Why is Microsoft giving all that money back? Shareholders are about to receive a gift in the order of $32 billionroughly half of Microsofts cash holdings. I am a modest shareholder in Microsoft. I would rather they invested this money in research and development, to create, in other words, still more value in which I can share.
Now, there are probably lots of really good reasons, scrutable only by the likes of the kids I used to teach at the Harvard Business School. But I wonder if the pay out might also be a symptom of trouble at Microsoft.
At a conference this year, a well placed source spoke to me privately, and a little bitterly, about “monetizing at Microsoft. S/he said, that at Microsoft, they interrogate new ideas hard. Will they pay? How much will they pay? How soon will they pay? Or should we just kill it now? Put it out of our misery. That kind of thing.
We now have volumes on how creativity and innovation happen from the likes of Robert Sutton, Rosabeth Moss Kantner, Clayton Christensen, Eric Von Hippel, Andrew Hardagon, and Henry Chesbrough. No one on this list recommends playing the school yard bully. Ideas like to keep their lunch money. They dont like being pushed around. Eventually, they will avoid you on the playground. And that where are you then? Friendless and idea free. Hmm, could this be the Microsoft we know?
Google has another idea, apparently. Employees get a day a week in which to pursue their own innovations. They call this the “20% rule. You work on what you want once a week.
This is a nice variation on the “skunkworks notion, the one that says innovation sometimes happens most surely when you take a team of people and stick them in a corner by themselves. Skunk works liberate people from the “death by committee conservatism of the corporation. The trouble with skunkworks is that the corporation loses the services of the skunkworker. Both in the short term and the long. How are you going to get someone back in the corporate box once they have tasted the real intellectual freedoms and engagement of real creativity?
The 20% rule says you can keep people inside even as you let them outside. Now, when stuck in interminable committee work, they resort to dreaming about their project instead of buzz work bingo. More than that, you give them the chance to go places the corporation cant imagine. Still more than that, you take them seriously as idea producers, whatever else they do for you. Most of all, you pay them in intrinsic satisfaction, which, as we all know, is a much higher grade of value than a fat pay check and a fast car (especially once you have the fat pay check and the fast car).
I have an idea. Microsoft should keep that $32 billion and use it to buy everyone in the corporation a day a week of real creativity. This shareholder would be well satisfied.
Linn, Allison. 2004. Microsoft to pay out $32 billion. AZCentral. November 10, 2004. here
Row, Heath. 2004. Google, Innovation and the Web, the SxSW presentation by Marissa Mayer, Director of Consumer Web Products at Google. here