Tech company executives are some of the most-watched and most talked about business leaders. It's just more interesting to watch the career trajectory of someone who wasn’t necessarily groomed from birth to work a room or lead thousands of employees take the helm at a giant, exciting company. Whether it’s the obsessive college dropout who built an empire or the brilliant engineer who joined a future tech powerhouse at the ground floor, we love to examine the implications of how they build corporate culture and loyal customers.
Poor Steve Ballmer, Microsoft’s lame duck leader. Ballmer has been picked apart in the news this week following his retirement announcement last Friday. As CEO, he had to fill the shoes of the man who was much more inspiring and appealing —Bill Gates, the philanthropic nerd hero, the most famous Harvard dropout, and Microsoft’s founder. For most of the past decade or so, Ballmer was the much less cooler of the bald guys named Steve heading up global tech companies.
Ballmer, as a business-minded executive and not a tech-savvy developer, was biased toward the tried-and-true money-making areas of Microsoft’s model, such as the Windows platform. He didn’t understand the slow and expensive road of product development, and it cost Microsoft in influence, reputation, and revenue and income.
Ballmer was instrumental in slowing down a number of digital consumer products that could have been huge as soon as he perceived they were sucking resources away from “sure things,” and Microsoft’s competitors took the opportunity to jump in front of consumers first.
(As an avid and dedicated Market Street Report reader, you probably already know where I’m going with this. Obviously I’m building up to an analogy between Steve Ballmer’s corporate culture and short-sighted approaches to economic development.)
While Microsoft pioneered tablet and mobile music technology, they didn’t invest enough in developing these into consumer products to take to the market. Apple broke out with the iPod and iPad, leaving Microsoft trying to play catch up later with lackluster devices. When Microsoft launched its Zune device in 2006, Apple had already sold nearly 100 million iPods. Ballmer stalled expensive but necessary Xbox product development, starving it out to feed more profitable business lines, while Sony put in the serious cash for its PlayStation and game development studios.
Microsoft still dominates the declining PC space, but people don’t do all their computing on PCs anymore, especially in rapidly expanding global markets. The one Microsoft product that many consumers have to use—Windows—isn’t compatible with popular Apple and other non-PC devices and services. Meanwhile, app developers showed little interest in building apps for Microsoft’s tablet, the Surface (debuting two years after the iPad). There are many more examples of the mismatch among Microsoft’s priorities under Ballmer’s leadership and what consumers really wanted (in many cases before they even knew they wanted it).
In economic development, the community itself is the product—the quality of life, the skilled and diverse talent, quality of career and advancement opportunities, the look and feel of the community, and the relationships between dynamic ecosystems that drive innovation, education, and business. A weak attempt to develop any one of those assets isn’t going to put you anywhere near the league of the communities in the enviable position of balancing quality job growth, skilled worker growth, and investment.
The traditional areas are still very important—established business sectors, land, site selector relationships, incentives, and taxes. But the communities that don’t also understand and pay attention to their product and where they can carve out a new niche using partners and plans are not going to be able to develop and grow the long-term workforce and assets that are looking at factors other than cheap land and tax breaks. Perfunctory or half-hearted downtown development and small-scale and limited business-education partnerships aren’t going to break your community’s product ahead of all the other places clamoring for attention.
When he shunned the Xbox risk, the issue wasn’t so much that Ballmer wasn’t himself a gamer but that he perhaps never tried to grasp the vision of where the gaming industry was headed and how Microsoft could play a role in that. In many cases, Microsoft already had the capacity or the breakthrough that could have given the competition a run for their money—but they just didn’t recognize, resource, and harness it. What a fine allegory for community, economic, and workforce development.