Staying innovative after being left for dead

How do the giants of tech stay creative?

Behind Ralf Herbrich's desk is a row of wooden plaques - one for each of the patents he has won for Microsoft.

They seem like a lot - until you see a pyramid of marble cubes on the window sill for even more patents.

Those are awarded internally by Microsoft, as it takes a long time for the plaques to come from the US Patents Office. Among the patents awarded to this enthusiastic researcher from the former East Germany is one for "Bayesian modelling," which was used in a driving game for the XBox games console.

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Mr Herbrich, director of the Future Social Experiences Labs at Microsoft Research in Cambridge, England, is also behind the just-launched piece of software that allows users to filter news to their taste on the web, or on their mobiles.

"Project Emporia is a personalised news reader," Mr Herbrich says. "It filters from 250,000 news stories a day. It's your news by your votes."

In many fields, like social networking, the corporation has been left for dead. It is at places like these that it fights back.

The Microsoft Research facility in Cambridge is one of six that the US corporation has around the world, including ones in Cairo and Bangalore, where some of the world's smartest people are paid to sit around and come up ideas.

"Our role is to do basic research, which is to discover new things and create new technologies that can be turned into the Microsoft products that people buy and use," says Andrew Herbert, chairman of Microsoft Research in Europe.

'Fallen behind'

Discovering new things is at the heart of innovation, and that becomes harder and harder to do as companies become bigger. Bureaucracy starts to kick in as layers of management are formed and companies expand abroad.

Microsoft Research Microsoft's building in Cambridge has been responsible for many breakthroughs

Microsoft, for example, started in Albuquerque, New Mexico, in 1975. It is now worth $240bn (£150bn; 177bn euros).

But its shares have tumbled 8% in the past year after a series of missteps. Microsoft Vista, an update of its marquee operating system, was received very poorly and it has yet to make an impact in the smartphone and tablet space.

"We had fallen behind in the smartphone space as a company and there were a lot of people that ruled us out," says Charlie Kindel, who works with app developers for Microsoft's new Windows Phone 7 line-up.

Ironically, the behemoth that is Microsoft finds itself as a start-up in some areas outside the PC, fighting competitors like Apple and Google in phones, search and tablets.

The new Windows Phone 7 has also been well-reviewed, but it remains to be seen if it will be as successful as the iPhone or some of Google's Android models.

And there is no "iPad killer" yet.

So how do you keep innovation part of the DNA of a company?

Chief innovation officer

Peter Biddle, who was brought in from the start-up world to create an apps store for US chipmaker Intel, is certain about the wrong way of doing it.

"The first thing you don't do is start an office of innovation," he says. "We used to say, if you wind up with a chief innovation officer, you're dead."

Many companies, such as Taiwanese phonemaker HTC, have such positions. And Microsoft, it should be noted, has Craig Mundie, who is the chief research and strategy officer and reports directly to the CEO.

Nokia phone Finland's Nokia is also struggling to get ahead in the smartphone race

Nokia has also fallen behind in the smartphone space. But the Finnish firm is still the biggest phone maker in the world, with 1.3 billion people currently using its phones.

To keep the profits coming and restore its reputation for forward thinking, it turned to Marko Ahtisaari, another start-up founder, to be head of design across all its products.

Mr Ahtisaari was the CEO and co-founder of Dopplr, the online smart travel site, and was head of design at Blyk, which provides free mobile services to young people.

"In a start-up, you learn to become positively impatient," he says. "The key challenge is giving oxygen to creativity."

'Get on with it'

One universally-praised example of innovation at Microsoft is the Kinect, its system for the XBox that allows users to control the games with their own bodies.

The firm launched the Kinect for the Xbox 360 in November 2010 and said it has sold eight million of the devices in the run-up to Christmas.

Some of the technology was developed at its lab in Cambridge by researchers, including Jamie Shotton.

"The turnaround time has been really fantastic," he says, after working on the underlying technology for a "relatively short" number of years.

Andrew Herbert Andrew Herbert says the formula to creating innovation is very simple

He continues to focus on making human gestures the currency of interaction with computers, doing away with the keyboard and mouse forever.

Microsoft spends billions on this kind of research in the hope that some of these men and women will come up with an idea that will make billions more.

For Mr Herbert, who once ran his own start-up, the formula for innovation is quite straightforward.

"It's very simple," he says. "You get the smartest people you can, you give them great facilities and you let them get on with it."

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