Microsoft’s New CEO Must See the Future Before the Competition Sees Iti
Since its founding, Microsoft has had only
two CEOs: Bill Gates and Steve Ballmer. Having only two CEOs for that long a
time worked quite well, and now Gates is trying to find a new leader to take
the helm who can grow the company and have a long tenure. This is not the best
approach, because finding someone who will stay for a long time is much easier
than finding someone who will have the vision to lead the company through a
product transformation that will yield a new growth curve.
Over the past few decades, technological
change certainly seemed fast, but compared to the past few years it was
actually quite slow. For those that are old enough to remember, at one time our
primary computer was the mainframe. It took quite a bit of time for the desktop
to become our primary personal computer, and Microsoft played a key role in
making the platform shift that would drive the PC revolution.
Years passed before we all experienced
another platform shift that would make our PC experience mobile: the laptop.
With that shift, the operating system did not need to change—it worked in the
same way as a desktop. Even the user experience was similar; the main
differences were a smaller screen, slower processing speed, and less storage
space. Since the operating system and the general software remained the same
between the two platforms, people were basically doing the same things, just on
a mobile device. The change was minimal for the software makers (like
Microsoft) as well as the user.
Today, however, the change is very different.
In the past few years we have experienced two major revolutions occurring at
the same time, faster than ever before. They are 1) a hardware revolution, and
2) a software revolution.
This major hardware revolution happened
extremely fast—faster than any other platform shift in history—and it was
accompanied by a software revolution as well. By that, I’m talking about apps
for mobile devices.
An app for a mobile device is very different
than buying a packaged office suite from a large software manufacturer, like
Microsoft. The apps are either free or low fee, they can bring enterprise-level
functions on a phone thanks to software-as-a-service (SaaS), and they can be
installed by anyone easily (and deleted just as fast). In addition, apps allow
us to personalize the computing experience in a way we couldn’t do before.
For example, if I have an iPhone 5S and you
have an iPhone 5S, and if we both use AT&T as our provider, I would bet you
$1,000 that my iPhone is vastly different from yours. How can that be? Because
I have apps that I’ve selected just for me, just as you have apps you've
selected just for you.
In other words, it’s not just an iPhone; it’s
a myPhone. And the same thing is true for the Google Android phones, Microsoft
phones, and every other smartphone. Today’s software allows us to personalize
our computing device, and that’s a huge shift. Those two rapid revolutions and
the major platform shift have been making it difficult for the leaders of the
old platform to catch up.
Remember, too, that the first quarter of 2013
was the first time since PCs were invented that sales declined. The same thing
happened in the second and third quarters. When we get the fourth quarter
earnings, I’m sure we’ll see similar results. So this is not a cyclical change.
It’s what I call a linear change: a one-way change that is transforming how we
live, work, and play. We will still have laptops and desktops for that matter,
but we are using them less every day.
That means
the game has been changed on Microsoft and all of the other industry leaders.
Because of the speed of the revolutions, the expertise and the core
competencies of Microsoft are geared more for where we’ve been than for where
we’re going. With that said, though, it’s important to note that Microsoft has
great people — great thinkers — and they can definitely move forward in an
industry-leading way. The key is that they need to shift their focus to using
what I call the hard trends — the trends that will happen —
to jump far ahead of the competition.
Of course, it’s hard to jump ahead when you
have a lot of legacy systems and clients who are spending large amounts of
money to support those systems. As a result, as you try to jump ahead, you
often get slowed down, especially if you’re a large organization like
Microsoft, as well as many of Microsoft’s large customers. Your resources are
typically put toward supporting, maintaining, and innovating around the
existing systems rather than putting all-out effort into the new platform,
which, by the way, is where the new platform leaders are going.
Knowing all this, is it time for new
leadership at Microsoft? Even though both Gates and Ballmer have done amazing
things that involved a lot of planned disrupting and innovation over a long
period, the answer is yes. Will the new CEO stay as long as Gates or Ballmer
did? I don’t think this is an important question given everything I have been
talking about. Change today is not enough; we now need transformation. Think of
it this way: Blackberry changed how we use our cell phones; Apple transformed
it.
Based on the hard trends in play today, over
the next five years we will see a transformation in how we sell, market,
communicate, collaborate, innovate, train, and educate. And much of that
transformation comes from mobility, apps, the cloud, and all the new and rapid
software innovations coming at us. Think of it as a mobile, social, virtual,
and visual transformation. And because the speed of change will only increase,
we’ll need transformational thinking, a commitment to use hard trends, the ability
to see the direction the future is heading in, and to be the disruptor not the
disrupted.
So, is the future bright for Microsoft? I
believe it can be... if they choose well and find people who can help to not
just change Microsoft, but to transform it from the inside out.
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