The obvious question given my twelve year career at Microsoft is does Microsoft ‘do the right things right’.  I actually think that one of the keys to Microsoft’s long term success has indeed been that it has achieved a strong balance between exceptional Management and exceptional Leadership.  The way it has done it has been through legendary partnership between Bill Gates and Steve Ballmer.

Bill and Steve are both renowned for effortlessly moving between the 10,000 foot, strategic and long-term view to the on the ground, operational and short-term detailed understanding.  They are both risk takers who both dropped out of school (Bill never finished Harvard College and Steve never finished Stanford Business School) to pursue the huge opportunity that they believed in.  They were also both majors in Applied Mathematics with a laser-like ability to dissect numbers making for legendary project and business review sessions where they were able to identify and pick out even the most obscure flaws in logic or calculation.

So do Bill and Steve each exhibit exceptional both ‘Management’ or ‘Leadership’ individually, or is one executive more the ‘Manager’ and one more the ‘Leader’ persona?  It is a complicated question because both exhibit both qualities strongly, but my view is that in certain contexts, they veer strongly to one mode or the other.

One of the challenges of the balanced ‘Leader-Manager’ executive who ‘does the right things right’, is that the more one ‘balances’, the less one would apparently ‘excel’ in either.  But, through partnership, two executives can push the boundaries of leadership and management while keeping the whole in balance.  But this Bill/Steve partnership is not as simple one being a great Leader and one being a great Manager.  Rather, both exhibit both qualities to a high level.  The working hypothesis that I have come to is that depending on the context (which I believe is around timeframe) the two will gravitate to one of the two personae:

                    Long Term / Strategic                Short Term / Operational

Bill                         Leader                                       Manager

Steve                   Manager                                       Leader

Bill – Strategic Leader: When it comes to the ‘long term’ opportunity, few people in business history have taken as big risks as Bill has.  Whether it was dropping out of college to build a business on the infantile personal computer technology, or betting the that the commodity microprocessors could power the biggest server workloads, or the legendary ‘turning the company on a dime’ to respond to the Internet, or taking on the dominant player in the games console market, Bill has always seen the big longer term opportunity and made massive strategic bets to pursue them.

Steve – Strategic Manager:  Steve seems to often be the devil’s advocate to these long term bets.  He is always asking questions like ‘what is the business model for this…how are we going to make money…is it really going to be that big…’  These are the questions of a ‘Manager’ concerned with the downside risks.

Bill – Operational Manager:  When it comes to day to day operations, Bill is notoriously conservative.  Despite his willingness to commit billions to long-term endeavours and his incessant bullishness about the huge opportunity for technology to add value, when he was CEO he nonetheless managed the company with a very strong eye to the many downsides that could befall the company.  While a billionaire, he flew economy as a role model for fiscal sensibility a decade before Sarbanes-Oxley made such prudence both fashionable and necessary.  When the company was really starting to thrive and people were both a bit flush and enthusiastic to celebrate, he sent out his notorious ‘Shrimps and Weenies’ memo urging modesty in the parties and ‘not serve shrimps [prawns] when weenies [little sausages] would be fine.’  He also sent out a quite prominent ‘keep your guard’ memo in the mid-nineties when Microsoft seemed to be going from strength to strength. He knocked everyone down a peg underscoring just how strong the competition was and how we could be unseated from our positions of success at any moment if we were not more vigilant than ever.  I think Bill’s razor sharp view of the downside risks in the challenging business of technology even affected Microsoft’s and his approach to the famous DOJ trial.  While many people painted him as either out of touch with Microsoft’s strong market position or else trying to pull a fast one denying it, I on the other hand feel he strongly believed his steadfast assertion that our leadership was precarious and that we operated in a hyper-competitive environment. I think he saw more clearly than just about anyone the downsides and risks that surrounded our company daily especially from the white-hot competition of eager, clever and powerful competition.

Steve – Operational Leader: Most of Steve’s career is as legendary Leader of the Microsoft sales force. He is renowned for his passion and energy to compete aggressively, win convincingly and surpass any target put in front of him.  When it comes to execution (especially in the realm of competing for and winning over customers), Steve would always see more upside than just about anyone and would pull out the stops to go get it.  For example, in the height of the DotCom frenzy, Microsoft faced myriad strategic decisions about what to do day to day in this exploding area.  At one of the management meetings, when asked for direction, his response (paraphrased here) was characteristic of the ‘Leader Executive’: “There is a saying a Microsoft that if you are 50% certain of something, do it. But I would say these days, with so much uncertainty and topsy-turvy dynamics, if you are 30% sure of something, go ahead and do it.”

Steve recently alluded to this dichotomy of approach to risk and opportunity in his presentation at the UK Institute of Directors – http://www.microsoft.com/uk/business/peopleready/overview/webcast.mspx.  He tells the story early on in the history of Microsoft when Steve first arrived where he wanted to build up the sales force aggressively.  Steve describes… “I told Bill ‘We need to hire another 17 people (we were 30 people at the time) and Bill responded, ‘Steve, I didn’t bring you here to bankrupt my company…Look I’ll make you a deal. You prove to me that you can hire one great person and we’ll consider hiring these other 17…”   This anecdote illustrates the balance achieved between the operational Leadership of Steve striving to capture the upside of sales out there ready to be secured and the operational Management of Bill making sure that the company continued to be built on a solid operational foundation with uncompromising quality.

At the same IOD speech, Steve Ballmer specifically dissected these two perspectives. He labelled it the difference between ‘sales people’ and ‘engineers’. These labels support my categorisation of Steve as a great Leader and Bill as a great Manager when it comes to nearer term operational issues.  Steve has always been clearly a ‘salesperson’ and most of his career was running the Microsoft salesforce.  On the other hand, Bill has always been very focused on the engineering side of the house to the extent that his post-CEO role was one of ‘Chief Software Architect’.  Steve describes the difference as… “The sales people say ‘come on, let’s go…we have great opportunities…let’s take the hill. The engineers are more cynical…they need to build from the reality up rather than from the hype down.”

I feel like I have just scratched the surface of the possibilities in looking at the Leadership-Management styles of two of the most prominent business executives of our time.  For better or for worse in terms of my objectivity of observation and accuracy of assessment, while I have met both Bill and Steve multiple times, I have never spent any direct time working with them and so my perspectives are indirect and from a distance.  I myself am not totally convinced that my characterisations here are entirely valid and as with any model I risk oversimplification to fit things into their boxes.  I do feel that as an organisation, Microsoft certainly demonstrates both the Leader and Manager qualities and that has been a key part of its ongoing success.  No matter how you label it, Bill and Steve have been the central, driving executive forces to that achievement.

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