Ballmer on leadership

"I believe that good leaders will...adapt themselves to whatever situation they face," says Microsoft CEO Steve Ballmer.

by Knowledge@Wharton
Last Updated: 23 Jul 2013

"Leadership requires a heavy degree of personalisation. A lot of lessons are valuable, but what's probably more valuable is hearing people talk about their own experiences and doing your own model."

But there's one characteristic that is "universally applicable to anyone who wants to be a leader," according to Ballmer. "You've got to love what you are doing."

Ballmer spoke at the Wharton Business School the day before Microsoft's recent launch of its Windows Vista operating system in New York City. The launch was the latest in a series of product introductions for the software giant, including a new version of Office and the Zune music player. Ballmer told the audience that when he joined Microsoft he wasn't a computer expert, but he developed a passion for Bill Gates' vision to put a computer on every desk and in every home.

Microsoft, he said, "spoke to this notion [that] most people [want] to have some kind of grander purpose to what they are doing. And yes, it's about a career and yes, it's about taking care of family and yes, it's about winning…but, generally, people want to know that there is some bigger, more important thing out there worth really striving for."

It is the role of the leader to communicate what the real purpose of his or her organisation is, Ballmer said. "If you really want to inspire people and inspire their passions, you have to appeal to them in some way that is a little less generic than, 'Hey, it's good for the company. The company can earn a lot of money.'"

Ballmer emphasized Microsoft's strategy of focusing on the long-term. Once the company targets a market, it develops and refines its products in that market until they are competitive, he said. "If we don't at first succeed, we keep trying," Ballmer told the audience. "If we don't get what the customers really want, we keep going. It took us three attempts to get Windows right and if we had given up after attempt one or attempt two, Microsoft wouldn't look anything like it does today.

"Leaders have to set the tone that says, ‘We'll be patient.'"

He rejected the suggestion that Microsoft is not an innovative company. "Because our business is software and software doesn't run out, we have to be about innovation. No matter how you will judge [what] we have done or will do in the future, the culture, the leadership tone has got to be about innovation."

Ballmer sees two major competitors for Microsoft in the future: the open source software movement and advertising-supported software. But he believes that the threat does not come from specific companies, but from the business models represented by these two trends. "Right now, the emblem of the first one is Linux and the emblem of the second one is Google."

The question surrounding open-source software like Linux is whether this approach to software development can surpass that of commercial companies. "Will open source do a better job than a proprietary software company -any software company? It's an interesting question - not just for us, but for anybody who is interested in business. The question is, can paid, commercial people do a better job than unpaid volunteers? The answer, I think, will be yes, but we're going to have to push ourselves."

On the threat from ad-sponsored software - software that is delivered for free over the web and monetized through advertising - Ballmer admits that Google have presented Microsoft with a major challenge. "Getting the search right was actually not the hardest part of the issue," he said. "They got ad funding - they really figured that out. And now the rest of us are going to have to learn that game."

Creating a culture that is agile and innovative enough to respond to these challenges in a company of Microsoft's size will be hard, Ballmer admitted. "It's not easy to change cultures…we have almost 80,000 people working for us these days. What we are working hardest on now is agility. What does it mean to be agile in the marketplace? Agility means that you are able to turn things around, that you can invent new things and yet you still can do things that require scale, discipline and execution."

This means creating pockets of agile groups, some of which are "incredibly fast, but shallow," and others that are slower, but "incredibly deep", Ballmer said. "How you knit [together] and enable people to get the best out of all the cultural aspects in the organisation is a challenge right now."

Source: Knowledge@Wharton
Review by: Nick Loney

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