In the wake of Steve Ballmer’s exit from Microsoft and the announcement of their acquisition of Nokia’s handset division, many have been talking about how Microsoft has lost its innovative edge because of a culture of fear.

I think fear rocks.  If you’re human and alive, you’re afraid. Or at least you should be. Fear keeps us from doing stupid stuff as often. Fear of being a fat old man got me out of bed this morning to take a run. Fear of aggravating a gimpy knee kept that run to a manageable 4 miles.

Maybe Microsoft is just normal after all.  They’re afraid. And everyone’s afraid of something.

But over time, organizations should fear different things. Young, innovative start-ups have legit fear. They fear running out of cash. They fear being seen as normal and big and corporate. Most of all, they fear making stuff customers won’t love.

Eventually, a few of those innovative start-ups make it. A very few, like Microsoft, make it BIG. They create a buzz as the cool place to work and the company that churns out great stuff. Everyone – customers, competitors, investors, and secret admirers – wants to know about the secret sauce. People start to call, write, tweet. They want to visit, to take selfies in front of headquarters. They want to drop the inside scoop on what makes this super-successful place tick. Because we love nothing like success, even if we’re just rubbing up next to it and hoping a little of that winning fragrance hitches a ride on our clothes.

Pretty soon, the founders realize they’re riding a rocket. They grant interviews. They write books. They distill their experience into snappy lists. Eventually, they host conferences and visits for the eager masses.

Behind the scenes, something subtle but profound is shifting: their fear. Oh sure, they still have fear. But now they fear different things. They fear losing their exalted place in their social universe. They fear losing their reputations. Suddenly they realize how high they’ve risen and they develop a fear of falling.

And here’s where they unconsciously make the big mistake: they confuse the fear of falling with the fear of failing. They start taking fewer risks. As Ballmer reportedly told Microsoft’s leader of an innovative web-based word processing product ten years ago, “The company can’t afford another big bet right now.” They start to become more insular and less open to contrary ideas, aided by sycophants who keep singing their praises. They start to pretend they have answers they don’t have because they forget that humility and curiosity are virtues, not signs of weakness.

Great companies like Microsoft and Nokia – and let’s say it like it is, these two companies have been hugely successful and influential companies in the last 30 years – should be afraid. But to avoid being the combination of two freaked out companies hugging each other on the edge of their self-made cliff, they should cultivate different kinds of fear:

  • Fear of doing boring work. Any company in an industry as innovation-driven as technology should be scared to death about doing work that is seen as humdrum. The smartest, most bright-eyed talent just won’t bother going there to work anymore. Unfortunately for Microsoft-Nokia, most people aren’t turned on by the super-lucrative Windows/Office franchises and the iconic Nokia ringtone is a thing of the past.

  • Fear of a lack of big ideas. Microsoft needs to instill a healthy fear of just turning the crank. People throughout the organization should know that the ticket to not only advancement but continued employment is coming up with, incubating, and testing big ideas. You’d know Microsoft-Nokia cultivated this fear if a healthy proportion of their leaders had track records nurturing big ideas vs. maximizing big, existing product lines.

  • Fear of the cost of failure. As Rita McGrath and Ian MacMillan have pointed out, it’s not how often you fail that matters. It’s how much those failures cost. Start-ups are great at this because they have to experiment but often don’t have much cash. If Microsoft-Nokia can rediscover that spirit and hold innovators accountable for being shrewd managers of experimental resources, they can get back in the game.

  • Fear of lost learning. While managing the cost of failure is important, it’s equally important to ensure that every experiment – especially the failures – are stripped clean of all learning possible.

While shifting the culture of any company – especially one as large as Microsoft, much less the combined Microsoft-Nokia – is a daunting task, instilling these useful fears would give the company the chance to become the hot place where top talent wants to work on cooking up wow-inspiring work for delighted customers. And that would be good for everyone.

Be bright.Noonday Sun