Image thanks to Seth
I read an interesting article today written by a former Microsoft senior leader describing some of the challenges he observed while at Microsoft and that appear to still exist today.
Microsoft, without doubt is one of the great success stories of the last 25 years, they have a ubiquitous platform and have attracted some incredibly talented and hard working employees. It seems strange then, almost paradoxical, that it has not been able to really innovate since its early days.
Dick explains in his article that Microsoft struggles from significant internal competition that simply slows it down and kills internal innovation.
Ultimately this is a cultural issue, they simply are no longer as market-driven as they once were. The heads of existing businesses simply kill off any internal threats that arise by pulling funding or refusing to support them. Dick sites the example of ClearType a new font that would allow users to more clearly read text on screen and the fact it was not supported by much of the internal leaders despite its clear customer value. The result was it took 10 years to finally get to market…..
If companies like Microsoft want to compete in the future they are going to have to change this culture to allow internal innovation to flourish. Buying small innovative companies won’t work as they will ultimately get eaten up by the Microsoft culture. As we have seen with Apple you can’t buy innovation you need to create the environment for it to happen.
Microsoft its time to become market-driven again!
MarketCulture Blog - Using a Customer Culture for Competitive Advantage 
“Buying small innovative companies won’t work as they will ultimately get eaten up by the Microsoft culture.” Good point. I wonder how long it takes for an acquired company’s culture to be ‘eaten’? From the literature we know that it generally takes 18 months to see the effects of culture transformation from change management. However, I imagine the process can occur much more quickly when existing cultures are merged. How quickly would largely be a product of how autonomously the acquired firm is allowed to operate after the merge. Regardless, acquisitions would only serve as very short-term sources of innovation for Microsoft.