• Jeff Matthews

How Not to Manage Microsoft…Like a Car Company

As far back as April, 2006 we here at NotMakingThisUp reported on Microsoft CEO Steve Ballmer’s refusal to spring for iPods for his children, and his insistence that they not use Google.

In “Over-Share from Dr. Evil’s Hideaway,” we quoted Ballmer from a Fortune Magazine story thusly, when asked if he had an iPod:

“No, I do not. Nor do my children…. I’ve got my kids brainwashed: You don’t use Google, and you don’t use an iPod.” The danger of this line of thinking, we noted, was that a heretofore successful company thus cuts itself off from knowing what its customers want.

One year later, in “Random People Creating Value,” we reported further on the dangers inherent in Ballmer’s insular, hard-headed management style, after he dismissed the Google management style as “a random collection of people” attempting to “create value.” We likened Ballmer’s approach to that of the old car companies, thusly:

Such a blinders-on, head-in-the-sand, not-invented-here mindset has heretofore been more closely associated with Detroit, where auto executives drive only their own company’s best cars. Small wonder the bigs at GM, Ford and Chrysler failed to grasp, before it was too late, the quality and innovation that allowed Toyota and other imports to eat their collective lunch.

—NotMakingThisUp, March, 2007 Little did we know that Steve Ballmer’s father once worked for Ford.

That’s right. In “Forbidden Fruit: Microsoft Workers Hide Their iPhones” the weekend Wall Street Journal describes—and we are not making this up—“the perils of being an iPhone user at Microsoft”:

Kevin Turner, chief operating officer…said he discouraged Microsoft’s sales force from using the iPhone… “What’s good for the field is good for Redmond,” Mr. Turner said, recalls one of the people who heard his comments.

Mr. Ballmer took a similar stance at the meeting.

He told executives that he grew up in Detroit, where his father worked for Ford Motor Co., and that his family always drove Fords, according to several people at the meeting.

—The Wall Street Journal, March 12, 2010

Ballmer’s father, of course, was not alone. All the car companies used to feed spanking-new, smokin’-hot, top-of-the-line models to ‘the suits.’ That’s why the suits never saw the Japanese coming.

And Ballmer—like father, like son, it would seem—is doing the same for Microsoft.

It’s been four years since we here at NotMakingThisUp flagged that intransigence as a potentially fatal flaw—and that was back when the iPod was the hot new product.

Of course, the iPod long ago made Microsoft’s “Zune” music player as extinct as monks transcribing bibles. More recently, it is the iPhone that has been pushing Microsoft’s own smart-phone software off the shelves and into computer museums, where it belongs.

Now, just this weekend, we ordered an iPad, and it’s only a matter of time before the Dell notebook on which we write these virtual columns will go wherever dead Zunes are buried. Seems to us that if Bill Gates is as smart as Warren Buffett thinks, and if Bill Gates really wants to see his legacy survive, he should buy Steve Ballmer an iPad and an iPhone and an iPod. And Steve Ballmer should use them all, to understand—really understand—what Microsoft is up against. Otherwise, Microsoft just might need to call Alan Mulally in a few years, to clean up the mess in Redmond. Mulally, for readers not familiar with the name, is the genius behind the recent Ford renaisscance. Mulally’s very first act upon being named CEO by the Ford family? He drove every Ford in the lineup. Not just the good ones.

Jeff Matthews I Am Not Making This Up

© 2010 NotMakingThisUp, LLC

The content contained in this blog represents only the opinions of Mr. Matthews, who also acts as an advisor: clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

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GENERAL

The content contained in this blog represents only the opinions of Mr. Matthews. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. The content herein is intended solely for the entertainment of the reader, and the author.

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