It's the Vision, Stupid

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Remember Bill Clinton's great one-liner? "It's the Economy, Stupid!" James Carville supposedly coined it to keep the Clinton campaign focused like a laser on the major issue that would win the election for Clinton against George H.W. Bush. By the way, it worked.

I have been thinking a lot about Microsoft lately. For a company whose name once simultaneously inspired legions and terrified equal numbers - who remembers the "Microsoft File", or the Department of Justice lawsuit - Microsoft, despite over $76BN cash on hand, a valuation of $278BN (source), they seem to be stumbling quite a bit. Steve Ballmer has a new plan called Microsoft One, then all of the sudden he is retiring in 12 months; they are doing great, they are terrified of a proxy fight by ValueAct - who owned less than 1% of the company!

Even more relevant, perhaps, much of the market - public investors, private investors, venture capitalists, entrepreneurs, engineers, designers, salespeople, marketes and product managers - all view the once-most-valuable company in the world as an old elephant just waiting to fall.

What is Microsoft's problem?

Microsoft has had three core products for years. I don't care that they have Bing, or that there is Windows Phone (or whatever they are rebranding it for 2013), or that Xbox is cool; Microsoft's entire business has been built around: Windows, Office and Server. If Microsoft threw away all the rest years ago, or at least spun them out, they could have a much higher valuation right now.

The problem is that those three products are becoming less relevant as time goes on, and Microsoft is culturally incapable - as are most companies that have built their fortunes on a core product or service - of looking completely outside these products, let alone risking cannibalizing or actually disrupting them. And so, they have been trapped in a solar system wrapped around these three suns, spinning as the rest of the galaxy goes by.

How do they get out of it?


Before Microsoft looks for the next CEO, before they ask if s/he should be an operator vs technologist vs marketer vs salesperson, before they decide internal vs external, heck, before they hire a recruiting firm (oops, too late, Heidrick & Struggles has the job), the Board needs to ask, "what is our Vision?"

Wait, you ask, isn't that the CEO's job to set the vision? Yes! It is! And Steve Ballmer is not a vision guy, he is a top-notch execution guy (as far as I can tell from the outside, anyways).

Here is what Microsoft's Board should do:

  1. Come up with some visions of the future; free-think it, it won't hurt (not too badly)!
  2. Come up with some potential future outcomes, i.e. realities of those visions
  3. Create an interview process for CEOs that centers entirely around two questions.
    1. What is your future vision for Microsoft?
    2. Who would you bring on board to execute it?

Is that hard work? Sure it is. Shouldn't the Board leave the hard work to the CEO? Not a chance! This is the Board's fundamental job. It must hire a CEO who can save the future of the company (its present is doing just fine with cash flowing in). To do that, it must know what future this person envisions, and if the person recognizes the boundaries between a visionary CEO vs executing executives, and how difficult it will be to change the culture at this enormous ship. I don't care if they are 30-years-old and have never done it before, or 65 with 45 years experience under the belt.

Reorg? Only if it fits the strategy for implementing the vision. Acquire Nokia or RIM? Only if it fits the strategy for implementing the vision. Internal vs external? Only if it fits the strategy for implementing the vision. "One Microsoft"? Only if it fits... (you get it).

Time for Microsoft's Board to take the bull by the horns and win the company back.

Postscript: this article was written on an Apple MacBook Air, in Google Chrome Browser, sent to open-source Wordpress, running on a server running Linux. Where is Microsoft?