Microsoft’s Tactic To Reduce Improvement Debt: The Silent Killer of Growth

Coming up in today’s edition:

1. Improvement Debt: The concept that drives performance at Netflix & Microsoft

2. Execution: Four tactics to implement the concept in your team

3. Million-Dollar Question: To reduce the improvement debt in your company

1. THE BEST SYSTEM FOR CONTINUOUS IMPROVEMENT

Every day, somewhere in the world, a team stumbles upon a better way to solve a problem.

• Maybe it’s a tweak to their onboarding process.

• Maybe it’s a smarter way to analyse customer data.

Sometimes these discoveries are intentional; other times, they happen by accident. But they all reveal the same truth: Improvement is not a project, it’s a process.

The best companies don’t treat improvement as a one-off event. They understand three key principles:

1. Change is constant, not an occasional disruption.

2. The best improvements come from within the team, not top-down mandates.

3. Small, steady changes are more powerful than sweeping transformations.

But knowing these principles isn’t enough.

The real challenge is embedding them into the daily rhythm of work.

Microsoft’s Improvement Debt

At Microsoft, engineering teams dedicate the first hour of every sprint planning session to what they call "improvement debt."

They don’t wait until something is broken.

Instead, they proactively examine what could be better: one week, it might be how they handle security scanning; another, how they manage code reviews.

The result? An 80% higher adoption rate for new best practices compared to previous approaches.

This system works because improvement isn’t treated as an afterthought. It’s woven into the fabric of how they operate.

Netflix’s Chaos Engineering

Netflix applies the same philosophy to system reliability with its chaos engineering practice.

Instead of waiting for failures to expose weaknesses, they deliberately take small risks: taking one service offline for a few minutes, then increasing complexity over time.

Each test builds resilience, making large-scale failure less likely.

Impact: The success of Netflix’s chaos engineering has led to the development of proactive risk assessment strategies in other industries, including financial services and healthcare.

Their learnings have inspired "resilience engineering," where companies simulate disruptions in different parts of their organisation to stress-test operational stability.

This practice has even influenced customer service teams, which now experiment with handling simulated high-demand scenarios to refine response strategies.

Other Notable Examples

• Intel: “Tick-Tock” development model alternated between shrinking chip architectures and introducing new microarchitectures, ensuring consistent technological advancement.

• Norwegian Ski Team: Integrated technological advancements in equipment and training methods, leading to a record medal haul in the Winter Olympics.

• 3M: Encourage employees to spend 15% of their time on personal projects, fostering continuous innovation leading to products like Post-it Notes.

• San Antonio Spurs: Improved Jeremy Sochan’s free-throw percentage from 46% to nearly 70% by simplifying his shooting technique, eliminating unnecessary movements, and focusing on efficiency (a practical application of continuous improvement principles.)

2. HOW TO EMBED CONTINUOUS IMPROVEMENT IN YOUR TEAM

Most teams think they need big initiatives to drive meaningful progress. But the truth is, small, consistent refinements create lasting change.

A single improvement may seem insignificant, but layered over weeks, months, and years, they define whether a company thrives or stagnates.

Here are four tactics to embed it in your team today 👇

1. Make Improvement Debt a Priority: Set aside dedicated time (an hour per week or part of sprint planning) to ask: "What could work better?" Keep the focus small and actionable.

2. Run Micro-Experiments: Encourage teams to test small changes before committing to big overhauls. Want to improve decision-making speed? Trial a 10-minute daily huddle for a week and see the impact.

3. Build a Safe-to-Fail Environment: People won’t try new things if they fear repercussions. Leaders must actively celebrate both wins and the lessons from failed experiments.

4. Create a Feedback Loop: Don’t let insights disappear. Capture and share improvements across teams so that learning compounds across the organisation. ING Bank structures improvements into three-week learning cycles. A team picks one small process to refine, runs an experiment, measures the results, and shares their findings.

So, what’s the one process you could refine this week?

Start small. Iterate. And watch the compounding power of continuous improvement unfold.

3. ONE MILLION-DOLLAR QUESTION

A question every leader should ask to crush improvement debt:

Most leaders fall into the trap of thinking that improvement has to come in sweeping, transformational waves.

But the reality? Massive success is the result of compounding small wins.

This question forces you and your team to:

1. Focus on action over theory – No bloated strategy documents, no five-year masterplans. Just a simple, immediate tweak that moves the needle.

2. Prioritise leverage – Not all improvements are created equal. The right small change (streamlining an approval process, adjusting a meeting cadence, or automating a repetitive task) can have an exponential effect.

3. Create momentum – When teams see that small changes lead to real results, they stop waiting for permission to fix things. They start seeing improvement as part of their daily work, not an occasional project.

One improvement a week might seem small, but stack 52 of them over a year, and you’ve built a compounding machine for high performance.

The best teams don’t wait for change, they create it.

MY TOP FINDS OF THE WEEK 🏆

For Your Performance

• What’s more important for your performance - more positive thinking OR less negative thinking? (Find out here)

For Your Team

• Eric Schmidt (Former CEO of Google) 🗣️ Why you should hire “divas” (Counterintuitive take)

For Your Health

• Luka Dončiċ was part of the biggest NBA trade of all time to the LA Lakers this week. Check out his approach to handling criticism on JJ Reddick’s Podcast (Clip here)

Hope you enjoyed this week’s tactics. I’ll be back next Sunday with a new lineup 👋 - Alex