A Story Of Stellar Product Development

Now when you read a title like that, these days you don't normally think of Microsoft. With a recent string of high-profile product missteps (including the recently disclosed Excel computation flaw) and less-than-stellar quality control practices, the common consensus is that Redmond has lost its touch, that even when the products work, Microsoft is a follower -- rather than a leader -- in the markets it services.

However, earlier this week, a Microsoft release garnered some of the same type of consumer mania that accompanied the release of rival Apple's iPhone a few months back (i.e., news coverage of young people with frankly too much time and money on their hands standing in line for days).

The product they were awaiting is Halo 3, the latest chapter in Microsoft's revolutionary and wildly popular multiplayer videogame franchise. Just to put this product in a business perspective, Halo 2 set a record for first-day sales in entertainment by bringing in more than $125 million in the U.S. in its first 24 hours. Halo 3 sold 1.8 million units in 8 hours time, and it's no exaggeration to say that expectations for this title are off the charts.

The game is also helping move units of the embattled Xbox 360 game console -- incredible numbers that analysts say could reach half a million in the first weeks post-release.

So how'd they do it? Where'd slow and steady Microsoft get the buzz-making chops to drop a product that's got people lined up around the block again?

Tech blogger Robert Scoble, himself an ex-MSFT employee, explains that the development team from Bungie who have produced these stellar products (not to mention profits) are in many crucial respects insulated from the enterprise hierarchy and "institutional knowledge":

What did they do right?

1. They stayed away from Microsoft’s politics. They work in a small ex-hardware store in Kirkland, Washington, USA. About 10 miles from the main campus.
2. They kept their own identity. They have their own security. No Microsoft signs outside. A very different feel internally (much more akin to Facebook than how the Office team works together). Each team works in open seating, focused around little pods where everyone can see everyone else and work with them.
3. They put their artists and designers front and center and obviously listen to them. The Windows team, however, fights with their artists and designers.
4. They keep the story up front and center. They work across the group to make sure they deliver that story everywhere.
5. The product thrills almost on every level. Hey, sounds like an iPhone!

He goes on to say that the the problem is that "Bungie is a small exception in a sea of Microsoft."

Microsoft as a whole could definitely learn a thing or two from the Bungie group, and maybe you could as well. Think about it -- even though you might not have the budgets or buzz of a tech giant like Microsoft or Apple, you probably have some employees with creativity and new ideas -- and no room to run with them. The trick is, can you empower them without losing too much control of people and process?

As my dad says, you'll never know until you try. Although it probably won't make you $125 million in 24 hours, you might find that this sort of cross-functional team working on product development -- or, just as importantly, continuous improvement -- in a less formal setting and freed from organizational hierarchy and politics, might come up with two cents that could make you (or at least save you) a pretty penny.