Microsoft Fiefdoms Are the Enemy Within

Ann All

A little more than a week ago IT Business Edge contributor Rob Enderle wrote about what he believes is at the core of why Apple is outperforming Microsoft. He mentions Microsoft's lack of focus, which some folks, including me, think is a challenge for Google as well, and says Apple puts more resources behind its products.


Enderle says Apple launched seven major products during the past decade, six of which were successful and one (AppleTV) which did better than most in its class but didn't meet expectations. In contrast, Microsoft rolled out 26 major products, two of which dominated their segment (XP and Windows 7), four of which did OK and most of the rest flops. Writes Enderle:

About six products out of 26 did well or reasonably well compared with six out of seven for Apple. That's the same number of successful products, but Apple's six took the company higher than Microsoft's likely because Apple put its entire support behind seven, while Microsoft diluted its support across 26.

Enderle points out Microsoft often had ideas first but struggled to bring complete products to market or to create the demand needed to move them. His examples: Pocket PC and Portable Media Center, which "clearly preceded and anticipated both the iPhone and the iPod Touch, but didn't enjoy the focus Apple's products had," and Origami and Mira, two tablet PCs. Wrote Enderle:

You could argue that Microsoft beat Apple significantly in creativity in these cases, but it showcased that it doesn't matter who gets the idea first, but who delivers it to market successfully.

I've often thought the corporate innovation process is a bit like a good comedy routine. (That is, all about execution and a great sense of timing.) But the corporate culture underpinning those things is important, too. A New York Times opinion piece written by Dick Brass, a Microsoft VP from 1997 to 2004, clearly highlights this point.


Brass describes an internal culture filled with infighting and unhealthy competition. When Brass' group was building a tablet PC in 2001, the then-VP in charge of Office didn't like the idea of a tablet, thinking users would never abandon keyboards for styluses. According to Brass, he refused to modify Office applications to work properly with the tablet. Writes Brass:

So ... even though our tablet had the enthusiastic support of top management and had cost hundreds of millions to develop, it was essentially allowed to be sabotaged. To this day, you still can't use Office directly on a Tablet PC.

That doesn't mean internal competition is always bad, says Brass. It can be wisely encouraged to force ideas to compete. (I made much the same point in a post from July, noting that teams with strong oppositional voices make organizations more adaptable and can help clarify a team leader's own opinion, sometimes changing his or her mind while other times solidifying it.) But, writes Brass:

The problem comes when the competition becomes uncontrolled and destructive. At Microsoft, it has 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. It's not an accident that almost all the executives in charge of Microsoft's music, e-books, phone, online, search and tablet efforts over the past decade have left.


Agreed. Any company where internal fiefdoms are allowed to rule risks losing sight of its overall corporate goals and giving away the keys to the kingdom.

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