Ballmer in Boston: Microsoft CEO on New England Startups, Competing with Apple, and the “New Normal” of IT

10/16/09Follow @wroush

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some growth, but on an employee base of 95,000, in the new normal you can expect to see [growth] in the small thousands of jobs created per year, as opposed to tens of thousands.”

Ballmer took a question from one audience member about his personal strategy for infusing innovation into the Microsoft culture. He said that it’s mainly a matter of communicating broad directions to the company’s top managers, and letting them do the rest. “You give them a cone in which to do innovative work, so they know where the runway is, but they have a lot of leeway,” he said. “You give them enough direction to be purposeful but not so much that people feel like you are trying to tell them what to build.”

Ballmer said the new Windows 7 operating system, which Microsoft is launching this month, emerged in this way. “We got a good team in place and I told them to study the issues with the current technology and take advantage of what’s available and possible, and build an OS, and comply with our consent decree.” (That last bit “is not meant to be funny in any way,” Ballmer said. Operating systems today, he said, are “essentially a regulated business.”)

If Microsoft has a challenge with innovation, Ballmer said, it’s that there is too much of it. “We used to have a fair where we shared best practices, and we stopped it because Microsoft people only like to create best practices; nobody likes to re-use anybody else’s. So we have the opposite problem compared to what you might see in other places.”

One questioner asked Ballmer why the company has chosen 2009 as the year to start opening Microsoft retail stores. With the demise of Circuit City, Ballmer noted that the two leading store-based retailers of consumer electronics are Best Buy and Apple. “It’s important for us to be part of the process of really connecting with the customer and showing them what you can do with the amazing things in a Windows phone or a PC,” he said. The company will open a few stores at a time and study their performance rather than opening a huge chain of locations right away, Ballmer said. At Microsoft, “we do something, learn, and then do it again and again and again and again and again,” Ballmer said. “Hopefully over time that leads to success.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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