I have been meaning to write about development and cancellation of Courier, an innovative tablet concept from Microsoft. The c|net article on the subject provides quite a bit of useful information – both about innovation management best practices and some opportunities for improvement. Courier was developed at Microsoft’s Skunkworks (Pioneer Studios). They invested quite a bit of resources in the concept (130 employees and $25M in funding). The concept was very well received (See Courier: First Details of Microsoft’s Secret Tablet in Gizmodo):
It feels like the whole world is holding its breath for the Apple tablet. But maybe we’ve all been dreaming about the wrong device. This is Courier, Microsoft’s astonishing take on the tablet.
However, they had to cancel the product because it did not fit into Microsoft’s product portfolio (See Microsoft confirms, kills Courier in one fell swoop — Engadget):
Well this is depressing. Word has just gone fluttering out of Redmond that work on the Courier project — a heretofore rumored dual-screen tablet which rightfully set the tech world ablaze — has been spun down by the company.
It is unclear which, if any, technologies developed as part of the innovation project ever got transitioned into the rest of the portfolio. The cancellation led to significant organizational strife and hard feelings. I think R&D managers can learn a lot from this event.
Courier’s death also offers a detailed look into Microsoft’s Darwinian approach to product development and the balancing act between protecting its old product franchises and creating new ones. The company, with 90,000 employees, has plenty of brilliant minds that can come up with revolutionary approaches to computing. But sometimes, their creativity is stalled by process, subsumed in other products, or even sacrificed to protect the company’s Windows and Office empires.
So lets dig in…
As we have discussed in the past (here and here), Microsoft’s portfolio process seems to be driven by senior executive champions. In case of tablets, there were two competing groups led by two senior executives working on competing products.
One group, led by Xbox godfather J Allard, was pushing for a sleek, two-screen tablet called the Courier that users controlled with their finger or a pen. But it had a problem: It was running a modified version of Windows.
That ran headlong into the vision of tablet computing laid out by Steven Sinofsky, the head of Microsoft’s Windows division. Sinofsky was wary of any product–let alone one from inside Microsoft’s walls–that threatened the foundation of Microsoft’s flagship operating system. But Sinofsky’s tablet-friendly version of Windows was more than two years away.
The senior executive ownership has some benefits: They get to ensure the product received the right kind of focus and resources to get it to market. The approach may help overcome the valley of death in innovation maturation. However, it also a key disadvantage: disconnected and conflicting projects in the R&D portfolio:
The Courier group wasn’t interested in replicating Windows on a tablet. The team wanted to create a new approach to computing.
The two lines of R&D were somewhat incompatible and underlying culture of executive champions prevented integrated portfolio management. Microsoft’s CEO, Steve Ballmer, had to call in Bill Gates to determine the path forward. Gates did a product review and did not come out in favor of the new innovation (because of how far it was from the traditional Windows/Office business model):
“This is where Bill had an allergic reaction,” said one Courier worker who talked with an attendee of the meeting. As is his style in product reviews, Gates pressed Allard, challenging the logic of the approach.
Within a few weeks, Courier was cancelled because the product didn’t clearly align with the company’s Windows and Office franchises, according to sources.
The cancellation had a significant immediate impact on Microsoft’s business:
Rather than creating a touch computing device that might well have launched within a few months of Apple’s iPad, which debuted in April 2010, Microsoft management chose a strategy that’s forcing it to come from behind. The company cancelled Courier within a few weeks of the iPad’s launch.
Furthermore, the move away from innovation had a long-term impact on the product development cycle and the product portfolio at Microsoft:
But using Windows as the operating system for tablets also implies that Microsoft will update the devices’ operating systems on the Windows time frame, typically every three years. Compare that to Apple, which seems likely to continue to update the iPad annually, a tactic that drives a raft of new sales each time a new generation hits the market. By the time Windows 8 rolls out, Apple will likely have introduced its iPad 3. Moreover, Amazon’s much anticipated Kindle Fire tablet, which goes on sale November 15, will have nearly a year head start on the Windows-powered tablet offerings.
So what if anything could have been done differently and what can we learn from this? First, many companies try to overcome the bureaucracy of a large organization by creating skunkworks (See Nokia). The idea was similar at Microsoft:
The gadget was the creation of Allard’s skunkworks design operation Pioneer Studios and Alchemie Ventures, a research lab that also reported to Allard. (The lab took the German spelling of “alchemy” to highlight the stereotypical Teutonic traits of structure and regiment it hoped to bring to its innovation process.)
However, Skunkworks like environments are hard to integrate into the overall culture. They tend to become quite segregated causing many of the innovations wither on the vine:
Allard created a fantasyland inside Microsoft where Apple fanboys could tinker on stylish products that would never see the light of day. They point to the opulent 36,000-square foot office of Pioneer Studios, headquartered in Seattle’s Pioneer Square, that featured huge open spaces, dotted with cushy Eames lounge chairs, angular white desks, blond wood floors, and exposed brick walls. It may have been 16 miles from Microsoft’s far more corporate Redmond, Wash., campus, but it was a galaxy away in terms of workplace design.
Clearly, Pioneer studios had envisaged this scenario and tried to form project networks that brought innovation cultures to the rest of the company:
He encouraged employees to seek out new colleagues with diverse backgrounds who could challenge Microsoft’s conventions and push the company to approach new opportunities in different ways.
Microsoft made an effort to implement a structured innovation management process:
Allard created Alchemie to focus on innovation process to make sure that the efforts of Pioneer were not scattershot. It studied best practices, both within and outside Microsoft, to “design a repeatable, predictable and measurable approach for building new business”
Additionally, they integrated some cutting-edge innovation management practices such as clear timeline for technology insertion and a stage gate process to ensure the innovation projects do not spin to far from reality:
In fact, one of the mandates of Alchemie was to look only at product ideas and business concepts that were no farther than three years into the future. The Alchemie book includes something of an innovation process road map that lays out four “gates” that ideas needed to pass through to move from incubation to product development. And a source said that Courier had made it through all four gates.
Another interesting concept they implemented was clearly defined purpose and freedom to explore new solutions:
“Infuse them with our purpose,” Allard wrote. “Give them the tools. Give them lots of rope. Learn from them. Support where they take you. Invite them to redefine The Tribe.”
The Courier team also had a well defined mission – Free Create – that further focus development:
The phrase at the core of the Courier mission was “Free Create.” It was meant to describe the notion of eliminating the processes and protocols that productivity software often imposes on workers.
The idea of Free Create was imbued into the entire development process – which is a great idea. Not sure of the business case for traveling to Milan to understand Moleskine…
The metaphor they used was “digital Moleskine,” a nod to the leather-bound notebooks favored in the design world. In fact, according to a few team members, a small group led by Petschnigg flew to Milan, Italy, to pick the brains of the designers at Moleskine to understand how they’ve been able to create such loyal customers.
One more interesting concept about Innovation Management was implemented: Disconnected prototypes allowing different subsystems to mature separately. This approach is advantageous in that it allows more experimentation and we have seen that experiments boost productivity. Steve Jobs followed a similar approach when developing the iPhone.
When Courier died, there was not a single prototype that contained all of the attributes of the vision: the industrial design, the screen performance, the software experience, the correct weight, and the battery life. Those existed individually, created in parallel to keep the development process moving quickly. Those prototypes wouldn’t have come together into a single unit until very late in the development process, perhaps weeks before manufacturing, which is common for cutting-edge consumer electronics design. But on the team, there was little doubt that they were moving quickly toward that final prototype.
It appears that the Courier team made significant progress (and used significant resources along the way):
Courier was much more than a clever vision. The team, which had more than 130 Microsoft employees contributing to it, had created several prototypes that gave a clear sense about the type of experience users would get.
It’s clear there were substantial resources behind the effort. The commemorative book, designed to resemble the journal-like look of the Courier, lists the 134 employees who contributed to the gadget’s creation. Moreover, Petschnigg writes on his LinkedIn profile page that he “managed $3.5 (million) seed funding, (and) secured $20 (million) to develop this new product category.”
However, there was a clear lack of coordination at the product portfolio level and there were no processes to align development plans across different product lines or R&D projects:
Early on, the group opted to use Windows for Courier’s operating system. But it wasn’t a version of Windows that any consumer would recognize. The Courier team tweaked the operating system to make sure it could perform at high levels with touch- and pen-based computing. What’s more, the graphical shell of Windows–the interface that computer users associate with the operating system–was entirely removed. So while it was Windows under the hood, the home screens bore zero resemblance to the familiar PC desktop.
This is a key problem with the Skunkworks innovation concept. A separate culture quickly becomes insular and product lines divergences can not be reconciled:
“A big lesson is that it may be easier to go into your quiet space and incubate. But when you want to get bigger and get more resources, you want to make sure you’re aligned,” a Courier team member said. “If you get Sinofsky on board from the start, you’re probably going to market.”
So the challenge again appears to be with Microsoft’s R&D planning and portfolio management process. It is relatively easy to become innovative (may be not $25M, but at least to some level), however, it is not easy to align product portfolios to bring innovation to market:
For Courier to come to life, the team creating it would have to convince the Microsoft brass that the device would offer the company substantial opportunities that Windows 8 could not. In the end, that proved to be too large a hurdle for J Allard, Courier’s leader and Microsoft’s chief consumer technology visionary.
One way to address this challenge is to have more detailed R&D plans that can be shared and linked across different product lines. These plans could have allowed teams to decide how they can bring different development paths together over time without an outright cancellation of Courier. Well communicated plans and roadmaps could have facilitated collaboration between Courier and Windows 8 teams. This collaboration could have ensured that more of the technologies developed under courier could have been integrated into Windows 8. This unfortunately did not happen.
It’s unclear what, if any, pieces of the Courier technology are finding their way into other Microsoft products.
The only way any new innovation got introduced to Microsoft was through unmanaged diffusion:
Courier team members scattered. Many moved on to other products at Microsoft, such as Xbox, Windows Phone, and Bing.Others are involved with different incubation efforts at the company.
A final lesson could be better portfolio management processes such as more frequent portfolio reviews where executives could have either reconciled development plans or eliminated the project before significant resources and emotions were invested:
And a few employees who contributed to the product’s development have left the company altogether, joining other tech firms such as Amazon, Zynga, and Facebook.