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.

CEOs screwing up their company culture isn’t new. And, one way or another, CEO ego is usually the cause; what differs is what they do now vs. then. Before, it was rotten decisions based on dinosaurian mindsets coupled with a god complex. Now the screw-ups tend to be grounded in rotten decisions based on hard-to-believe immaturity coupled with a god complex.

Read other Golden Oldies here.

Edicts by Steve Ballmer and tweets by David Sacks do not a culture change.

Changing culture doesn’t happen overnight and takes a lot of damn hard work.

But it can be done.

And for CEOs willing to take the time and do the work, the payoff is ginormous to the 10^th power and goes well beyond money — for the company, the employees, stakeholders and last, but certainly not least, for themselves.

Just ask Satya Nadella or Lou Gerstner, who turned around IBM and said it best.

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

On a funny, or should I say ironic, side note.

As I looked through past posts and articles I realized how similar in name Nadella is to his complete cultural and managerial opposite, [Robert] Nardelli.

Separated by two letters and a mental chasm that dwarfs the Grand Canyon.

Flickr image credit: jphilipg

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

Looking at founders, such as Larry Page, Jeff Bezos and Mark Zukerberg, you get the feeling they believe they are all powerful — more so than even governments.

It’s not a new attitude; Bill Gates learned they aren’t the hard way.

The Microsoft co-founder Bill Gates, according to Mr. Smith, “learned that life actually does require compromise and governments actually are stronger than companies,” if only after a bruising confrontation.

Mr. Gates, who wrote the foreword in Mr. Smith’s book, recalled that for years he was proud of how little time he spent talking to people in government. “As I learned the hard way in the antitrust suit,” he wrote, “that was not a wise position to take.”

Lesson learned well enough that you don’t see Microsoft on the common list of big tech, Google, Facebook, Amazon, and Apple.

That lesson hasn’t hurt Microsoft, which is valued at more than a trillion dollars by investors based on profitability, not funding.

Satya Nadella, who became CEO in 2014, is credited most often for the change in Microsoft fortunes, i.e., its culture. attitude and product mix.

You don’t hear as much about Microsoft president Brad Smith, but he’s the guy who made friends with government and helps with policy.

“When your technology changes the world,” he writes, “you bear a responsibility to help address the world that you have helped create.”

Responsibility.

The thing that so many founders don’t see as being within their purview.

Unlike Microsoft, their future will be decided more in Europe than in the US.

But the revised interpretation of an old US law could change things drastically.

And that change is being driven in by a surprising source.

Join me next Tuesday to learn more about it.

Image credit: luquidat

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

Edicts by Steve Ballmer and tweets by David Sacks do not a culture change.

Changing culture doesn’t happen overnight and takes a lot of damn hard work.

But it can be done.

And for CEOs willing to take the time and do the work, the payoff is ginormous to the 10^th power and goes well beyond money — for the company, the employees, stakeholders and last, but certainly not least, for themselves.

Just ask Satya Nadella or Lou Gerstner, who turned around IBM and said it best.

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

On a funny, or should I say ironic, side note.

As I looked through past posts and articles I realized how similar in name Nadella is to his complete cultural and managerial opposite, [Robert] Nardelli.

Separated by two letters and a mental chasm that dwarfs the Grand Canyon.

Flickr image credit: jphilipg

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