A couple of years ago I wrote

A corporation isn’t an entity at all. It’s a group of people, with shared values, all moving in the same direction, united in a shared vision and their efforts to reach a common goal.

Lou Gerstner, who remade the culture at IBM, most famously said,

I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game.

The culture continued to change when Sam Palmisano took over.

…the biggest breakthroughs are a result of changing the business model and the processes and the culture.

Microsoft’s Steve Ballmer learned the hard way that culture can’t be changed by edict, whereas Satya Nadella’s approach succeeded.

Over the last year, 110,000 strong Intel has been changing under the leadership of Robert Swan, who considers the cultural change necessary for its survival.

Its culture badly needed an overhaul, and its 110,000 employees needed to confront issues more openly.

“If you have a problem, put it on the table,” said Mr. Swan, 59, who was promoted to the top job a year ago and has since embarked on a campaign to shake up the Silicon Valley giant.

His efforts remain a work in progress. But the changes — some of which lean on the precepts of Andrew S. Grove, the former Intel chief executive who coined the credo “Only the paranoid survive” — are Intel’s biggest attitude adjustment in decades.

The underlying cause is the same as Gerstner and Nadella faced at their companies: complacency.

Complacency, from years of dominating their markets, and silos, from internal distrust and myopic communications.

Intel was the same.

Intel also had deeply rooted problems reflecting its years of dominance, Mr. Swan said. Managers, complacent about competition, battled internally over budgets. Some of them hoarded information, he said.

These are the same problems that companies of all sizes face.

No matter how dominant times change and competitors can seize the day.

While success is often seen as a case of “us” vs. “them” it’s crucial to remember that “us” includes customers, partners and all parts of the company.

Image credit: Aaron Fulkerson

It’s said that people don’t leave companies, they leave bosses, but now and then it’s the top bosses, the ones who control the culture, who create the circumstances that incite an exodus, as opposed to an immediate manager.

That’s what’s going on at Google, according to James Whittaker, who left Microsoft for Google and then left Google to return there.

The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus.

Googlers have left because of harassment, retaliation, various governments’ contracts/projects, treatment of contractors, and other ethical considerations.

Google’s bosses are also some of the biggest hypocrites in tech. Worse even than Zuckerberg at saying one thing while doing the opposite covertly — especially something that negatively affects the entire planet, not just people’s privacy.

Despite making noises about becoming more environmentally friendly, Google has been quietly funding organizations which say climate change isn’t real [emphasis mine].

Fortunately, all the clandestine stuff keeps surfacing and people are coming to the realization that Google is anything but benevolent.

All these things fall under the culture umbrella.

A culture controlled by Google bosses.

Image credit: Nguyen Hung Vu

Poking through 13+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

Last week’s look at the “new” Microsoft reminded me of a previous post that’s especially apropos in light of unicorn valuations crashing headlong into the reality of investor focus on profitability.

Read other Golden Oldies here.

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Neither market cap nor valuation are cause for celebration.

Both are as ephemeral as morning fog.

Ask Microsoft CEO Satya Nadella his reaction when Microsoft became the most valuable company in the world for a few months last fall.

“I’m not one of those guys who says, ‘let’s celebrate some market cap measure.’ That’s just not stable.”

What does interest him?

The Microsoft-generated ecosystem.

“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” he said.

This dovetails with what Bill Gates also believes, i.e., a company’s success is defined when the total value of the ecosystem around it is more valuable than the company that created it.

That ecosystem seems non-existent to the majority of founders of gig economy businesses, dating apps, social media, etc.

Or perhaps it’s just those with venture funding who are focused on growth at all costs.

That said, this post is dedicated to the founders who focus on building sustainable businesses/ecosystems.

As opposed to the fools who chase investment in lieu of revenue, celebrate valuation based on their last round of funding, and don’t care about ecosystem beyond its PR value.

Image credit: HikingArtist

As quoted in yesterday’s Golden Oldie, Columbia law professor Tim Wu said, Convenience and monopoly seem to be natural bedfellows.

His premise is that the more convenient something is, e.g., Amazon, the more likely people will gravitate to it, rather than trying something new.

Think about it.

Amazon. Facebook. Google. Microsoft.

Over the years, many companies, from startups to giants, have challenged them and have either been bought, bankrupted or buried.

Either can be a solution when your resources are almost unlimited, whether the money is spent on acquisition or increasing convenience.

Simple as 1-2-3-4

More convenience = stronger addiction = fewer competitors = greater monopolistic actions.

So the next time you find yourself concerned or complaining about the power of big tech try looking in the mirror for its source.

Image credit: Alena Navarro- Whyte

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Neither market cap nor valuation are cause for celebration.

Both are as ephemeral as morning fog.

Ask Microsoft CEO Satya Nadella his reaction when Microsoft became the most valuable company in the world for a few months last fall.

“I’m not one of those guys who says, ‘let’s celebrate some market cap measure.’ That’s just not stable.”

What does interest him?

The Microsoft-generated ecosystem.

“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” he said.

This dovetails with what Bill Gates also believes, i.e., a company’s success is defined when the total value of the ecosystem around it is more valuable than the company that created it.

That ecosystem seems non-existent to the majority of founders of gig economy businesses, dating apps, social media, etc.

Or perhaps it’s just those with venture funding who are focused on growth at all costs.

That said, this post is dedicated to the founders who focus on building sustainable businesses/ecosystems.

As opposed to the fools who chase investment in lieu of revenue, celebrate valuation based on their last round of funding, and don’t care about ecosystem beyond its PR value.

Image credit: HikingArtist

Typically, I don’t use this space to vent my personal rage, but I am today and the focus is Skype.

I’m also ranting late in the game, since the cause of my rant happened summer of 2017.

I kept hoping they’d fix it, which just goes to show what happens when optimism overrules common sense and experience.

It used to be great, but the ground up redesign…stinks is the most polite term I can think of.

Of course, it’s not just me, look at the 295 reviews at Consumer Affairs or The Verge article (or dozens of others), but all I read talked about their using it on their phones.

I use Skype chat on my laptop daily to work with colleagues in Russia. It’s business, not social.

I wondered why (I always wonder ‘why’.) Microsoft so totally screwed it up.

I found the answer in the Digital Journal.

As set out by The Next Web, the bulk of the criticism lies in the decision to reinvent Skype as a social-first app. Skype’s old focus on chats, calls and professional communication has been dropped in favour of building an all-out Snapchat clone for younger users.

No wonder I didn’t understand. I’ve never used Snapchat and certainly don’t qualify as a “younger user.”

Sadly, none of the updates since then have fixed anything.

You would think Microsoft would have at least some respect for their business users.

The reasoning and the action is what I would have expected from Steve Ballmer, but not from Satya Nadella.

If nothing else, you’d think they might, at least, have heard the adage “if it ain’t broke don’t fix it.”

Image credit: Logoworks

Last fall I asked if the 1099 economy might crash and burn considering the IRS rules governing freelancers and contractors.

I think that companies, like Uber and Instacart, etc., whose success is built on the basis that their workers aren’t actually employees are in for a shock one of these days.

But it’s more than my opinion.

Way back in 2013 a group of strippers brought a class-action lawsuit claiming employee status — and won.

Rick’s, a chain of “upscale adult nightclubs serving primarily businessmen and professionals” based in Texas, argued that its dancers were independent contractors, more akin to stand-up comedians than fry cooks. But Judge Engelmayer was not persuaded. He said the list of rules Rick’s laid down could be described as “micromanagement.”

Rick’s provided “Entertainer Guidelines,” including required heel height and when to strip; the company also set prices.

Uber tells its drivers what to wear, car requirements and sets prices, as do other 1099 employers.

One day soon, a few fed-up drivers are going to file suit and their lawyers will likely cite the judgment against Rick’s.

When that happens, compensation will change, as it did years ago with Microsoft’s contract developers (who were also awarded stock retroactively), and, hopefully, the playing fields will be leveled.

I, for one, am looking forward to it.

Image credit: HeadOvMetal

What separates success and failure for new CEOs?

Some crash and burn, like Robert Nardelli and Apple retail chief Ron Johnson when he moved to Penney.

Others flourish.

Since becoming CEO at Microsoft, Satya Nadella has made revolutionary changes in both products and culture that would/could never have happened under the old regime and the stock is up 53%.

The world said that Apple under Tim Cook would be mediocre or even fail; it was assumed that no one could follow Steve Jobs. But in the three years April since Cook took the reins Apple split 7:1 and more than doubled its stock price.

What do these pairs have in common?

Culture.

Nardelli and Johnson were both outsiders who lacked interest or understanding of the existing culture. Both tried to use brute force to radically overhaul the existing culture and both failed miserably.

Nadella and Cook were both insiders; Cook was with Apple 13 years, while Nadella had 24 at Microsoft, and so far both are succeeding brilliantly.

Does this mean CEO jobs should always go to insiders?

Absolutely not.

Does it mean that changing the culture is a bad idea?

Absolutely not.

Lou Gerstner was an outsider who radically changed the culture at IBM.

And he sums the lesson up best.

“I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game.”

Flickr image credit: Jeffrey

I was never impressed with Steve Ballmer when he headed Microsoft.

I didn’t follow him closely, but based on what I read/heard he seemed opaque, bombastic, prone to management by edict and incredibly arrogant.

I could have missed it, but I never heard Ballmer admit a mistake, even with a debacle like Windows 8.

Admitting errors or missteps, being vulnerable and being open to saying “I don’t know” are all signs of a secure executive.

So far, that description seems to fit Satya Nadella, Microsoft’s new CEO.  

There are three things that we are thinking hard about when we think about Windows moving forward. We have to nail the user experience. It doesn’t mean one user experience for all form factors but consistency that makes sense when using any one of those devices. Let’s face it, we got some things wrong in Windows 8, and I feel very good about the progress we’re making, especially for Windows 7 upgrade into Windows 10.

The next area we’re thinking about is the IT component. Getting identity packaging, device management and data security right.

Lastly, the developer. We will have the Universal Windows Application platform.

That’s a far cry from the old Microsoft that built what they wanted, arrogantly assumed that everyone would love it—and wouldn’t back down when they didn’t.

Of course, no matter how smart or mindful people still end up with their foot in their mouth as Nadella did at the Grace Hopper Celebration of Women in Computing.

Mr. Nadella, the chief executive of Microsoft, suggested on Thursday that women who do not ask for more money from their employers would be rewarded in the long run when their good work was recognized.

Oops, not something that would ever be said to a man; actually, not the smartest comment anytime, let alone now, with the spotlight on the way women are treated in tech.

Twitter, of course, lit up.

But Nadella didn’t waste time before he said he was wrong and he didn’t dance or minimize.

“Was inarticulate re how women should ask for raise,” he wrote in a Twitter post. “Our industry must close gender pay gap so a raise is not needed because of a bias.”

Mr. Nadella went further in an email to Microsoft employees on Thursday night, saying “I answered that question completely wrong.”

He added: “If you think you deserve a raise, you should just ask.”

Secure bosses know when to back down.

And when to say, “I was wrong.”

They know when showing vulnerability is better than pretending invincibility.

They are willing to say ‘I don’t know’ and listen to whomever has the information.

They don’t always need to be right.

Flickr image credit: BK

Microsoft has done a lot of dumb things over the years and they haven’t stopped yet.

A recent ad campaign for Windows Azure implied it was “so easy, even an older woman can do it.”

This on top of an earlier tweet from @WindowsAzure.

“What do you do when your 68-year-old secretary needs Active Directory Multi-Factor Authentication? Ask Dear Azure.”

Social media wasn’t happy and Microsoft ended up apologizing for its “poor judgment.”***

However, Microsoft’s apology doesn’t cut much ice when viewed in light of the dynamics that drove/are driving the development of Windows 8.

According to a person who claims to be on the Windows 8 design team this is the thinking behind Metro.

It’s designed for your computer illiterate little sister, for grandpas who don’t know how to use that computer dofangle thingy, and for mom who just wants to look up apple pie recipes.

I have a low opinion of Win8 based on hearsay and the bad reviews I’ve read, but that’s beside the point.

Assuming what the programmer shared is even relatively accurate it shows that the ad was more business as usual than an error in judgment.

It reflects a corporate MAP (mindset, attitude, philosophy™) grounded in the C suite and begs the question of whether it will continue in a world sans Ballmer and Gates.

***In fairness, Geek Feminism says this gaff is common.

No phrase expresses the meme of female technical ineptitude more neatly than “So simple, even your [grand]mother could do it.” This is a very commonly encountered form of condescension.

Flickr image credit: Metassus