Microsoft’s Bottom-Up, Top-Down Approach to Change Its Siloed Culture

T. Banting

Summary Bullets:

  • Microsoft Garage provides a hub for employees to work on different small-scale, innovative projects and share ideas.
  • By driving cultural change and encouraging developers to innovate, Satya Nadella is breaking down the “confederation of fiefdoms” which has plagued Microsoft for years.

Late last week, Microsoft released a new Microsoft Garage-incubated iOS app called ‘Spend,’ an automatic expense tracking app. The Garage, a relatively unknown function within Microsoft, is a hub for employees across the company to work on different small-scale projects and share ideas.

This May, Microsoft opened the seventh Microsoft Garage facility at the New England Research & Development (NERD) Center in Cambridge, Mass., which serves as a further example of the change in company culture that Microsoft’s CEO, Satya Nadella, has worked so hard to drive. Nadella frequently talks about lifelong learning becoming a priority at Microsoft – specifically with the goal of meeting the unmet and often unarticulated needs of customers. Garage is certainly one way the company leverages and encourages its in-house talent to create problem-solving solutions to common business problems.

Microsoft’s annual hackathon also provides further evidence that Microsoft has changed its ethos toward the value of experimentation and hacking. Week-long hackathons allow Microsoft employees across the world to collaborate on their ideas, with the best handpicked by Garage leaders and winning teams meeting with HQ’s senior leadership team to potentially take their project to market. Apps in Microsoft Garage’s Wall of Fame include: FindTime, an Outlook add-in that creates a meeting poll to enable people inside and outside an organization to select meeting times which work for everyone; Health Bot Service, an AI-powered bot which provides intelligent, personalized, conversational access to health information; and Kaizala, a WhatsApp-like group communications and work management app for first-line workers (i.e. employees that are the first in line to engage with customers).

While the apps are noteworthy developments, the approach Garage and hackathon engineers take is of more significance as teams spend substantial amounts of time talking with customers in a concerted effort to get to the root of customer needs; indeed, such an approach in driving bottom-up ideas and fixing broken business processes may have influenced the company’s recent thinking and development in Microsoft Teams. At Microsoft Ignite 2018, the company announced that Teams will be customized for industry-specific vertical segments and role-based workflows. Home is a new mobile application that allows first-line workers to clock in and out of shifts and breaks, receive important notes, and review schedules; Shifts allows team managers to create, update, and distribute schedules for workers.

In his book, Hit Refresh, Nadella acknowledges that “innovation and competition don’t respect our silos.” By making cultural change a high priority and encouraging developers to innovate, Satya Nadella is breaking down the “confederation of fiefdoms” which has plagued innovation within Microsoft for many years. The ability to bring solutions like Kaisala and Spend to market shows that Microsoft is very capable of organic innovation and the rapid commercialization of ideas; consequently, this considerably improves Microsoft’s competitive differentiation.

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