managed, by people who are under 30 years old. Why? They don't have the mental baggage.

Former Microsoft COO Robert Herbold says preserving Windows and Office stopped the company from innovating in mobile.