There are multiple ways for a tech business to innovate. Some companies innovate through rapid expanding product lines, whereas other companies find success by focusing their efforts.
Tech Giants: Innovation through Growth
Microsoft Corporation recently named Satya Nadella as the third CEO in its nearly 40 year history.
Nadella is a 22-year Microsoft veteran who says innovation will be a key priority for the future success the company.
“While we have seen great success, we are hungry to do more,” Nadella wrote in an email to employees. “Our industry does not respect tradition — it only respects innovation.”
Nadella follows Steve Ballmer, who stepped down as CEO in August. Many analysts have criticized Nadella’s appointment as a “safe pick” and speculate that he will be a leader who is more likely to “tweak” Microsoft’s business model rather than totally revamp it.
Microsoft’s new CEO previously served as the company’s Executive Vice President of its Cloud and Enterprise group. He is likely to expand Microsoft’s cloud-based services in an effort to decrease its reliance on Windows and Microsoft Office software.
“You have to be able to deal with scale in meaningful ways and in smart ways,” Nadella said in a recent video appearance. “If you deal with scale where you stop innovating, then that’s death.”
Nadella’s appointment comes at a time when other tech giants such as Yahoo and Google are expanding their service offerings and venturing into new industries. Earlier this month, Google bought Nest, a home hardware tech company, for $3.2 billion.
37Signals: Cutting the Fat
Not all tech companies are expanding however. Software company 37Signals recently announced that it was dropping its suite of products to focus solely on Basecamp, an online project-management tool. The company is also changing its name to Basecamp to underscore this move.
“Because we’ve released so many products over the years, we’ve become a bit scattered, a bit diluted,” the company announced in a statement. “Nobody does their best work when they’re spread too thin. We certainly don’t. We do our best work when we’re all focused on one thing.”
Jason Fried, the founder of 37Signals, recently told Inc. Magazine that growing larger was at odds with the culture of his company.
“We take being a small company very seriously,” Fried said. “We absolutely love it. We think small companies have advantages that large companies simply cannot have.”
Fried cites a small company culture and “knowing everyone’s name” as a primary driver of 37Signals’ high employee satisfaction and retention rates – rare things in the tech world. The company also says that focusing on just one product will also help it drive innovation and increase the quality of its products.
“Once you have a few products, you might have 15 or 20 different code bases you have to deal with,” Fried said. “So focusing just on Basecamp allows us to minimize all that complexity and have fewer things to work on. Fewer things means higher quality on those things.”
Dennis Jansen is Upsize Minnesota’s digital editor. Follow him at @DennisJansen.