Jiri’s Notepad

There’s a great interview with Ray Ozzie of Groove and Lotus fame on a range of subjects related to Microsoft as a corporate and its strategic direction. His responses on innovation and architecture governance questions are below.

On achieving long-term vision via other people

Knowledge@Wharton: […] How do you balance that architectural vision with the day-to-day responsibilities to get a product out the door on time and at the right price?

Ozzie: […] The first thing I have to embrace to be successful is to go where people are and help them understand how to reshape themselves for the future on their terms. The Office group has a different culture than the Windows group, [which has a] different culture than the Xbox group. They do development differently; they do planning differently. So that’s number one.

Number two is that it’s highly social. We have to use a combination of center and edge in order to affect things. I may talk to the leaders of a group and ask them what their plans are. I use storyboarding, so I might map out a storyboard for how I would see things panning out moving forward.

At the same time, the people on my staff work directly with the people within the organization [who work for those] leaders so they can get the message in a less threatening way than having this guy at the top come in.

On management overhead

Ozzie: Well, I’ll tell you how I frame it — which may be differently than some people. I’ve spent my whole career building software and organizations with one thing in mind — reducing coordination cost.

The purpose of collaborative software and, in my view, leadership, is to try to figure out the right way of structuring to reduce coordination costs. As systems get bigger, unless you intentionally reduce coordination costs, things explode.

With respect to Xbox, incubation is one way to initially reduce coordination costs. You say, “We’re going to do it off to the side.” That gives the rest of the organization permission to ignore it, so that’s good. It manifests itself in many ways. Some people say, “Wow, what are those guys doing over there? It’s really cool.” And some people get cynical and go, “Ah, those guys — there they go again, off doing their own thing.” But it reduces coordination costs.

Later, as [the project] becomes more real, people can begin to factor it in and understand the right touch points. But that gives them the freedom to innovate and work without high degrees of coordination.

What tends to be more difficult are centrally mandated [commands] — “Everyone shall depend on this new thing.” There are lots of coordination costs in that.

If you declare that everyone [should] use something that’s already fully debugged and out there like a standard — HTML [for example] — that actually reduces coordination costs. Everyone can rally around something that works. But if it’s telling everybody to rally around something that’s still in the process of being defined, that causes combinatorial explosion in coordination costs.

On how Micrsoft innovates

So there is no simple answer, but what you’ll find throughout the company are many different mechanisms for these things. MSR [Microsoft Research] is an example of a big chunk of innovation that can happen without causing coordination costs in the rest of the company. They innovate and then they have things like TechFest to make their innovations visible to other points in the company. And then at the next release, those people will incorporate those changes.

Then we have another group that does applied research — Live Labs. It’s a group that reports to me. They’re still researchers, but they’re trying to weave [their work] into products that have more applicability from the start.

Then, there are incubation groups within the business units. And those are very close to the product groups and the marketing groups within those organizations.

[…]

Ozzie: “Think week” has been transitioning from a single “Bill thing” to something where a broader audience gets the chance to comment on submitted papers. The tradition of think week is incredibly strong. It says to the whole company, “Submit your best ideas.” But whereas that [previously meant] submit them to Bill and get Bill’s feedback, what we’ve realized is that there are some interesting models, Digg-like models, where people can look at things, comment on them and see what emerges in terms of actually making things more concrete.

So, yes, we will continue “think weeks,” but I will not be taking it on as, “Okay, now everybody can submit [your ideas] to Ray.” I’ll be a visible participant, but a participant, nonetheless.