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July 14, 2004

Dinner With BillG

A lot of geek cocktail-party conversation revolves around Microsoft - its products, initiatives, goofs, love/hate, and so on. One strain of these conversations involves the reason for Microsoft's success. Some claim that the firm was just lucky (the MS-DOS deal with IBM, for instance) or could only succeed by breaking the law. Others believe that the company has succeeded purely on the basis of superior products (my good friend and ex-MSFT guy Rich Barrett holds this view)or hard work (as Steve Jobs said, "I have no problem with Microsoft's success. They've earned their success ... for the most part.").

While I think all of these elements play a role, I actually think that a big chunk of Microsoft's success comes down to two words: continuous leadership.

It's true. Bill and Steve have been running the company since the beginning, and there's simply NO way to replicate the depth of knowledge they have of the industry, Microsoft culture, and the company's strengths and weaknesses. These guys know where the bodies are buried and the secret combination to the vault. They know who gets things done, who has good ideas, and what's incubating in the farthest reaches of the business. They also have a depth of knowledge of the competitive landscape (both obvious and not-so-obvious threats) that makes for better decision-making.

Most tech companies blow it when their leadership changes. Apple got torpedoed when Sculley came in (and, interestingly, reversed itself only when Jobs - the Apple parallel to Bill - came back). Palm got hit when the founders left for Handspring. Novell has had a revolving door of CEOs for a while (and Eric Schmidt's presence and success at Google clearly indicates he had the chops, but that the Novell culture probably couldn't be managed by an outsider). When there's a change of leadership, it opens the door to a stumble.

All of this is a long, long preamble to my ultimate point: for all this success and wealth of knowledge, Bill Gates seems like a pretty down to earth guy.

One of the (major) perks of the MBA internship program here at MSFT is unprecedented access to senior executives. The best expression of this is the annual barbecue at Bill Gates' house (yes, that house) for the interns.

Along with a number of vice presidents and senior managers, His Billness was there to talk to people, answer questions, and just chat with interns about what was on their mind. Bill, obviously, is quite a draw -- he was standing in the middle of a ring of interns, five-deep, answering questions about all kinds of topics. He was patient, friendly, joked a bunch, and didn't make anyone feel silly or look stupid.

Ballmer recently sent a memo to the company, which was followed by a Q&A session for employees that was then Webcast. BillG and Steve took questions from the audience and by e-mail. Some of the questions were direct and difficult. Both guys were willing to take the time to follow up with every point - even one guy, who had so many questions about the stock price that Ballmer digressed into a quick tutorial about the Black-Scholes Option pricing model. With a smile. =)

During the Webcast, Bill was every bit as engaged and engaging as he was in person. I don't get the impression that it's an act. Further, both he and Ballmer were willing (and able) to zoom down to a super-granular level of the business when necessary.

30 years' experience in the software industry - and a willingness to listen to the new, young guys and gals around you - is one hell of a competitive advantage.

(Oh, yeah -- the house is awesome. And so was the food.)

UPDATE, November 18, 2005: One or more of the original hyperlinks on this page expired, and has been dereferenced. The hyperlinked text is now underlined.

Posted by Gavin Shearer at July 14, 2004 9:24 AM. Posted to MSFT.

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