The answer is easy: they documented their acquisition successes and failures along with best practices and mistakes from other companies and now use that as one of the valuable acquisition guidebooks in the industry. In short, at least for now and with regard to acquisitions, they not only dont make the same mistake twice, they avoid repeating the mistakes that others have made. Their top and bottom lines reflect this success.
This reminds me of something my Grandfather, an ex-Petro Chemical CEO used to say, Learn from others and never make the same mistake twice.
Google and MicrosoftWhat seems amazing to me given the timing is not only does Microsoft repeat mistakes but Google appears to take this list of mistakes as some kind of twisted to-do list. Google not only doesnt avoid them they seem to want to excel at them. Of course, both companies are made up of folks who are thought to be very smart. (By the way, it appears that Facebook is following in this tradition given their recent mistake getting caught driving negative stories on Google.)
Windows 95 was hurt because the product wasnt adequately tested in its final version when shipped, which hurt Windows Home Server and a number of browsers. Windows Vista was killed because it wasnt complete when shipped, which also hurt Origami and critically hurt Windows Phone 7. If you wander over to Google, notice that Buzz, Wave, and most recently Android Honeycomb were either inadequately tested or incomplete when shipped; often both. And Google clearly hasnt learned from Microsoft anti-trust government run-ins because the company seems to be going out of its way to piss off both domestic and foreign governments.
The thing is, the behavior isnt really that uncommon -- it is simply more visible in firms that have high visibility like Google and Microsoft.
Why This HappensMy working theory on why this happens is the combination of poor mentoring, a lack of documentation on past and/or competitive practices, and lots of job movement. You see at some big firms there is a lot of competition for jobs and people have a nasty habit of seeing folks they should be mentoring as rivals and so they dont mentor. In addition, folks tend to get moved after a big mistake (often out of the company) so the lesson tends to move with them. The next group that comes in, often operating from similar information in a similar environment, makes a similar mistake.
And finally we know programmers dont like to document their code, why would you think folks would want to document their experiences? And even if they did, with all of the job changes, the folks coming in likely wouldnt know that this documentation exists.
Now not all companies are like this. Apple is almost a cookie cutter when it comes to how they develop, present and market products. It has clearly has gone from industry joke to industry champion in about a decade as a result. Dell is doing the same thing recently with acquisitions. But is there any light at the end of Google and Microsofts tunnel? Maybe.
Microsoft is ImprovingWhile a lot of folks are hoping for improvement in Google I am seeing some improvement in Microsoft. I met with Kathleen Hall, the head of Windows Advertising, (one of the few people who have taken on Apple and won) a few months ago and they have started to document what is working, what has worked, and what hasnt so they can build on things that work and not repeat mistakes.
Windows 7 has a vastly better reputation. And even though tablets are clearly cutting into the market, it largely reversed the gains that the MacOS had made during the troubled Vista years. The Windows Marketing appears to be doing most of the major lifting involved in improving the perceptions that surround Microsoft as a result. This is one data point but if it continues to show positive trends Microsoft could adopt this behavior more broadly and it would be vastly improved as a result.
Wrapping Up: Definition of InsanityA lot of folks building around the Android platform have told me they hope and literally pray that Google will start making positive moves to avoid repeating mistakes before litigation wipes out the Android eco-system. But the real point of this piece isnt Google, Microsoft, Dell or even Apple, it is the practice of learning from mistakes, including the mistakes of others, so you dont repeat them and become the next Palm, Netscape, or Zune.
This brings up story I just heard the other day. Evidently back when the iPod was young there was massive pressure to respond better to it. And Microsofts platform response, Plays for Sure, wasnt working out.
Steve Ballmer argued they needed a zippity and the Zune was created over objections that instead of hitting Apple where it was entrenched, Microsoft should develop something that could replace the iPod, like a media phone. Instead, the iPhone beat the Windows Phone 7 to market by years and should have been what Microsoft brought to market rather than the Zune. Then, while Microsoft worked on the phone, Apple again beat them to market with the iPad, which is now displacing Windows PCs.
Einstein once said that The definition of insanity is doing the same thing over and over again and expecting different results. This is how most people run their companies. Im suggesting there are better paths and hoping more managers will choose to follow them.