Microsoft has just announced Satya Nadella as their new CEO. I’m glad to see them pick an internal candidate, and one that truly understands their business. It’s fitting he’s been heading up their cloud division, and before that worked on business products, servers, and online services. This means he has first-hand experience with two of the three product lines that generate most of Microsoft’s revenue and profits (Business and Servers), and also where they’ve failed to make an impact (Consumer Online Services). That wide ranging experience should serve him well.
This is what I recommend are his top three priorities as he takes the helm of one of the world’s biggest and most successful companies, that’s facing tremendous challenges to remain relevant.
1. Articulate a Compelling Vision
Microsoft’s original purpose was “a computer on every desk and in every home”. That was inspirational! And they achieved it. Microsoft helped bring a big chunk of the world into the computer age. Microsoft is a tremendous company, but it’s a company people love to hate.
Last Summer Microsoft announced their new “One Microsoft” strategy:
We declared that Microsoft’s focus going forward will be to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.
I nearly fell asleep reading that; it’s dull, dull, dull. New CEO, you can do better!
2. Focus on People – Regain Their Trust
With an exciting and compelling vision in place that will help Microsoft attract and retain the best talent. This is going to be crucial for it to compete and innovate against younger more nimble startups. Part of a new approach to their employees started last year when they got rid of the infamous and demoralising stack-rank system for grading their staff.
The other group of people they need to excite and motivate is their customers. Unfortunately Microsoft has become a company people love to hate. Everyone remembers the “blue screen of death”, or complains about the complexity of Sharepoint, or laments the lack of apps on Windows Mobile. But it’s a company with tremendous achievements under its belt that people just don’t appreciate, and I’d like to see them tell that story instead.
A good example of a company reinventing itself by going back to its roots is the TV commercials run after Steve Jobs return back to Apple in 1997. At that time Apple was in a mess, with no clear direction and a lot of product failures. How did Apple reposition itself? It went back to its roots and produced a wonderful commercial, “Here’s to the crazy ones“.
Like that Apple ad, Intel also sought to create an emotional connection from the viewer towards the company. Before 2009 Intel had always run tedious adverts about its chips with that annoying bong-bong-bong-bong that seemed to interrupt the flow of the message. Instead, in 2009 they ran a brilliant series of TV commercials about its people and the culture at the company. At the end of each commercial was a group of employees singing the same Intel “bongs”. It successfully and humorously got the message across that innovation and cutting edge technology is an integral part of Intel. Suddenly I’m interested in Intel!
Every marketer knows emotion overpowers logical decision making, but again Microsoft fails on this front, trying to sell us on the practicalities or value of its products.
Like GE under Jack Welch I think they need to aim to be number 1 or number 2 in every market they compete in. And if they can’t, they should get out of that market. They need to focus on strengths, not to dilute their efforts trying to fight a thousand battles.
Around ten years ago Microsoft had 95% market share in personal computing. Now it’s around 20%. This isn’t because Windows has collapsed, but that alternative devices like smartphones and tablets have emerged in which Microsoft has negligible market share. Their answer to the slow decline in desktop computing and the massive rise in tablet computing is a one-size-fits-all product: Windows Surface. People buy the iPad because it’s the best tablet, or a Kindle because it’s the best way to read books. Microsoft’s never going to win with a compromise product.
To really improve their products Microsoft’s got to adjust to the new web world we now live in. They need to learn from their acquisition Yammer and iterate using rapid development processes. It will lessen the chances of big bang product turkeys (Zune, anyone?), and give everyone in the company a sense of urgency that doesn’t exist when you’re focused on a two year release cycle. Part of Microsoft’s way of working is just by the nature of their dominance in the old world of computing, but the cloud is here, and they have to get used to what that means for product development.
Finally, I’d also like to see Microsoft drop the negative commercials, particularly those against Google’s ChromeBooks. They are missing the point entirely. People dislike the Operating Systems of yesterday and to most people the idea of a cheap laptop that doesn’t need constant updating or protection from viruses is bloody marvelous. I don’t care that it’s not a “proper laptop”, that’s exactly why I want to buy one.
I’m really excited to see the new Microsoft emerge, and I wish Satya Nadella all the best. It’s going to be fascinating to watch Microsoft over the coming years.