How Microsoft Competes

by | Jun 19, 2001

Beside Bill Gates, what does Microsoft have that contributes to their success? The authors spent a couple of years trying to find out. Their conclusions: seven complementary strategies and a small set of basic principals of operation. First, find smart people who know the technology and the business (market). The firm, from the beginning, has […]

Beside Bill Gates, what does Microsoft have that contributes to their success? The authors spent a couple of years trying to find out. Their conclusions: seven complementary strategies and a small set of basic principals of operation.

First, find smart people who know the technology and the business (market). The firm, from the beginning, has continuously sought, and employed, such people and can thus immediately spot (and grasp) opportunities when they appear.

Second, organize small teams of overlapping functional specialists. This is a blend of two leading concepts in new products management today — have small work groups and have highly skilled functional specialists. Microsoft has large teams of small teams. At all times functional skills are at work, and “team members” do not lose sight of their major contribution. Yet, by having an overall plan, and overall team management, the small clusters are involved across all functions. So the firm achieves both functional skills and multifunctional operations. They talk about having distinct functional skills that are overlapped at the boundaries. This gives independence but not anarchy.

Third, pioneer and orchestrate evolving mass markets. This means to be the first, or early, to enter a market, find and build mass markets, don’t wait for perfect products but build a steam of incrementally better ones flowing in the direction of the market, and try to lead those markets in directions favorable to the firm.

Fourth, focus creativity by evolving features and fixing resources. This means giving teams vision statements for general guidance, freedom to implement those as their skills direct, insisting that developers keep in mind the volume of demand for the features they are building, and then restricting the total effort by tight restrictions on dollars and time available. This gains creativity, but focuses it where the dollars are, and forces sign-offs.

Fifth, do everything in parallel, with frequent synchronizations. They want creative thinking to continue as deep into the project as possible, yet they want the order that comes from integrating all of the work. (See the earlier abstracts of articles by Johne and Pavlidis, by Iansiti, and by Nakata and Sivakumar about two phases: initiation and implementation.) Microsoft achieves all this by having the small groups work at feverish pace almost all the way through the project, but having a running synchronization at regular intervals where the output of each small group is hooked onto the total product being developed. This is the activity where one small group’s most recent set of code is put onto the “build” and the build then run as a semi completed product. The sync must work, and people are brought in “off the street” to run the programs (builds) as a check. This makes for continuous creation of parts, and continuous testing of the tentative “complete” product.

Sixth, improve through continuous self-critiquing, feedback, and sharing. Microsoft is its early years was not known for self-critique. The authors feel the firm today has so clearly accepted a new position on this point that critique has become one of their key strategies. Information-sharing is now important – both as between the marketplace and the firm, and as between various functions within the firm.

Seventh, attack the future. This means no complacency, do whatever is necessary to shape future opportunities in the market, and capitalize on them for Microsoft. They want to make favorable market change happen.

Reprinted from The Journal of Product Innovation Management, Volume 13, Number 4, July 1996, pp. 463-464. This article was excepted from the book, Microsoft Secrets, The Free Press.

FEEL FREE TO SHARE

Related articles

Keep Governments Out of Data Debates

Keep Governments Out of Data Debates

There is a role for the law in consumer data privacy, but for the most part, rather than looking for ways to regulate and punish, states should stay focused on actual violations of individual rights, such as when personally identifiable data is used to commit identity and financial theft.

Voice of Capitalism

Our weekly email newsletter.