Walking the walk versus talking the talk
Mini-Microsoft has a very good post that reviews the recent Company Meeting. Looks like he came away happy with the content. Most interesting to me - and a seeming highlight for some others - was Steve Ballmer giving a speech where he reviewed a company scorecard:
Especially impressive was SteveB's scorecard slide where he ranked red/green/yellow how we fared against each of Linux/Oracle/IBM/Sony/Nintendo/Google/Apple/piracy etc etc, customer satisfaction, revenue, innovation, hiring, etc. I don't recall that ever happening before. In meetings past I always felt the execs sidestepped issues of consumer perception and confidence.
(via a link provided in Mini's post)
I'd blogged some time ago that MSFT needed a consistent scorecard for each business unit. It was painfully obvious from various analyst/financial community events that each group has been free to cherry-pick whatever metric they felt put them in the best light - no matter how silly that item was. So I'm encouraged that one apparently now exists. Of course mine included profitability and market share. It's unclear whether this one does. I had also suggested that each business unit be forced to report their scorecard at the Company meeting. There's nothing like the peer pressure of thousands of fellow employees/shareholders when you say, reveal that you lost another $1B and got your ass kicked by Nintendo - not that I'm singling out any group in particular, you understand. Still, it's encouraging that a consistent competitive scorecard now exists and that Ballmer et al resisted the normal urge to color all boxes green (assuming green is good).
As I posted recently, a big problem for MSFT in the investor community is its refusal to acknowledge the many, many, mistakes and failures that have occurred this decade. Former hedge-fund manager and TV personality Jim Cramer captures this external perception nicely with this:
"Microsoft, other than aQuantive, feels it's better at everything than anyone," Cramer said. "Maybe it was at one time. But that's a terrible amount of hubris to run a company with."
In my view, Ballmer's credibility would actually be enhanced by being more forthright and self-critical publicly. After all, it's not like the mistakes and failures aren't readily apparent to all. So the real concern is that management is blind to them and/or not focused on fixing them. To that end, will shareholders see the scorecard -or at least a sanitized version - along with a candid discussion at the upcoming meeting? Don't hold your breath.
Getting back to Mini's post, I took a look through the comments. While some didn't like Ballmer's speech:
SteveB speech was a big drag.
What eloquence! Several others - Mini included - apparently did. What really struck me though, were the number of comments where purported employees were still looking for Ballmer to solve the company's many problems. For example:
I loved the meeting, and now my after thoughts - if Steve Ballmer was able to get that speech plugged into the org, to get that vision to drive the company, most of all the division I work for, then he's the greatest CEO on earth (that I know of), if not, he's just a pretty good speaker.
Many of you bash Ballmer, but I wonder whether his insistence at staying is because he realizes the 4 frat boy cheerleaders he has reporting to him are paper pushers. I hope that's the case, I hope he's just waiting for someone more inspiring to show up and then turn things over.
The first one claims to be from a [former] AQNT employee. So in that case, I can understand how he/she might be missing some historical context. However, as I read these and other comments where folks are looking to Ballmer as the savior, I'm thinking "Who do they think has been CEO since 2000?". Isn't seven years long enough that maybe Steve's impact in that role should already be visible? If so, does anyone seriously think that the lack of accountability, vision, and execution that has characterized the company this entire decade is suddenly going to change? For instance, if the "4 frat boys" are just paper pushers - which btw seems excessive, who hired and/or promoted them? Why are they still around? Answer: er...Steve and er...Steve. Now the caveat here is I didn't hear Ballmer's speech, nor do I know the context. Was it a long-overdue mea culpa for himself and the leadership team? That would be constructive. Or merely an explanation of the importance/difficulty of the current strategies? In other words, more excuse-laden calls for "patience"? Other? Who knows. And what are the concrete plans for overcoming the obstacles? As one poster commented:
He mentioned a meeting with the financial analyst community a few weeks ago. If I heard him correctly, he said they asked him, "How will Microsoft succeed?". His answer left me scratching my head. He basically said (paraphrasing), “because we have to”, “we have great employees”, etc. Is that really an answer shareholders and investors want or need to hear?
I know what meeting he's referring to and that is a reasonable characterization of what Ballmer said. And no, it wasn't what shareholders and investors wanted to hear - hence the subsequent selloff.
I have mixed feelings penning this post. On the one hand, I'm happy that some employees left the meeting charged up. That's a good thing. I hate to pour cold water on it. On the other hand, unless Ballmer had an epiphany recently (or you subscribe to the "he wasn't really in charge until Gates left" scenario), logic suggests that MSFT under his leadership moving forward will be pretty much as it's been under his leadership so far this decade. Ballmer talks a good talk. He's been doing it for a long time. Sadly, results have proven that - for whatever reason - he can't walk the walk. So unless you're happy with the current status quo, real change is likely to require a new CEO.
Update: (another recap of the recent Company Meeting)
Update #2: Former COO Bob Herbold chimes in (courtesy Seattle PI's Todd Bishop). Excerpt (underline mine):
After giving other examples of how Porsche, Toyota and other large companies avoided business traps, audience member Janis Machala asked Herbold what trap Microsoft is stuck in. Herbold said that Microsoft is hiring plenty of people, but one of the big challenges is that it has not been able to launch profitable new units that complement its existing businesses. Microsoft also faces big hurdles as it attempts to transition to delivering software over the Internet, with Herbold calling it an "unnatural act" to ask 700 million people to upgrade their software through installations or buying new PCs. He said software "wants to come from a server."
Amazing how candid former execs can be after they are no longer face down in the
SPSA feeding trough...