Microsoft: Putting the Inmates in Charge of the Asylum

I received a Tweet the other day from a former client, the always-insightful John Taschek, VP of Strategy at Salesforce.com, asking for my take on this news story about a rumor that Microsoft CEO Steve Ballmer is going to make significant management changes, elevating people with engineering backgrounds at the expense of those with marketing backgrounds.  There are so many ways this is just troubling when it comes to what ails Microsoft.  Let me outline just a few of them:

  • Putting engineers in charge of anything is generally a bad idea.
  • If bad marketing is Microsoft’s problem (and it’s one of them), putting engineers in charge of things does not solve that problem.
  • Microsoft’s biggest challenges are generally neither related to bad marketing nor stifled engineering.  They’re related to bigness and the innovator’s dilemma, as expressed by Clayton Christiansen.  (I find it personally exciting that this is discussed in the Wikipedia article on “disruptive technology.”  While I wasn’t using the term in 1995 when it was first ascribed by Christiansen, it has been my career since 1979 so I guess I owe a debt of gratitude to him for giving definition to my life.)

Those of you who like typical blog posts can stop now.  Those of you who know me, however, realize that these call for further discussion.

So why is putting engineers in charge a bad idea?  The best way I can explain it is through an old joke.

Talking frog

A man was crossing a road one day when a frog called out to him and said: “If you kiss me, I’ll turn into a beautiful princess.”  He bent over, picked up the frog and put it in his pocket. The frog spoke up again and said: “If you kiss me and turn me back into a beautiful princess, I will stay with you for one week.”  The man took the frog out of his pocket, smiled at it and returned it to the pocket. The frog then cried out: “If you kiss me and turn me back into a princess, I’ll stay with you and do ANYTHING you want.” Again the man took the frog out, smiled at it and put it back into his pocket.
Finally, the frog asked: “What is the matter ? I’ve told you I’m a beautiful princess, that I’ll stay with you for a week and do anything you want. Why won’t you kiss me ?”  The man said, “Look I’m a software engineer. I don’t have time for a girlfriend, but a talking frog is cool.”

Engineers are brilliant at what they do.  Understanding what users want is not one of the things that they’re brilliant at.  I’m often asked why, in a coming up on 32 year technology career, I’ve never lived in the Bay Area.  Oh, I’ve visited there a lot, almost certainly over 100 times in that time span.  The way I always explain it?  Silicon Valley’s hometown newspaper, the San Jose Mercury News, I say, has technology on the front page of the paper five out of seven days.  My hometown newspaper, the New York Times has technology on the front page of the paper five times a year, twice after an Apple product introduction and three other times…when something goes catastrophically wrong.  Engineers are great at figuring out what’s possible.  Marketers, at least good ones, are supposed to be great at figuring out what users want.  The intersection of the two is where magic is made.

Steve Jobs is not an engineer.  Steve Wozniak was Jobs’s original technological guru.  Jobs has a remarkable understanding of what consumers want, usually before they know they want it themselves.  Steve Ballmer is a marketing guy from way back.  Putting the engineers in charge is perhaps the most damning thing he could ever do.  I have known SteveB since 1987 and have been a staunch defender of his for a long time, even when it wasn’t popular, both early in his reign and lately.  If this is his strategy for returning Microsoft to its former glory, well…Steve, you just lost me.

So, what is Microsoft’s bigger issue and how do you solve it?  Microsoft does not lack for technical excellence nor innovative ideas.  The Kinect is a great example of what Microsoft can do and the business rewards it can result in.  It’s also instructive in how Microsoft works.  Microsoft has been doing research about alternative input approaches for decades.  Yet all we had in the market was the keyboard and mouse.  Oh yeah, Microsoft did tablets too.  We see where they took that.  But I digress.  How is it that the Kinect came to market?  You can bet that if Nintendo hadn’t invented the Wii, the Kinect might not have seen the light of day for another decade.  Microsoft was threatened.  Someone else had asserted market leadership and, with it, sales success.  Only then was Microsoft able to identify technologies it had that could return the Xbox to sales competitiveness.

This has been Microsoft’s response for way too long.  When threatened, they innovate…or at least get competitive.  The browser is another great example of that.  Threatened by Netscape, they came up with the competitive Internet Explorer (and used anti-competitive measures to bring it to prominence).  Almost every subsequent browser innovation from Microsoft has been spurred by, or copied from, alternative browsers.

I am aware of way too many Microsoft products and technologies that were quashed or watered down, not because of marketing, not because of engineering, but because of internal politics.  This is not a recent phenomenon but has been a Microsoft “sickness” for over a decade.

Witness Microsoft’s response to the cloud.  They have been reasonably aggressive when it comes to server-side cloud initiatives with Azure.  That’s because Microsoft’s upside is larger than its risk.  Yes, self-impact is a concern but if they can further damage Oracle/Sun, IBM or Salesforce, well, then Microsoft’s upside potential is great and the strategic beachhead is important.  Whither, however, Office for the cloud?  Oh, yes, they’re getting around to it.  They’re hardly, however, aggressive about it.  Why?  Because Office is one of the great cash cows in the history of technology and they’re in no rush to gore that cow while no one else is really threatening them.

What do you think we’d have now if Steve Jobs were in charge of Microsoft and Office?  Do I really even have to answer that question?

No, Microsoft’s problem isn’t that the marketers were in charge and now the engineers will come in on their white steeds to save the day.  Engineering and marketing have to work in concert, driven by a compelling vision that unifies the two, often warring, groups, espoused by a leader with the strength of character to make these groups work together when their individual priorities and incentives are not necessarily aligned.  Apple does that beautifully.  Google does that occasionally well.  Throwing a bone to John, who motivated this post in the first place:  Salesforce does that pretty well too.  Microsoft?  Not so well.

There was a time when Microsoft faced a challenge from the Internet.  Almost 16 years ago now, Bill Gates issued a famous memo, a call to arms.  That is what Microsoft needs now.  A definition of what it is and, more importantly, what it needs to be.  Again, if this were Apple, Bill Gates would make a triumphant return, leading the company back to its former glory.  But Bill has other priorities on his mind and the world is a better place for that.  Is Steve Ballmer the man for that task?  I honestly don’t know.  And that’s perhaps the most damning statement of all about Microsoft.  I don’t know.

How Important is Steve Jobs?

With the news that Steve Jobs is taking another medical leave from Apple — his third — it’s legitimate to ask the question of just how essential he is to Apple’s success.  This is going to be a quick post, because I think the truth of the matter is that there are probably only 20 people who can answer that question…and they’re so secretive and such a part of the Jobsian communications strategy that we’re not likely to know the answer to that question for another year or more.

By all accounts, COO Tim Cook is a buttoned-down manager.  Apple has been AMR Research’s (now Gartner’s) #1 in its Supply Chain Top 25 for three years in a row.  Thus, I think it’s safe to say that Apple’s ability to execute its plan is in safe hands.  Cook has probably been running large amounts of the operational show for years anyhow.  How much it has helped him to have Jobs’s notoriously strong hammer can be asked, but ultimately this is not where Apple’s potential issues lie.

More to be questioned is how much of the marketing power of Apple is attributable to the “Jobsian reality field” and how much of the product vision is directly attributable to Jobs.  Jobs has indicated that he’s going to remain engaged as CEO and assuming there’s some veracity to that assertion, it’s reasonable to assume that his exquisite sense of product development will continue to guide the company.  With the Verizon announcement, the iPhone momentum continues even while Android continues to make inroads in the smartphone marketplace.  Apple’s business plan never was to be the volume leader so this marketplace condition was to be expected.  The same will probably happen in the tablet marketplace; Apple is quite happy to be the pioneer and then to reap early-mover profits while moving gracefully into the premium price place of the market.  But given that, the question becomes “what’s next?”  Apple has introduced two category-creating, or at least redefining, products in a row.  They probably need another home run in the next two years to sustain their momentum and lofty market perceptions.  Without Jobs at the plate, you’d have to question Apple’s ability, or at least likelihood, of hitting another home run.

This concern extends to Apple’s marketing as well.  Again, they do a remarkable job, second to none certainly in the technology space , and even the broader consumer space.  Here’s where it gets hard to call.  Jobs doesn’t have to be omnipresent to sustain the Jobsian magic.  In fact, lesser Jobs could actually mean more impact when he’s around.  On the other hand, if he becomes perceived as merely a figurehead disassociated from the company he used to rule with an iron fist, his magic could be compromised.

Apple more than most companies is a cult of personality and the extended absence of its leader is a challenge for the company.  That said, I don’t think it’s an insurmountable challenge.  Microsoft was able to transition from a “cult of Bill Gates” to something more nuanced.  But that was much easier because the cult of Bill was vastly weaker than the cult of Steve and the truth of a Bill-ruled company was less than the truth of a Steve-ruled company.  I think we’re nearing the time when for myriad reasons Apple is going to need to let Jobs sprinkle some pixie dust on someone else, a visionary who can sustain the momentum and help transition the cult of Steve back once again to the cult of Apple.  This mingling of Jobs and Apple is a relatively recent phenomenon.  While a search of Time Magazine’s web site and Google couldn’t help me locate the quote, I have vivid recollections of a late 80’s/early 90’s quote there which said “second perhaps only to Harley Davidson is an Apple user’s love of their computer and the company who makes it.”  The Jobs worship started with his return to the company who ousted him and with each successive product success, it grew only larger.  It’s imperative now for Apple to share the spotlight, to bring a new person to the forefront as well as transition that passion back to the company so that it transcend’s Jobs, whatever his health.

So, back to the question that started my musings.  I think Steve Jobs is as important to Apple’s success as any one individual has ever been to any technology company.  Any extended absence by him could prove to be damaging to Apple’s future products and prospects.  It sounds like there’s time for Apple and Jobs to transition that passion back more heavily to the company so that it can thrive in the inevitable absence of Jobs, whether it be this health-related matter, his waning interest or any other thing in life that could lead to his moving on/out.

He’ll be a tough act to follow, no doubt…but not impossible.  Back in the late 80’s, I actually had Steve Jobs as the luncheon speaker at a Gartner PC conference I was running.  This was right after he had introduced the NeXT computer, an amazing piece of software engineering that stood to transform the way we created and used software.  He had demonstrated it weeks earlier at Gartner’s offices in Stamford, after which none other than Gideon Gartner came to me and said “do you think we should standardize our company on these?”  The demonstration was that compelling.  I, being a noted curmudgeon, said “give me a night to think on it,” after which I came up with any number of good reasons why it wasn’t the right thing to do.  At the conference, Steve did his thing, and it was amazing.  You could hear jaws dropping in the audience.  I don’t know how many of you have ever given a meal speech but let me tell you, it’s the hardest thing in the world.  Within three minutes, all you hear is silverware clanking and the din of conversation at the tables gets louder and louder.  Not this time.  Jobs had their rapt attention.  You could have heard a pin drop.  At the end, thunderous applause.  Well, I was the next speaker.  Now what do I do?  How do you follow God and the 10 Commandments?  All I was talking about was operating system futures.  So I asked the audience, “how many of you want one of those things right now?”  Every hand in the room went up.  Then I said “how many of you are ready to standardize your company on those things tomorrow?”  Every hand went down.  (Well, I’m pretty sure Gideon wasn’t in the audience.)  I then said “so now let’s focus on what our real options might be.”

So you can follow Steve Jobs.  I’m just glad that I don’t have to do it again.

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