Microsoft is listening

Microsoft is starting to move beyond product-centricity and learn more about its customers. This article in inc.com describes the company's foray into the minds of small business owners:

Many companies talk about getting close to the customer, but Microsoft pushed this idea to the extreme when it hired Nelle Steele to show up at 5 in the morning at the Milwaukee home of Tim Tucker. The owner of Air Engineering Inc., a supplier of industrial air compressor parts, is Microsoft's model customer. Steele's mission was to observe Tucker at close range, arriving as soon as he stepped out of the shower, then shadowing him until his workday ended at 10:30 p.m. Steele, a cultural anthropology Ph.D. student on leave from the University of Wisconsin, is one of five anthropologist-ethnographers (and the only one focused on entrepreneurs) that Microsoft hired full-time to conduct a field study. Called "Dawn to Dusk," the study documents the work habits and thought processes of a species the software behemoth had never before tried to understand: owners and employees of small businesses.

In tailing her quarry, Steele discovered, to her surprise, that small companies kept vital information in disconnected places -- what she called "data silos" -- from scribbled notes on scraps of paper to files on a PC that could be accessed by only one employee. This made it harrowing to try to answer basic questions like, "How did we do in the Northeast last quarter?" "I saw the pain that data silos caused day to day," says Steele.

Her work is part of Microsoft's $2 billion research and development effort aimed at convincing these tribes of technological primitives to join the modern world. While most of that is earmarked to improve products, a lot of it is going to spreading the word. That's in addition to two recent acquisitions -- Great Plains and Navision business management software at another $2.4 billion -- to enhance its offerings for small business. Even for Microsoft, with $50 billion in cash in the bank, that's a major investment. Microsoft has started trying to care about these customers.

Comments

[jennifer rice]

Well, considering I'm in the customer research arena, I would have posted this regardless of what company was featured. I'm thrilled that a technology company (especially one that's notorious for NOT being customer-focused) is in the news for making an effort to understand their customers. And I agree that the important issue is, what are they going to do with the data? If it's going to be used for a slick ad campaign, they'll get 2 thumbs down. If they use it to improve and customize their small business offerings, great. We'll see what happens.

[Felix]

Hmm. First of all, that Microsoft hired a "con-sultant" to follow some guy around only to discover that many people have disparate sources of data hardly means that Microsoft is "listening". The data silo concept is an old one, and Microsoft hasn't done much about it.

Second, a week ago you wrote (http://brand.blogs.com/mantra/2004/06/update.html) that you had a new gig with Microsoft. And now you're posting complimentary fluff pieces about - Microsoft.

You can do better.

[David Foster]

"discovered, to her surprise, that small companies kept vital information in disconnected places -- what she called "data silos" -- from scribbled notes on scraps of paper to files on a PC"....Was this really a surprise? I don't think there's a single corporation or government agency of which this couldn't be said.

[jennifer rice]

Steve, thanks for the comment. MS has historically been a product- and distribution-centric company. Despite the reorg in 1999 around customer segments, I personally haven't seen a lot of evidence that they've gotten more customer-centric... which is why this article surprised and delighted me. In this month's FastCompany, they score low on the "lovemark" rating scale. And you're right, the fact that it makes such big news simply reinforces that the vast majority of companies don't really take the time to get this deep into customers' lives.

[Steve Portigal]

Why do you say that Microsoft is "starting" to learn more about its customers? Is there something in the article that I missed - some in-depth history of their adoption of ethnographic methods?

In my experience as a consultant doing this sort of work, companies like Microsoft have been involved on a small scale for quite a few years. Sure, they aren't like Intel who makes enormous PR hay (as well they should) from the work of their excellent People and Practices Group - but Microsoft is working hard - from what I can see from the outside - to staff the company with this sort of talent and to engage the customer up-front in the development process.

In fact, I think if you look at most major companies, they are doing some of this. I think, like Microsoft, they aren't doing enough - they aren't driving all that much of their effort with this type of research, but it's there, it's in the culture, it's being adopted, and there continues to be more hunger (internally for it).

And of course, it makes great press, because it's always a "wacky" store - you went INTO THEIR OFFICE! INTO THEIR HOMES! And watched them do it?! Wow!

Which I'm certainly not averse to...