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The new competitive advantage: not leaning in, but leaning forward

Microsoft recently announced a significant restructuring in hopes of reclaiming its lost market share and the trust of its customers. In response, many are asking, “Is restructuring the answer? What changes will Microsoft need to make to regain its competitive edge?”

The Lean Forward Approach

According to Steven Spear, Senior Lecturer at MIT Sloan and recognized expert on high velocity organizations, the most successful organizations are the ones creating high value with their products, in less time, using less effort. These organizations, says Spear, use the lean forward approach: they consistently seek immediate clarification and amplification of their customer’s voice by leaning into their users’ domain to discover the problems as well as delights of their experience.

Microsoft once had one of the best products on the market—Windows. But somewhere along the line, Microsoft stopped seeking real-time feedback from its users, focusing instead on releasing an increasingly complex Windows platform. At the same time, it was lagging behind in the competitive market for smartphones and tablets. In contrast, Apple continued to innovate by digging deep into the lives of its users, using this information to create products with a highly intuitive user experience and quick rate of adoption.

“Microsoft got so wrapped up in their Windows system,” says Spear, “that they forgot to check in with the marketplace on what was delighting and pleasing. They forgot to ask what user problems they are fundamentally trying to solve.”

A Page From Toyota’s Book

In 2003, both Toyota and Honda launched new cars geared toward the active, on-the-go youth market.

Honda’s Element centered around a design strategy it thought would fit an active lifestyle, including swinging barn-door style doors for ease in transporting sporting equipment and luggage. Honda moved the moon roof from the front to the rear in order to give drivers options to stand up and change clothes, for example, in an effort to meet the needs of an “active lifestyle.” Instead of appealing to a young market, however, the Element was more popular among older drivers who saw the design as well suited for antiquing, gardening, and home improvement. The youth market quickly identified the Element as not in touch with their generation. Within a couple years, Honda discontinued the Element due to its failure to reach its target market.

Toyota, on the other hand, “centered their innovation strategy for the Scion around the user experience,” says Spear. It sought to discover what was pleasing and displeasing to its target market.  “What they discovered was the nature of customization and its appeal to the youth market. They learned from their users—drivers who came to the dealerships and gave feedback. Toyota started setting up custom labs at dealerships according to this feedback, and in fact made modifications to the entire process to allow for greater customization.”

How can Microsoft learn from Toyota’s success? According to Spear, Microsoft needs to get back in touch with its users. It needs to lean more forward than it has been, and it needs to find out what its users need and want. Only then will it have the information it needs to drive a restructuring process around accelerated problem solving.

“No amount of restructuring will increase market share if they don’t strengthen the cornerstone of their business: their relationship with their customers.”

Steven Spear is a Senior Lecturer in the Creating High Velocity OrganizationsAdvanced Management Program (AMP)and Global Executive Academy courses at MIT Sloan Executive Education.

View a recording of Spear’s one-hour MIT Sloan Executive Education webinar, “High Velocity Organizations: How the World’s Best Organizations Learn their Way to Greatness”, or read his latest Huffington Post Blog contribution, “Don’t Be a Zombie Organization.”