Microsoft’s Kinect and the Invisible Handshake @ Harvard Business Review…

When the news came out that hackers had jumped on the opportunity to tinker with Microsoft’s new Kinect game controller — making it do “things it really wasn’t meant to do,” in the words of a New York Times reporter — most of the coverage was very inside-baseball. Some stories claimed that the hackers’ activity was a source of great consternation to Microsoft. Others quoted company officials claiming Microsoft had deliberately “left a back door open” to allow for such user creativity.

We don’t think it matters much whether this was true or just spin-control; what matters is that Microsoft has now publicly embraced the hackers — and that’s an instance of a broad and profound change in corporate innovation. Once wholly in the hands of managers (the “visible hands” chronicled by industrial age historian Alfred Chandler), technology innovation used to begin with a company’s commitment of resources to R&D and patent protection. If and when the technology succeeded, that company stood to reap the rewards through the differentiation in its products, and often also by licensing the new intellectual property.