How do you give a new innovative group that's rooted in Chinese culture and traditions, a unique management and culture? Dr Ya-Qin Zhang, Microsoft corporate vice-president and China R&D Group (CRD) chairman explains the Group's unique management and culture through five formulas and principles.

1. IT = IQ (talent) + IP (intellectual properties)
We aim to attract and train first-class talent, helping them to fully harness their intellect and unique gifts. We encourage our talent to innovate and the results of their innovation - their intellectual property - can be safely protected here. The competitive advantage of an IT enterprise is reflected by its "intelligence resources" rather than "material resources", which can represent the value of IQ. Therefore, the talents' intellect plays a vital role in IT enterprises.

Intellectual property, which makes up the technical core of the company, is another driving force that makes IT enterprises successful. For software enterprises, the intellectual property of source code, patent, know-how and flow can support the existence and development of IT enterprises.

The formula IT=IQ+IP demonstrates CRD's efforts in two ways. Firstly, we have a complete development program here and we create an environment that helps employees to develop their skill sets. Secondly, we create opportunities for employees to participate in the research and development of core technologies and products, which encourages our employees' interests because they can see the results of their work.

2. E=MC²
Our plan is to attract talented individuals (M) with great potential, and create a process (C2) to fully unearth their potential. Our progressive management methods and corporate culture have been proven to develop individuals and teams. Therefore, the energy (E) of CRD can be fully utilized.

Through the years, we have developed a pyramid-shaped talent structure. The number of employees who stand on the top of pyramid account for 20% of the total. The majority of them have rich experience in developing technology and product innovation at Microsoft headquarters or at other MNCs. With their wealth of experience and international reputation, they can help new staff quickly become "masters" in developing quality software.

We have set up a "360-degree training strategy" and have spared no effort to provide great resources to help every employee optimally develop his or her potential. We are currently providing more than 100 training programs covering all R&D fields. To raise the efficiency of projects and the quality of our products, we have introduced the Engineering Excellence Group to improve engineers' practical techniques. We are currently setting up a Career Stage Profile for every position to help each employee design his or her own career development direction. In addition, we have also set up a "mentorship" policy so that each employee can be paired with a senior employee in order to help with their development. Thirdly, we provide the proper space, environment and necessary incentives to allow our employees to grow.

3. ·≥α
We encourage innovation and forgive failure.

We have integrated Heisenberg's "uncertainty principle" into our management and culture. ?V and ?P represent the risk and the accuracy of groups' projects, respectively. The result of ?V multiplying ?P is the development speed of departments or teams.

When determining development goals or assessing research projects, our teams will find the best balance between development speed and risk, according to the characteristics of the particular business group. For instance, in the research institution, we "encourage innovation and forgive failure". When selecting projects, we urge employees to develop difficult and risky projects, which can produce great profits for company and customers. In terms of the incubation of technology and products, we encourage them to pay attention to increasing project accuracy and reducing risk. With regard to teams that specialize in product development, the priority will be given to the projects with high accuracy. Of course, we need to comply with some basic principles when we decide the development direction of teams or assess projects of technologies and products. We must ensure projects are practical, first-class and relevant to the mainstream direction.

We hope our teams can develop under the philosophy of "making innovation and breaking through outdated rules" in order to showcase Chinese innovation to the world.

4. 1+1≥3
With regardsto our organization's internal and external partnerships; under the premise of 1+1≥3 cooperation is valuable and necessary.

CRD is comprised of a multi-national group of Chinese elites who are educated in Chinese universities or overseas, as well as foreign professionals. When completing new projects, we work with Microsoft employees all over the world, cultivating a special environment for cooperation within the group. We emphasize to our employees the need to learn from China and other countries and to move beyond our weaknesses and work with our strengths.

With the establishment of the CRD all of Microsoft's R&D resources in China have begun to integrate. In the future, integration and collaboration among Microsoft's functional departments will become even stronger. Based on this trend, "1+1≥3" will become a necessary principle of cooperation. Therefore, we encourage the "win-win" concept (for all cooperative sides including customers and the industry).

5. E -> inf (the second law of thermodynamics)
We will do all we can to create an open and win-win IT industry ecosystem, and cooperate with academia and industry partners for further innovation and sharing of resources, experience and results.

The second law of thermodynamics states that as time proceeds and the condition in a closed system develops toward disorder, entropy increasingly grows, and regular and available energy will become infinitesimal. Finally, it ends in a chaos where entropy disappears.

IT enterprises also follow the second law of thermodynamics. Currently, as technologies are globally shared, anything that obstructs this kind of sharing will result in that enterprise or institution failing to identify the upcoming challenges or crises. CRD has always been an advocate for an open IT industry ecosystem because it helps our developers keep up to date with latest innovations in their fields, which in turn helps to broaden their scope, deepen their knowledge and increase their growth. Our institutions will actively cooperate with IT enterprises in China, other countries in the Asia Pacific region and across the world. Together we will help to advance innovation, share resources, experiences and results.

Win-win cooperation is one of our important development strategies. We have established a strategic partnership group to further deepen our cooperation with the Chinese IT industry by means of technological authorization, software outsourcing and talent training. We also emphasize our services for product development in the Chinese market and we hope to achieve "innovation in China and innovation for China" through close cooperation with the IT industry here.

Under the unique management and cultural environment of this group, we are taking strong steps towards achieving the goal of becoming "the core R&D base of Microsoft's technological research and product development".