Sunday, April 14, 2024

Learning from Microsoft: Why Bill Gates Can Never Return

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Reports from Microsoft are that the rank and file employees who are unhappy with Microsoft’s direction are asking for Bill Gates to return. I feel for them, as a few decades ago, being unhappy with IBM’s direction, I was one of those hoping that Thomas Watson Jr. would come back. And I understand that at the time he was inundated with letters from employees asking for his return.

He couldn’t return any more than Bill can because the IBM he knew was dead and the fire that drove him to build it was gone.Over the years I’ve watched founders go and return and while there are some successes (like Apple), there are far more failures.Let’s explore the why of this.

Founders aren’t Gods

It is funny, in a sad way, that when things go badly people remember back when things were going well and connect the success of a company to the person who was running it.

But generally that success has more to do with the broad skill match of the employees in place at the time, the market, and the relationship with the customers.When a company is in trouble it’s generally because of multiple problems.The market has changed, customers have moved on and created relationships with other vendors, and the people who built the company have moved on as well.

Much like it would be if you had a car that was losing a racing series because it was no longer competitive, just replacing the driver or the tires wouldn’t fix the problem alone. Bringing back a successful CEO isn’t a fix for an ailing company.

They will step into a firm that is vastly more complex than the one they left, have executives that see him or her as more of a threat than a savior and be facing a market that looks similar but is in fact vastly different.

Expectations from the employees are that the founder will magically wave their hands and the company will recover. Granted, morale will come up initially but when the magic doesn’t follow the disappointment and disenchantment can undo any advantage. Ask anyone who was around when Gateway’s founder returned.

Building a Company and Turning One Around are Different

I’ve participated in both successful and failed efforts on both creating new companies and turning them around. While there are similarities to turning around a company and building one there are vast differences — and those differences call on very different skills.

An executive who’s good at building companies has as his primary tools knowledge of the product, integrity, a desire to take care of those who take care of him, the ability to command loyalty, and not an insignificant amount of personal charisma.

A good turn around manager has to have, on top of these skills, the ability to set aside personal feelings and make decisions that will create a lot of initial enemies and place company needs ahead of personal relationships.I’ve recently written on general process of turning a company around and it continues to amaze me that few realize that this process begins with perception.

An executive building a company needs a deep expertise in whatever it is the company does.This typically is a plus with a turnaround executive but more important is a broad set of business skills on motivating people, understanding business process, and separating out the BS.

The environments both operate in are different.The builder, during a time of success, operates in an environment of trust; employee loyalty is generally a given. The turnaround executive operates in an environment of distrust; loyalty has to be built and assured.

I think of a good builder CEO as closer to a benevolent monarch with an edge, while a turnaround manager is more like a warlord.Both can do combat but the warlord lives in and for battle.

Conversely when a company needs a turnaround manager the benevolent monarch won’t make the truly hard decisions necessary and if the warlord is successful they will either lose interest or drive the company into the ground. There is something to picking the right skill for the job.

Carly Fiorina vs. Mark Hurd

One of the clear examples of a difference in skill sets was seen when Carly Fiorina tried to run HP and was followed by Mark Hurd who actually turned the company around.

Even though Carly was brought in as a turnaround executive she appeared to approach the problem much as a manager might who was building or sustaining a company. She was initially accepted much like a founder might be, as a breath of fresh air and a visionary. She presented well and was extremely articulate at promising hope and needed change.

However, she lacked operating skills, she didn’t surround herself with people she could trust and didn’t take care of the people she surrounded herself with. As a result, she was shot from inside, something that I don’t think she ever did figure out (she blames the board in her book but that board was being fed by her people).

Mark Hurd, on the other hand, didn’t trust anyone initially, brought in people loyal to him, held everyone’s feet to the fire, and focused on strong business fundamentals.Carly was a bit overly focused on her compensation and perks as well, but that is another story.

Ironically much of what was done to turn HP around was consistent with Fiorina’s vision but she simply couldn’t get the job done and almost got ousted early during a proxy fight that could have been avoided.One piece of additional information: it was the proxy fight that assured the HP merger with Compaq wasn’t a train wreck because it became a forcing function for good merger process. This is something that wouldn’t have existed if a strong merger plan hadn’t been needed to win the proxy fight.

Next Page: Advice to Microsoft employees

Advice to the Microsoft Employee…

….Or to my younger self or anyone else in this position.Hoping for the return of a founder is not only pointless, the result will likely not be the success you anticipate.

Your real choices are to shut up and endure, get your resume’ ready and go job hunting, or get off your butt and try to fix what you can.Personally I’ve never been a shut up and endure kind of person but I’ve known a lot who are and they have been a whole lot less stressed out than I have been during times like this.

I’ve also both watched people do and have done the change company thing, only to find out that smaller and younger companies are often more screwed up themselves — they just haven’t hit a wall yet.My wife didn’t appreciate Intel until she went to work for Kodak and then suddenly Intel looked pretty good.

Personally I like the kick-butt-and-take-names route but you need to do it more carefully than I did.You can’t be just the hellion of big problems (I got a little out of control) but instead work to actually find things within your own authority you can improve and forming informal groups to work on problems.

If the entire company were to collectively stop complaining and start working more on making things better than on finding folks with titles to blame, trust me, things would actually get better.Or at least you’d be working so hard you’d likely not notice as much how bad they are.

One of my best examples was at IBM where a huge number of us got together twice monthly to complain about product problems and argued over who owned them and whose budget the fix was to come out of.One month two first line managers came in over a weekend and worked until they fixed what we were arguing about.Sometimes it is that simple, someone just has to get off their ass, stop complaining, and fix something. If enough people do that…

Wrapping Up: It’s Your Time

Hoping for the return of a founder isn’t uncommon. I’ve been there myself, more than once actually.It’s easy to point at the suits (and I’ve been on both sides of that too) and suggest they’re the problem that needs to be fixed. However companies are hardly that simple and the first thing a good turnaround manager does is cut to the bone. And if you thought what you were living through up to that point was painful wait till you experience a true purge.

A better path is to either find a place where you can be happier or work to turn where you are into a happier place.There is risk to becoming an employee activist but folks in power don’t like employees that bad mouth executives either. And at least if you focus on the problems and not the people you might actually fix something.In the end, though, it is up to all of us to make or fix the companies we want to work in, whining about the problems just doesn’t get that job done.

So, again, Bill Gates, the one the Microsoft employees hope to return is gone, the company he built is gone and neither will return. Both have simply changed too much. There is an opportunity to make Microsoft into something greater than it currently is and uniquely representative of the folks that work there now.

It is up to those folks, much like it was up to the original founders initially, to make that happen. Sometimes you have to realize that the adults won’t come back and save you because it is up to you this time.

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