Resolve and Fortitude : Microsoft's ''SECRET POWER BROKER'' breaks his silence (42 page)

When formulating a strategy, I tried to mimic the way the Prussian generals wrote their orders. Clarity and brevity needed to trump all. The order for the invasion of Normandy was communicated on 133 pages. No soldier could possibly remember all of its details or repeat the order in its entirety. It read like a cookbook—prescriptive, leaving hardly any room for independent thinking though plenty for bravery. The German attack plan for the Netherlands in WWII was contained on four pages. The American general Omar Bradley did even better when he formulated the instructions for Cobra the breakout out of the Normandy theater on just one and a half pages. The ones who needed to recall them verbatim could easily recite them anytime. My annual OEM business plans—developed by six to eight people at most—were presented on less than four pages. I preferred two! Crisp and clear. People knew exactly what to do, kept key objectives in their heads, and understood the elbow room they had.

When presenting annual plans to a larger audience, I nailed the core issues down onto PowerPoint slides containing only five objectives. I always told the attendees that if we achieved just the first three 100 percent, we would be heroes. Each objective was followed up with a slide containing five key implementation points. Again, the first three being sufficient to follow through and the last two, if completed, were the icing on the cake. I never fooled myself: most people can only keep three things in their heads at any one time.

I never forgot that the success of MS’s OEM business, and therefore, my own depended on a successful team. Nothing motivates a team more than being empowered. I extended my trust generously—letting go. As a leader, you set the pace and the expectations. Ambitious challenges make people follow you. People get bored and lazy when the yardstick is set too low. I was always honest with them when evaluating their performances, understanding they hated conciliatory or mollifying judgments.

There is no need to know everything that goes on in an organization. First of all, you can’t, and last but not least, you shouldn’t; it distracts from your aim and makes you a spymaster instead of a leader. Trust and knowing all show no positive correlation. Putting people under a microscope does not help them grow! Auftragstaktik does. Order them to take the steepest hill without detailing the terrain. That is how they learn to follow you.

Once upon a time, one of my business managers sent me an e-mail while on the road, asking for a decision. To make my life easier, he listed two options. A and B. I was known to formulate even shorter e-mail answers than Steve’s supertight telegram style provided. In this case, it was just a single word. “Yes.” Unsure, he consulted with my admin. Nothing unusual—a lot of people did after receiving a handwritten note. Only she could decipher my physician-style writings. Now she was asked to interpret my cryptic and ambiguous response. Her prompt advice: “He means A. He did not bother with B after finding option A OK to implement.” The oracle of Delphi had spoken, and her advice was abided by. The actual truth was quite different. I did indeed read both options proposed and decided to leave the decision to my business manager. No babysitting needed with neither option a bad suggestion. Smart guy he was—why would he posit his second choice first?

As fiscal year ’01 ended and I prepared to depart the OEM division, I found a copy of an old PowerPoint presentation on my home PC, the one I had given to the board outlining my ten-year-old business projections. Reviewing my old forecast, I asked my controller to find out how much Windows business had been pulled in by the enterprise division, and as we added these numbers to ours, we had a nice surprise. The combined revenue figures exceeded my now-ancient predictions by approximately half a billion dollars. I felt super good about the astonishing result. Having produced best-case scenario results, I had not let the board down.

That June, I attended my last annual group meeting in Las Vegas, Nevada. We stayed in a hotel outside the main city center and, in good old OEM fashion, combined the nightlife and a visit to the fabulous Siegfried and Roy show with team-building exercises, including a challenging hike through the local mountains. An excursion to the Grand Canyon ended for me in an incredible and terrifying helicopter flight so I could catch the flight back to Las Vegas. The annual awards dinner the same evening promised to be special and, for the first time, even a black-tie event—just to honor me. I appreciated the gesture, but deep down, I resented the ensuing formality, and my crew knew that very well. Nevertheless, they had a terrific time roasting me. Bill and Steve were present by video; my friend Richard Fade had made sure of it. The session brought a warm wash of sentimental tears in my eyes. The remembrance was truly funny, rewarding, and a good snapshot of my time leading the team. Except I had the last word, and this was how I addressed the assembly of my battle-hardened cohorts with a quickly prepared handwritten farewell speech:

My dear friends and comrades in arms, I would have loved to finish fiscal year 2001 way above budget. It just did not happen. The economic downturn caused by the bursting dot-com bubble denied us this last feat.

After nearly fifteen years, I hereby pass the scepter of my beloved OEM division onto Richard Fade. You will be in good hands. Let me remind you what I said when announcing my retirement last December: “OEM has never been a one-man show—OEM is a well-fused and oiled team.” With the incumbent fighter or better resident rebel moving on, he can help you no longer; good or bad, only the future will tell! Tears, regrets—not me. The only thing which bugs me is losing my trusted team.

While learning a lot in all those years and giving a lot at the same time, trust and empowerment have been the pillar of our working relationships. Paired with forward-looking thought leadership, they were the main forces helping us to achieve the incredible and unthinkable we daringly set out to confront and achieve. Trust, in particular, will remain the foundation for our customer relationships long after I have gone. Without, none of the bonds we created could have held together in challenging times and to the better of PC users and the entire IT industry. Just listen to some numbers:

During my time, we sold 60 million pure DOS licenses, over 520 million Windows copies, nearly 150 million little critters, brought in $40 billion in revenue, and made a lot of shareholders happy with nearly $25 billion in profit before taxes. In addition to the traditional OEM business, we built a by-now $150 million CE business and an astonishing $1.5 billion system-builder business the subsidiaries have envied and loathed us for. Unfortunately, most people who did the hard work and made that business a roaring success no longer reside in our group; nevertheless, let me salute them for their great effort and dedication to our cause and how vigorously they fought the pirates on the high seas.

Why did we win that impressively? We understood that striving for uncompromising product excellence and tenaciously building and defending market share could enact a self-accelerating economy of scale. If our competitors would have understood this better and attacked us earlier in the game, designed better OSs, and recruited a higher number of independent software vendors, we would have had a much harder time succeeding. We worked hard and played hard; with me around fun, was always part of the equation, and because of the lucky stars we were operating under, all of us eventually got rewarded. Seriously, where are our competitors now? They are all history, eating our dust as we left them behind on the various battle fields:

DRI / Novell / Caldera, Lotus, WordPerfect / Corel, IBM, etc.,
etc., etc.

In summary, let me say thank you for helping me to shape the spirit of this division. Give yourself a great applause for all your accomplishments. They are by no means mine alone. Let me finish with what General McArthur said about soldiers leaving the army: “Old soldiers never die, they just fade away.” With all my heart, I wish you under Richard’s leadership a lot of success for years to come, promising you two things in parting: I won’t get bored and—and just in case you are afraid—I won’t come back. Good-bye and good luck.

As I climbed down from the stage under roaring applause, Richard Fade, in his tuxedo, rushed toward me, shook my hand, and thanked me for what he called “a nice passing of the flag.” Both a bit teary, we looked at each other, and before I could respond, he frankly admitted, “JK, you will be a damned tough act to follow!” With a big encouraging grin on my face, my prompt response was straightforward: “If anyone can do it, you can!” And just as I started to turn around, he addressed me one more time, smirking: “Hm, already retired?” He must have just now recognized that I was the only guy in the room wearing khaki to make a point. A tux has never and will never be a preferred outfit for me. Amen, be true to yourself to the last second!

When leaving my post after eighteen years of holding key executive positions, I took a treasure trove of experiences away with me. Something the company did not want to lose right away. So I found myself with a new assignment helping to redefine MS’s Linux strategy. Steve referred to me as his Linux czar. The press got hold of this new moniker and leaped into reckless speculation over my ensuing evildoings, my personal life, and any other available gossip someone could dig up. My scant familiarity with Linux and the closeness of my final exit did not warrant any of this.

While running OEM, I had observed the progress and success of Linux astutely from a distance. For Steve, wanting to gain ground for our PC-server business, Linux was a much bigger thorn in the hide of MS’s galloping ambitions. By ’01, Linux had gained an undisputable foothold in the server arena as the new concept of
blade computing
took hold. These are stripped-down servers on a single board deployed in clusters and connected up through specially designed mounting racks to increase raw computing power for data centers. Linux, a lean, adaptable, and modular OS with a small footprint, was ideally suited for such application. By comparison, MS’s monolithic NT servers were deemed too large, harder to maintain, and neither dependable nor secure enough. Our server group was deeply humiliated by these attributes and tried a variety of avenues to inhibit Linux’s breakthrough. Immune to the usual tricks our marketers flourished, the volunteers fearlessly stood their ground—like minutemen under British attack.

After careful perusal of the complex Linux situation, I came to several conclusions: Linux will continue to be attractive for certain server applications for at least the next five to ten years. Hardest to predict was how genuine of a threat and at what time a move to the desktop might occur. There were several strategies available to combat its progress. My challenge in my new role as a consultant was how to effectively influence MS’s actions. A tough assignment considering this was a company in transition. One that was drifting into some kind of migratory listlessness and questioning the fierce collective passions that once had catapulted her to exhilarating new frontiers.

We could not use a direct, head-on strategy to win. As mentioned before, we had a respectable offering but no means a cutting-edge solution. Convinced that we could eliminate our disadvantages over time, a pure containment strategy could not be pursued either. For that to succeed, we would have needed a reputation of hitting launch schedules dead-on and having the resolve to create a considerable leaner, meaner, and supermalleable NT version targeting blade applications at a reduced price. With price being the lesser of an issue, I discovered no appetite to do the needed development work. With inertia ruling our immediate culture, MS’s development nerds just continued to add features. Lack of former competitive vigor, induced at least in part by our legal quagmire, was another hindrance. An indirect strategy would have worked only if we had an ace up our sleeve. Changing the ground rules on Netscape had allowed us to eventually win the game with higher integration and through buying time until other tech advancements became available. Not obtainable for Windows server, it seemed. A strategy of peaceful coexistence, another viable option, ran counter to our former cultural belief system but was what, at the end, roughly evolved. I came to the conclusion that we needed to apply several of these options over time to counter Linux on the server and prepare for a desktop assault. Complicated to execute, and hard to convince the MS’s marketing and development folks of.

Starting my new assignment, I immediately felt a power gap. I had no direct reports, no marketing budget, zero staff, and hardly any admin support. I suddenly had to deal with dozens of uncontrollable cooks in different parts of the development and marketing kitchen. A lot of them pursued their own ideas and were not accustomed to listen to or follow an outsider. I had led an effective and well-oiled team who respected me for my judgment and joined accomplishments. In my new position, deference was in short supply, replaced by a surfeit of egos, each knowing more than the next and probably in need of a lesson in effective team play and discipline. With the company in legal jeopardy, the former speed-of-light velocity downshifted to one of cautious circumspection, not a terrific prerequisite for winning against courageous, inspired volunteers. Public image and avoiding questionable publicity were more important than winning with unpopular measures such as suing over patent infringements.

Having no track record with this new group, I came up short. Failing an assignment wasn’t commonly found in my resume. I admit I early on lost the drive to sort through a labyrinth of diverting opinions and was tired of the political gamesman ship now required to succeed. Despite being offered a bonafide nonconsultant position, I left the company at the end of 2002 at last. This chapter of my life was closing, and after all I had accomplished in OEM, I knew I could no longer top my career in this by-now transformed company. I had better plans for continuing an active life. My professional phase was over, and a new cycle of the private Joachim Kempin was about to begin. I never regretted my decision and still very much enjoy my life after Microsoft.