Dropping the pilot

2006

There is an importance and interest to the remarkable events taking shape at Microsoft that go far beyond the company's customers, employees, investors, competitors and suppliers.

Bill Gates has announced he is to step down from the helm of his creation. However, as usual with Microsoft, the situation is not without complexity.

There's nothing inherently wrong with a founder stepping down or retreating from the limelight. It is inevitable as nobody is immortal.

Timing is the key in this kind of business strategy. If the pilot moves too early, the organisation may suffer irreparable damage. But that can also happen, and then some, if the pilot stays in charge too long.

The monopolies and associated quasi-monopolies of Microsoft have proved very largely invincible to attack from competitors, while political and legal onslaughts have proved no more than an undesired nuisance.

However, monopolies do not last. The economic and technological tides turn eventually. And that appears to be happening in the world of PCs, where Google is the new kid on the block.

Gates has allowed himself another two years to reach a successful conclusion to his business strategy. However, the question must be asked, has the battle already been lost?

Microsoft might have been the Share of the Century – in the last century. In this century, in common with other blue-chips, the stock price has refused to budge however excellent the performance of earnings per share.

Threatening all managements is the Canute Syndrome. You might believe you can turn back the tide and you might have invested years of blood, sweat and tears in establishing a great 'business model' generating growth, profits and reputation.

But come the time that investment is challenged, emotions cloud the view. You fail to see that the world has changed because you are reluctant to see it. Does this sound familiar?

Gates's business strategy to stick around 'fully committed' for two more years is perfectly understandable given all the uncertainty around. Those two years will allow him time to monitor the development of the new strategy and the performance of the people instigating it.

I believe there will be more twists to the story yet. However, the future of this excellent business will rely on dropping the pilot as it is only natural.

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About The Author

Robert Heller
Robert Heller

Robert Heller, who died aged 80 in August 2012, was Britain's most renowned and best-selling author on business management. Author of more than 50 books, he was the founding editor of Management Today and the Global Future Forum. About his latest title, The Fusion Manager, Sir John Harvey-Jones wrote: "The future lies with the thinking manager, and the thinking manager must read this book".