Imitate or Differentiate – Why You Need Both

Can established companies innovate successfully?

When I joined Microsoft in 1988, the company had a bit over 3,000 employees, and while it was beyond being a startup, it was far from a mature company.  By the time we began the Xbox project in 1999, Microsoft was a Fortune 10 Company with almost 40,000 employees in 70 countries and businesses that ranged from operating systems to mission-critical enterprise applications to mice and keyboards.

Microsoft was a complex ecosystem, and as Chief Xbox Officer (CXO) responsible for creating the Xbox business, I had to learn how to benefit from that ecosystem while avoiding the traps and challenges it created. I think of this as “intrapreneurship,” – the process of driving innovation within a larger company.

My new book Xbox Revisited: A Game Plan for Corporate and Civic Renewal tells the story of how our team of intrapreneurs were ultimately able to build a successful business in an entirely new area for the company.  Although the process was far from smooth or cheap – including significant organizational, financial, and product issues – the lessons learned in innovation along the way should be insightful for others who face a similar challenge.

The basic question is how can established companies innovate successfully, or said differently, how do you prevent a “big company startup” from being an oxymoron?  Here are some lessons from that Xbox experience…

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