Guest blog post, by Matthew Stibbe 

Everyone talks about innovation and admires innovative companies but what does it actually look like? We visited Microsoft Research Cambridge – a modern building in the heart of the ancient university city – to find out what businesses can learn from the way we innovate here at Microsoft.

The lab was originally set up in 1997 with just three researchers. It was Microsoft’s first such lab outside the USA. While it makes significant contributions to the company’s different products, for example coming up with magic that enables Kinect for Xbox to recognise people’s movements, its operating charter owes more to the academic world than the commercial one.

The business of research

The lab’s goals are to advance the state of the art in computer science, to transfer technology to Microsoft’s business and to lead Microsoft into the future. It sits firmly in the academic world, letting smart researchers and students explore topics including: machine learning, programming principles and tools and computer mediated living.

They are largely free from the obsessions of the academic world such as teaching or grant applications and the company protects them from having to deliver ‘products’ that are market ready. They collaborate with the rest of academia and publish freely.

A carefully orchestrated process bridges the gap between the lab and the business. The people who do this are often Microsoft’s most experienced and able leaders. For example, one was responsible for the first six versions of Microsoft Office before moving to Microsoft Research.

Managing geniuses

In a document called ‘Zen and the Art of Research Management’ two Microsoft Research veterans outlined their approach to creating an innovative environment. Several points are highly relevant to businesses as well as university labs:

John Naughton and Robert Taylor recommend that you only hire the very best people – one superb researcher is worth dozens of merely good ones. Microsoft labs are notoriously selective and with good reason. But ‘once you’ve got them trust them’. You can lead and inspire geniuses but you can’t manage them nor should you try.

They also have some more pragmatic suggestions, which have a symbolic as well as a practical meaning. They advocate keeping the organisation chart shallow and the organisation small. A world-class coffee machine is a must (and we sampled it on our visit to check!). Good chairs are important – most brain work is done sitting down. They also suggest you have a ‘toy budget’ to allow staff to make modest purchases on their own authority. No questions asked.

A portfolio approach

Microsoft views its research projects as a stock portfolio – there are some safe bets that respond to clear, tactical needs; some longer shots and some projects that are just ‘way out there’ with the potential for a huge pay off. They aren’t looking at the next generation of products, but the generation after next or even the one beyond that. This advanced search for disruptive technologies is characteristic of successful businesses. However small the scale, every business could learn something from this approach to innovation.