Steve Ballmer: "Big = Innovation"

I have a lot of friends who work at Microsoft and they are all fantastic and brilliant. I think that Microsoft has been the best example of a large-scale talent culture the world has ever seen.  I also believe it is fair to say that Microsoft and IBM created desktop computing and by doing so changed the world. But I can like Microsoft's culture, it's people and (some) of it's products and still think that the execs are starting to turn off the lights before they exit the room. Let's face it: Microsoft is having a bit of trouble these days. So it's up to Steve Ballmer to go out there and tell everybody that black is white and that up is down.

Microsoft has a long history of trying to tell people that they really are more innovative than the companies they compete against, but it feels as if the troops aren't quite buying it anymore. So Steve has to go out there and ignore reality and say silly things as verbal slight-of-hand so that you don't pay attention to the fact that Wall Street is livid, Google and Yahoo are eating their lunch, Apple is way cooler and Linux and Firefox are making real gains. I admit that it is next to impossible to keep a cash pump like Microsoft both big and nimble at the same time, but saying that big IS nimble is just asinine.

Below is a clip from an interview Steve gave which goes directly to my point. I guess Microsoft developing the first widely available BASIC compiler was less important than their "Wreck a Nice Beach" speech recognition platform (that has yet to ship). First widely accepted desktop OS? Not a big deal. Kitchy (and completely failed) operating system "Bob"? Now we're talking innovation baby!

News flash Steve: there aren't a lot of big companies because Wall Street makes money every time a big company gets bought by another big company. It really doesn't have anything to do with your track record as an innovator. Saying that being one of the few big companies is proof of your innovation is like saying that GM is an innovation leader because there are only 6 major car companies in the world (which must be why everyone is buying Toyotas). 'Splain that one to me Lucy...

Read the full interview here.

Q: On the issue of large companies being innovators, sometimes it's more difficult. They can't turn as fast. But you might not agree with that.

A: No, I don't, actually. Ask the following question: Who does more innovation, small companies or large companies? In aggregate, you have to say large companies do more innovation than small companies.

Now, if you want to say, how often do big companies just shock the world with their innovation versus small companies? Probably less often. Not because they're doing less innovation, but it's shocking when a small company does big innovation. You know, if a small company does big innovation, it becomes a big company. 

There aren't too many small companies that actually became big companies. I've been with Microsoft for 26 years, and there's probably been as many of those in the last 26 years as any time in history. Right? You get Compaq, Microsoft  --  basically in that period of time you'd put Intel on the list, you'd put Cisco on the list, you'd put Google and Yahoo on the list, Oracle would be on that list, eBay would be on that list. 

Who else? Who would I've missed? SAP would be on that list. Somebody might put Apple on that list, to be fair. But you don't get a very long list. You get maybe 10 companies.

Comments

[Colin Kingsbury]

I think the cream in my coffee is curdling as I write this, but I think Ballmer has a leg to stand on here.

I could go into a lot more detail here, but I think that measuring innovation solely in terms of the germination of new ideas misses the point. If we think about innovation as the process of moving people from point A to point B, small companies are doing it on foot, with wheelbarrows, bicycles, and occasionally a small car. Microsoft does it with railroads. When Microsoft updates Office (and Office 2007 is a total redesign, the first in 15 years), they are changing the fundamental design of a product with an installed base in the hundreds of millions.

To be fair, MS has been way behind the curve more than once in the recent past. The Internet "happened" while they weren't paying attention, as did the notion of web search as a high-value product. But if you wipe away the pervasive distrust for Redmond that underlies so many analyses of the company's position, you'll find some very powerful things going on. The thing with Ballmer is that he is a very divisive personality, and so a lot of people discount him a priori.

[Jeff Hunter]

Colin - I Kant believe it. Someone used "a priori" in a comment on my blog. It's enough to make an old philosophy major cry. (Well, not that old.)

Perhaps the potential difference of opinion lies in what we mean by "innovation." To use your metaphor, I think that big companies tend to do a good job of coming up with lots of new ways to make wheelbarrows better, but rarely come up with the idea of a train. Christensen explored this best. Microsoft can't be a disruptor because it earns too much money through incrementalism.

To your example, The Office system may indeed be a complete rewrite (and I have heard that it really rocks, so I am excited to see it), but an increasing number of people are producing text on light-weight, network-centric thin clients, not feature rich, thick-client task specific applications. Microsoft simply can't afford to innovate in that areas, because it would kill a major cash cow.

As I said in the piece, I think that Microsoft has a lot to crow about, and I am really not one of those who is predisposed to dislike Mr. Ballmer just because he is with the evil empire. I just think that he should be making his case more the way you made it, and less in the sort of logic-deying way that he did.

Thanks Colin!