Wrong Guy for the Job

In Godfather, right before entering the mafia war, Michael Corleone fires his childhood friend, Tom Hagen. When asked why, Corleone tells Hagen he isn’t “a wartime consigliere”.

I read this 2012 article by Kurt Eichenwald titled Microsoft’s Lost Decade that describes why Microsoft had devolved from being:
“one of the industry’s innovators into a “me too” purveyor of other companies’ consumer products”
So much so that:
“One Apple product (the iPhone), something that didn’t exist five years ago, has higher sales than everything Microsoft has to offer. More than Windows, Office, Xbox, Bing, Windows Phone, and every other product that Microsoft has created since 1975.”

You might say companies rise and die; so what’s new? Well, for one, Microsoft didn’t miss many of those opportunities. They spotted them, acted on them, even had prototypes ready and then never productized them! Why? Steve Stone, a founder of Microsoft’s technology group, sums it perfectly:
“Windows was the god—everything had to work with Windows.”
And so the e-reader prototype from 1998 (that’s almost a decade before the Kindle and the iPad!) was shelved. Touch-screen software that was ready well before the iPhone was killed because:
“Office is designed to inputting with a keyboard, not a stylus or a finger.”

Even when playing follow-the-leader, Microsoft took years to come up with a product. They launched their music player Zune years after the iPod. Days after the Zune launch, Apple announced the iPhone. And the dedicated music player was history!

At least Gates’ decisions to align everything with Windows and Office made perfect business sense…at that time. So I wouldn’t be too harsh on him (it’s easy to judge with hindsight). His successor, Steve Ballmer, though was different.

Ballmer laughed at the iPhone when it was launched. Contrast that with Google who ensured their services (search, mail, maps etc) all worked on the iPhone. Not one to learn from his mistakes, Ballmer laughed at the iPad next. And that device marked the beginning of the post-PC world.

Truth be told, Ballmer was a guy picked to ensure the Windows-Office dominance continued. A guy good at deal making. A guy who knew how to use Microsoft’s $58 billion cash reserves to acquire any dangerous competitors. But all his strengths were like the Maginot Line: the competitors just found a different line of attack. Apple and Google made OS upgrades free. Hell, Google made all its services free! And came up with free Web versions of Office. And then they acquired comparable cash reserves (Google had $50 billion; Apple had hit $100 billion) thereby neutralizing Microsoft’s cash advantage.

Worst of all, Ballmer was not a product guy (or even a technical guy; he was a sales/marketing guy). So he was not equipped to compete with the new product companies (Apple and Amazon) or with the new service companies (Google and Facebook).

Microsoft, just when it needed a wartime consigliere, had hired Tom Hagen instead. Turns out Michael Corleone made better business decisions than Bill Gates and the rest of the Microsoft board!

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