Matthew Ferrara, Philosopher

Advice to Microsoft: Be Yourself

As Microsoft’s Steve Ballmer retires, pundits are offering advice on how to fix Microsoft for the future. My advice: Don’t listen to any of them.

Funny how everyone knows how to “fix” one of the world’s largest technology companies, Microsoft, once Steve Ballmer leaves.  Trouble is, most of the advice I’m hearing is glaringly wrong. Not technically wrong, since I suppose some of the ideas might work in the marketplace.

But dangerously wrong – for a company called Microsoft.  

For example, the Wall Street Journal asked 11 CEOs what they’d recommend to fix Microsoft. Interestingly, I’d only heard of two of the CEOs or their companies – Bob Lutz formerly from GM (that paragon of fixed companies) and the aptly named Ben Huh, of Cheezeburger, Inc,. the website that makes you say huh to funny pictures and videos online. Possibly, the rest might all be wonderful, profitable companies with terrific CEOs doing great work.

The article didn’t mention if any of them generate the $78 billion in revenues that Microsoft does every year.

Much of the advice thrown at Microsoft falls into two categories: Cliches (accept more risk, unleash its creative people, acquire talent) or Unreal (Microsoft should do what we’re doing). I’m not even sure the cliches are credible, given the performance and longevity of a company founded in 1975. But it’s the Unreal ideas that would be far more dangerous, because they  all boil down to:

Microsoft needs to become something it’s not, to be relevant and thriving in the future.

Examples include suggesting Microsoft get deeper into social, build a true tablet, or create their own phone company. Aside from wondering whether the market needs more of these things (another social network? more tablets? yet another phone platform?) the greater error comes from encouraging Microsoft to become UN-Microsoft.

And that’s terrible advice.

Any CEO who tries to re-wire Microsoft into some kind of knock off of Apple or Facebook or Google would be wrong. Historically, whenever Microsoft strayed from its core culture and competencies (with the exception of XBox), it has done poorly. That’s because core culture and competencies matter, and they aren’t rewritten by simply creating a new strategic plan in PowerPoint. We can offer kudos to companies whose cultures brought innovative social and mobile products to life, while at the same time encouraging Microsoft to stick by who it deeply, perhaps irrevocably, is.

Companies who are unwilling to embrace their core culture and competencies always lose. Consider JC Penny, whose last fixer-upper-CEO tried to turn it into something it wasn’t with no success. I bet he was advised to be more like the Apple store, or Nordstroms, or other things JC Penny was (and is) not. Blackberry’s demise is no different: the company tried to capture consumer market share using a culture and technical core geared towards business and government users. Alas, they too will suffer the consequences of culture creep.

Ironically, we all know the stories of Zappos, Southwest and Tiffany’s who succeed brilliantly in their industries, with close competitors, by rigorously and consistently embracing their core culture. They innovate where possible, but never waver from their true selves.

That’s the lesson the next Microsoft CEO must embrace. Microsoft is a slow moving, careful, highly profitable operating and productivity suite company. There’s nothing wrong with that, nor is it a sector that is going away. School kids will write papers in the future; salespeople will make presentations; and corporate IT will run global infrastructure using somebody’s OS and productivity suites. They might as well be Microsoft’s. But Microsoft’s next CEO should accept that it is not a hardware, phone, social network or music company.

And shouldn’t try to be one.

That doesn’t mean Microsoft can’t be better, smarter, faster.

There is lots of room for improvement in OS and productivity suite markets, and innovation would enable Microsoft to deepen its hold in these areas. The release of online Office365 suite has proven Microsoft capable of being a full-powered app suite running on any device. Double down on success, rather than diversify into incompetencies.

I often suggest my clients read the book ReWork by Jason Fried and David Hansson of 37Signals. It had a wonderful, simple message: Figure out who you are as a company, stick to it, do it well every day, make money, and avoid the temptation to go big for the wrong reasons. Microsoft is already big but it can still avoid the temptation to go wide.

Sometimes clients ask: How will we compete with a new company in town, offering bubble-gum and candy to our salespeople and customers? My answer is always the same: If your strategy depends upon copying what the other guy doespack up now. But if you’re clear on who you are, what you do, and what your company stands for, send your competitors a greeting card at the holidays. And get back to implementing your own mission, every day, to the best of your ability.

I hope Microsoft’s next CEO figures out what it means to be Microsoft, then sticks to it while still delivering innovative, delightful products around it.