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A Comparison in Corporate Innovation Between Google and Microsoft : From Beginning to End scripted by Employees

Here are two highly contrasting personal stories about innovation in major technology companies, Microsoft and Google - in Microsoft's case from a former Vice President and in Google's case, an employee who has been with the organisation for one month. This is a fascinating comparison between an idealistic starter at Google, eyes wide open as if experiencing the candy shop for the first time, where all before him seems like an unclimbed snow covered mountain peak full of wonder and awe offering the glorious challenges of a lifetime, not without its dangers, that can be conquered in the due process of time and a former Microsoft Vice President, who like many true innovators in organisations was thwarted over time not by his will or want to innovate or for that matter the organisation's publicly expressed desire to do so but by the organisation's internal culture and processes and the inherent power struggles which regularly conceal and undermine the nuances and subtleties required for organisational innovation. These articles read together offer compelling examples of the importance of idealism, yet show its powerful constraints and undoing. The real mystery in innovation is seeking the balance between imagination and pragmatism. This piece begins with the untainted imagination and ends...well read on.

The first story is entitled Randomn Observations - Things I have learned at Google so far and it is written anonymously for obvious reasons.

"Well I've been an employee at Google for about a month. So this seems like as good a place to reflect for a moment.

The first thing that I've learned is that internally Google is incredibly open, but externally there is a lot we can't say. I understand and support a lot of the reasons why it is so, but it can be frustrating. There is a lot of really cool technology at Google that people never hear about. The statistics of what Google deals with are astounding. The technology we use to deal with it is amazing. The way we scale is unbelievable. (I really wish I could go back and have a few discussions on software development methodology raising points about what has proven to scale at Google...) One random fact that I know I can say is that computations happen in our data centers with about half the power drawn for what is industry standard. I'm not allowed to say how we do it, but it is a rather amazing testimony to what smart people can accomplish when we put our minds to it.

Moving on, what about Google's culture? I would describe Google's culture as "creative chaos". There was some confusion about where I was supposed to be when I started. This resulted in the following phone call, "Hello?", "Hello Ben, this is Conner (that's my new manager), where are you?" "Mountain View." "Why are you there?" "Because this is where the recruiter said to go." "Good answer! Nice of them to tell me. Enjoy your week!" This caused me to ask an experienced Googler, "Is it always this chaotic?" The response I got was, "Yes! Isn't it wonderful?" That response sums up a lot about Google's culture. If you're unable to enjoy that kind of environment, then Google isn't the place for you.

Seriously, the corporate culture is based on hiring really smart people, giving them responsibilities, letting them know what problems the company thinks it should focus on, then letting them figure out how to tackle it. What management hierarchy there is is very flat. And people pay little attention to it unless there is a problem. You are expected to be a self-directed person, who solves problems by reaching out to whomever you need to and talking directly. Usually by email. The result is an organization which is in a constant state of flux as things are changing around you, usually for the better. With a permanent level of chaos and very large volumes of email. It is as if an entire company intuitively understood that defect rates are tied to distance on the corporate org-chart, and tried to solve it by eliminating all barriers to people communicating directly with whoever they need to communicate with. (Incidentally the point about defect rates and org charts is actually true, see Facts and Fallacies of Software Engineering for a citation.)

Speaking of email, working at Google you learn really fast how gmail is meant to be used. If you want to deal with a lot of email in gmail, here is what you need to do. Go into settings and turn keyboard shortcuts on. The ones you'll use a lot are j/k to move through email threads, n to skip to the next message, and the space bar to page through text. And m to hide any active thread that you're not interested in (direct emails to you will still show up). There are other shortcuts, but this is enough to let you skim through a lot of email fairly quickly without touching the mouse too much. Next go into labels and choose to show all labels. Your labels are basically what you'd call folders in another email client. (Unfortunately they are not hierarchical, but they do work.) Next as you get email, you need to be aggressive about deciding what you need to see, versus what is context specific. Anything that is context specific you should add a filter for, that adds a label, and skips the inbox. Nothing is lost, you can get to the emails through the list of labels on the left-hand side of your screen in gmail. But now various kinds of automated emails, lower priority mailing lists, and so on won't distract you from your main email until you go looking for them.

When you combine all of these options with gmail's auto-threading features, it is amazing how much more efficiently you can handle email. In fact this is exactly the problem that gmail was invented to handle. Because this was the problem that Paul Buchheit was trying to solve for himself when he started gmail. It is worth pointing out that Paul Buchheit was a software engineer at Google. He didn't need permission to write something like gmail. Corporate culture says that if you need something like that, you just go ahead and do it. In fact this is enshrined as an official corporate policy - engineers get 20% of their time to do with pretty much as they please, and are judged in part on how they use that time. I found a speech claiming that over half of Google's applications started as a 20% project. (I'm surprised that the figure is so low.) To get a sense of how much stuff people just do, visit Google Labs. No corporate decision. No central planning. People just do things like start putting up solar panels in the parking lot, and the next thing you know Google has one of the largest solar panel installations in the world and has decided to go carbon neutral. And the attitude that this is how you should operate is enshrined as official corporate policy!

You've got to love corporate policies like that. Speaking of nice corporate policies, Google has quite a few surprising ones. For instance they have benefits like heavily subsidized massage on site (I've still got to take my free hour massage for joining), free gym membership, and the like. Or take their attitude on dogs. Policy says that if your immediate co-workers don't object, you can bring your dog to work. Cats are different, however. Nothing against cats, but Google is a dog place and cats wouldn't be comfortable. (Yes, there are lots of dogs around the offices, and I've even seen people randomly wander over to find out if they can borrow someone else's dog for a while.) Hmmm. Sick day policy. Don't show up when you're sick and tell people why you're not showing up. Note what's missing. There is no limit to how much sick time you get if you need it. Oh, and food. Official Google policy is that at all times there shall be good, free food within 150 feet of every Googler. OK, admittedly the food quality does vary. That in Mountain View is better than anywhere else (the larger clientele base lets them have a much more varied selection). But you quickly learn why it is common for new Googlers to put on 15-20 pounds in their first year. (I'm trying to avoid that. We'll see if I succeed...)

But, you say, isn't this crazy? Doesn't it cost a fortune? The answer is that of course it does. But it provides value. People bond over food. Even if you're not bonding, having food close by makes short meals easier. And the temptation to continue working until dinnertime is very real. (Particularly if, as with me, you'd like to wait until rush hour is over before going home.) Obviously no normal CFO would crunch numbers and see things that way. But Google stands behind that decision, and the people who work there treasure the company for it.

Speaking of the people who work there, Google has amazing people. It is often said that engineers find working at Google a humbling experience. This is absolutely true. It took me less than a day to realize that the guy sitting next to me is clearly much smarter than I am, and he's nowhere near the top of the range of talent at Google. In fact, as best as I can tell, I'm pretty much average, though I'm trying hard to hold out a ray of hope that I'm slightly better than average.

Let me put that in context. The closest thing that I have to an estimate for my IQ is scoring 2340 on the GRE exam in 1991. Based on conversions that I've seen, that puts me at about the top 0.01% in IQ. Now I was really "on" that day, happen to believe that there are problems with the measurement of intelligence by an IQ test (a subject which I may devote a future blog post to), but without false modesty I wouldn't be surprised to find that I'm as high as being in the top 0.1% in general intelligence (however that could be measured). Which in most organizations means that I get thought of as being very smart.

However software development is a profession that selects for intelligence. By and large only good software developers bother applying to Google. And Google rejects the vast majority of their applicants. Granted the filtering process is far from perfect, but by the time you get through that many filters, someone like me is just average.

This leads to another point of interest. How astoundingly complex the company is. I believe that organizations naturally evolve until they are as complex as the people in them can handle. Well Google is tackling really big, complex problems, and is full of people who can handle a lot of complexity. The result? I've been told that I should expect that after 2 months I'll only be marginally useful. My initial learning curve should start to smooth out after about 6 months. And every year I should expect half of what I've learned to become obsolete. (Remember what I said about Google having a certain level of permanent chaos? If you're like me, it is exhilarating. But sometimes the line between exhilarating and terrifying can be hard to find...)

Oh, and what else did I learn? That we're hiring more people this year. :-)"

The second story is entitled Microsoft's Creative Destruction and is an op-ed piece from the New York Times written by Dick Brass, a former Vice President at Microsoft from 1997 to 2004.

"AS they marvel at Apple’s new iPad tablet computer, the technorati seem to be focusing on where this leaves Amazon’s popular e-book business. But the much more important question is why Microsoft, America’s most famous and prosperous technology company, no longer brings us the future, whether it’s tablet computers like the iPad, e-books like Amazon’s Kindle, smartphones like the BlackBerry and iPhone, search engines like Google, digital music systems like iPod and iTunes or popular Web services like Facebook and Twitter.

Some people take joy in Microsoft’s struggles, as the popular view in recent years paints the company as an unrepentant intentional monopolist. Good riddance if it fails. But those of us who worked there know it differently. At worst, you can say it’s a highly repentant, largely accidental monopolist. It employs thousands of the smartest, most capable engineers in the world. More than any other firm, it made using computers both ubiquitous and affordable. Microsoft’s Windows operating system and Office applications suite still utterly rule their markets.

The company’s chief executive, Steve Ballmer, has continued to deliver huge profits. They totaled well over $100 billion in the past 10 years alone and help sustain the economies of Seattle, Washington State and the nation as a whole. Its founder, Bill Gates, is not only the most generous philanthropist in history, but has also inspired thousands of his employees to give generously themselves. No one in his right mind should wish Microsoft failure.

And yet it is failing, even as it reports record earnings. As the fellow who tried (and largely failed) to make tablet PCs and e-books happen at Microsoft a decade ago, I could say this is because the company placed too much faith in people like me. But the decline is so broad and so striking that it would be presumptuous of me to take responsibility for it.

Microsoft has become a clumsy, uncompetitive innovator. Its products are lampooned, often unfairly but sometimes with good reason. Its image has never recovered from the antitrust prosecution of the 1990s. Its marketing has been inept for years; remember the 2008 ad in which Bill Gates was somehow persuaded to literally wiggle his behind at the camera?

While Apple continues to gain market share in many products, Microsoft has lost share in Web browsers, high-end laptops and smartphones. Despite billions in investment, its Xbox line is still at best an equal contender in the game console business. It first ignored and then stumbled in personal music players until that business was locked up by Apple.

Microsoft’s huge profits — $6.7 billion for the past quarter — come almost entirely from Windows and Office programs first developed decades ago. Like G.M. with its trucks and S.U.V.’s, Microsoft can’t count on these venerable products to sustain it forever. Perhaps worst of all, Microsoft is no longer considered the cool or cutting-edge place to work. There has been a steady exit of its best and brightest.

What happened? Unlike other companies, Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation. Despite having one of the largest and best corporate laboratories in the world, and the luxury of not one but three chief technology officers, the company routinely manages to frustrate the efforts of its visionary thinkers.

For example, early in my tenure, our group of very clever graphics experts invented a way to display text on screen called ClearType. It worked by using the color dots of liquid crystal displays to make type much more readable on the screen. Although we built it to help sell e-books, it gave Microsoft a huge potential advantage for every device with a screen. But it also annoyed other Microsoft groups that felt threatened by our success.

Engineers in the Windows group falsely claimed it made the display go haywire when certain colors were used. The head of Office products said it was fuzzy and gave him headaches. The vice president for pocket devices was blunter: he’d support ClearType and use it, but only if I transferred the program and the programmers to his control. As a result, even though it received much public praise, internal promotion and patents, a decade passed before a fully operational version of ClearType finally made it into Windows.

Another example: When we were building the tablet PC in 2001, the vice president in charge of Office at the time decided he didn’t like the concept. The tablet required a stylus, and he much preferred keyboards to pens and thought our efforts doomed. To guarantee they were, he refused to modify the popular Office applications to work properly with the tablet. So if you wanted to enter a number into a spreadsheet or correct a word in an e-mail message, you had to write it in a special pop-up box, which then transferred the information to Office. Annoying, clumsy and slow.

So once again, 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. And despite the certainty that an Apple tablet was coming this year, the tablet group at Microsoft was eliminated.

Not everything that has gone wrong at Microsoft is due to internecine warfare. Part of the problem is a historic preference to develop (highly profitable) software without undertaking (highly risky) hardware. This made economic sense when the company was founded in 1975, but now makes it far more difficult to create tightly integrated, beautifully designed products like an iPhone or TiVo. And, yes, part of the problem has been an understandable caution in the wake of the antitrust settlement. Timing has also been poor — too soon on Web TV, too late on iPods.

Internal competition is common at great companies. It can be wisely encouraged to force ideas to compete. 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.

As a result, while the company has had a truly amazing past and an enviably prosperous present, unless it regains its creative spark, it’s an open question whether it has much of a future.

Reader Comments (3)

Interesting, yet predictable, comparison of a young company compared with an established one.

Since I started working in 1960 I have heard similar stories in the various professions or occupations I have worked in from engineering to architecture, from television news writing to newspaper delivery, from lawn moving to being a janitor or garbage collecting team member.

Gordon MacKenzie's book ORBITING THE GIANT HAIRBALL sums up many of the stories I have heard since I entered the CREATIVITY MOVEMENT or FIELD from a 30 year veteran's point of view.

Listening to people from corporations such as Kodak, IBM, Polaroid, P&G, K-C, 3M to small boutique ad agencies to giants such as BBDO has provided similar stories.

the larger an organization gets
the longer an organization exists
the more successful an organization becomes
the longer employees remained employed
the older employees get

the more organizations become GIANT HAIRBALLS that only look organized on ORGANIZATIONAL CHARTS that very few people ever see or even follow.

Thanks for the stories Ralph.
February 7, 2010 | Unregistered CommenterAlan
Reading these two accounts is just like reading about complexity theory. When an entity (a complex) has energy flowing through it there will be a continuation and possibly expansion. When there is no input of energy - a fixed system - there is inevitable entropy where the system will gradually decay. When humans are involved in a system the principle source of energy input is creativity (innovation etc).

The Complexity Theory ideas are still both hard to grasp and resisted as just being too weird. How can you just leave things alone and let them self-organise? Surely someone has to dominate (manage) something as large and as important as a corporation? How interesting that these stories answer those questions in a seemingly counter-intuitive fashion. Yes, things will self-organise when left alone and no, there is no need for dominant direction from a single person over the group. There is quite a lot of material to show that the biggest problem in human systems is having to compensate for the interference of controlling behaviours etc.

What IS important, however, in any self-organising system are the 'initial conditions' and 'the fundamental governing principles'. As Murry Gell-Man says, emergence comes from fundamentals plus accidents (experience). Fish can school and birds can flock with only 3 or 4 organising principles. You can read between the lines of the two stories and see the handfull of background principles that are driving growth and decay.The first writer simply describes the high creative energy at the 'edge of chaos' and the second writer simply describes the loss of energy that occurs in a system that is becoming rigid.

Stars take a long time to decay before they finally implode or explode. The Sun in our solar system will, eventually, burn itself out as all closed systems will. It seems strange to think of Windows as being a closed system after all of the innovation it has begun. The beauty of human involvement is that a system can be 'opened' again simply by the infusion of creativity and innovation (plus a few other things, but that is the start). Before that iPod, Macintosh was looking like a very rapidly decaying star. Entropy has, clearly, stopped and the corporation has become an expanding system. Wow!

Both these very interesting reflections are bound up in the very same fundamental principles of complexity and the fascinating impact of humans in a system to enhance or destroy. Person centred corporate design is still a very difficult thing to explain to profit driven, hierarchy rigid, system and infrastructure dependent corporate leaders. Thankfully, neuroscience is now providing a reliable and trustable foundation of knowledge that supports and enhances the efforts to educate corporate leaders of the benefits that will come from creativity, innovation, human centred infrastructure etc etc.

These two stories are exactly what we need to discuss in regard to creativity and innovation. Great topic Ralph.
February 8, 2010 | Unregistered CommenterRichard Hill
We also have some case studies in our research / programs about how google talk about 'breathing innovation' and Microsoft talk about 'systematizing innovation' - so can creativity be systematized???
February 8, 2010 | Unregistered CommenterAndrew Grant

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