[Editor’s note: Joachim Kempin is a former top Microsoft executive and author of a new memoir, Resolve and Fortitude: Microsoft’s 'Secret Power Broker’ Breaks His Silence. This is Kempin's fourth column on Microsoft for ReadWrite. See his earlier contributions here, here and here.]
Over the last couple of weeks, my provocative weekly columns and blogs have created an astonishing amount of feedback. I feel honored. The general tenor: Microsoft is no longer capable of creating innovative ideas or products. In his latest CBS interview, even Bill Gates joined that chorus. People have given up on the company and its leadership team. Some hate its CEO so much that they can’t write about him or the company he is supposed to lead in a rational fashion. They call Microsoft “the Borg.” I have quite a different take on the company and its potential.
Four years ago this country was in the throes of an economic recession not seen since the 1930s. Then-candidate Obama campaigned with the motto of hope and change. I am campaigning for this once great company with the same thought in mind. Stone me - I probably deserve it - but I still firmly believe that deep down Microsoft has the talent to rise to the occasion and cause the paradigm shift needed to lift itself from the ashes.
In many ways, Microsoft’s current predicament is similar to the one facing the Republican Party today. With the country still plagued by a 9% unemployment rate, Obama in 2012 was vulnerable, but Republicans couldn’t take advantage. Obama ran an efficient data-mining campaign, and his team possessed the better kaleidoscope in regard to the country’s shifting diversity mix, social order, and values. The world has changed around the Republican Party, and like Microsoft it hasn’t kept up. Continuing to condemn abortion, gay marriage, gun control and entitlements while calling on illegal immigrants to self-deport will further marginalize the Grand Old Party.
The World Has Changed - Microsoft Hasn't
Today, Microsoft finds itself searching for static security within a continuously evolving social-technological landscape. Back in the late 90s, together with its partners, Microsoft owned the dominant information technology platform and ecosystem. A questionable judge and an appellate court concurred with the Feds, and ill-guided politicians, Microsoft haters, and competitors maintained that the company had gotten too powerful and needed to be reined in. I still consider their intervention a first class judicial blunder, but who am I to change antitrust history?
Declaring the company a monopoly and stamping the scarlet M on Bill Gates’ forehead, caused a lot of pain and a change of guard, which led to an unparalleled leadership crisis. The company lost its edge.
No wonder! Competition never rests. As complacency, bureaucracy, and lawyer scrutiny gain the upper hand, you will lose your lead and endanger your franchise. Bombing with a disastrous Windows Vista operating system, getting a late start on cloud computing, and not recognizing social media and mobile trends nearly pushed the company over the cliff. From then on, Microsoft found itself in catch-up mode. Infighting fractions, talent drain, and severely hampered technical thought leadership accelerated the dethroning of that once top-notch enterprise.
Like the Republican Party, Microsoft’s leadership team never got the message that the landscape was rapidly changing to its disadvantage. The company’s fixation on the declining Windows platform reminds me of the Republican Party’s continuing focus on 18th-Century social values where no Internet existed, long-distance travel was done via horse and carriage, and Social Security and Medicare were not heard of. While the majority of constitutional principles developed by the founding fathers remain valid and worthwhile to defend, the last 200 years have left their mark and caused several paradigm shifts progressively adjusting people’s social consciousness.
Missing The Shift To Mobile
Innovation and changes in information technology preferences happen much quicker. The last decade presents itself as a great example of a relatively swift first-choice-transformation as hordes of end-users opted out of Windows-based devices and flocked to alternative mobile communication tools. Microsoft’s top honchos missed this paradigm shift badly, which deteriorated the Windows franchise, making it less relevant and less valuable. The time has come for Microsoft to accept that, move on, and pursue growth opportunities beyond.
When it comes to politics, I am an independent who subscribes to William James’ style of pragmatism. I always vote for whoever presents common sense, and not for party doctrine or ideology, which will rarely be executed upon anyway. During my 20 years in Microsoft, I had plenty of opportunities to observe a similar viewpoint from Microsoft’s partners. They preferred to stay independent enough so that they could freely pursue the most promising opportunities and not merely follow Redmond’s ideologically driven dictate.
As long as Microsoft’s offerings were compelling and helped them win, they were loyal followers. Today, they are defecting in droves because Microsoft’s leadership has missed the boat too often. I would have humbly acknowledged this, even in defeat, and embraced it as a growth opportunity by catching up and leading the next phase of innovation.
Instead, the current leadership team jealously clings to a shrinking Windows franchise and continues on the path to protect it, without seeing beyond its limited horizon. That conduct is preventing the company from pursuing software development opportunities on other platforms that, when combined, have already started overtaking Windows. (Protectionism, even with resolve and fortitude in mind, is the worst solution where collapse is not an option!)
Be Open, Not Closed
The key for Microsoft’s revival lies in writing software for all relevant platforms—in particular the ones outside its current realm like iOS and Android, more than doubling its business potential. Look forward and make innovation work and ring in a new area of openness! Only that will set new standards people can trust, retain current partners, and regain lost ground with others. This is why I think the company needs a major overhaul from top to bottom, accompanied by a shift in management style I can believe in. Bob Herbold’s book What’s Holding You Back comes to my mind.
For this change to take hold, a very effective ground game will be needed to recoup lost trust with every possible hardware and software vendor. The Obama team executed this to perfection by audaciously switching its 2012 motto to forward and winning over doubtful voters who believed in his hope-and-change message, but were deeply disappointed of what had transpired during his first term. A huge door-to-door campaign and effectively using information technology ahead of his rival cured this impression and made voters reborn believers.
It reminds me of what I witnessed during the Windows 95 crusade. Microsoft ran a terrific ground game by nearly tripling its software- and hardware developer support, instead of letting it slide, as an insider recently mentioned to me in regard to Windows 8. Just count the number of available Windows 8 applications. Ten thousand, as another employee told me, were envisioned at launch! The company missed that goal by a wide margin! The ground game, while desperately needed, was ineffective. Long time hardware partners even felt outright betrayed when the company launched competitive tablets. Like software developers they continue to move on to competitive mobile, social media and other environments by assuming they provide greater opportunities. What an embarrassment!
How large of an earthquake will be needed to shake Redmond to its foundation, and stop pursuing an already lost dream? The company still has significant financial resources and talent, and therefore I have neither given up on hope and change nor on forward. Call me stupid, but with a lame duck board, the only solution might spring from shareholder dissatisfaction and rebellion. That is extreme but it might, in the end, offer the only chance. What remains to be seen is whether this this alone will be enough to propel the Redmond juggernaut fast and far enough forward to come to grips with the realities of the 21st Century technology trends.