Structural strength a key driver of innovation
The notion of the solo inventor in the popular imagination is largely a myth: as I’ve discussed here before, breakthroughs overwhelmingly grow out of collaboration, teamwork and the free dissemination of ideas. And that’s even more true of innovation than invention.
So if innovation comes about when people are working together, it’s worth considering what sort of organisational structures best foster innovation. How best do you arrange groups of people to get the most innovative results, and most efficiently? How do you create structures that can best incentivise many different people who might have entirely different personalities and motivations?
Organisational structures are critical to getting the right results: consider them the foundations upon which a company’s future ability to innovate will rest. If the foundations are faulty, or turn out to be ill-suited for challenges that arise down the line, then it’s a major effort to dig them up and rebuild them.
That was probably the key lesson to be taken from the recent organisational overhaul at Microsoft. In a long, turgid memo last month, chief executive Steve Ballmer announced a major restructuring of the software giant’s corporate organisation, “a far-reaching realignment of the company that will enable us to innovate with greater speed, efficiency and capability in a fast changing world”. Basically, Ballmer is shifting Microsoft from a divisional structure, where the likes of Windows, Office, XBox and Windows Phone are independent entities in competition with one another, to a functional one, where units are divided by purpose rather than product.
“We are rallying behind a single strategy as one company - not a collection of divisional strategies,” he wrote. “We will see our product line holistically, not as a set of islands. We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders.”
The problems Microsoft faces as the world moves swiftly to a post-PC computing environment are many and complex, but you can probably add “executive jargon delirium disorder” to the list - if Ballmer’s general leadership is remotely as platitudinous and insipid as his strategic vision, the Redmond giant is in serious trouble. Going forward, obviously.
The missive was brilliantly picked apart by the ever-astute Ben Thompson, a former Microsoft employee who is all too aware of the internal politics at the company. He points out that the differences between divisional and functional organisations are not just about how products are developed and how profits are calculated, but extend deep into the fabric of the company, affecting the types of people who work there, what incentivises employees to do great work, the dedication to the company at large, and so on.