Leadership Matters - Comparing Ballmer to Bezos and Lessons You Should Learn

Not far from each other, in the area around Seattle, are two striking contrasts in leadership.  They provide significant insight to what creates success today.

Steve Ballmer leads Microsoft, America’s largest software company.  Unfortunately, the value of Microsoft has gone nowhere for 10 years.  Steve Ballmer has steadfastly defended the Windows and Office products, telling anyone who will listen that he is confident Windows will be part of computing’s future landscape.  Looking backward, he reminds people that Windows has had a 20 year run, and because of that past he is certain it will continue to dominate.

Unfortunately, far too many investors see things differently.  They recognize that nearly all areas of Microsoft are struggling to maintain sales.  It is quite clear that the shift to mobile devices and cloud architectures are reducing the need, and desire, for PCs in homes, offices and data centers.  Microsoft still lacks a commercially viable smartphone or tablet, and appears years late recognizing the market shift.  Too often CEO Ballmer seems in denial the shift is happening – or at least that it is happening so quickly.  His fixation on past success appears to blind him to technology use in 2014, and many investors are seriously concerned that Microsoft could topple as quickly DEC., Sun, Palm and RIM.

Comparatively, across town, Mr. Bezos leads the largest on-line retailer Amazon.  Amazon’s value has skyrocketed to a near 90 times earnings!  Over the last decade, investors have captured an astounding 10x return on investment!  Contrary to Mr. Ballmer, Mr. Bezos talks rarely about the past, and almost exclusively about the future.  He regularly discusses how markets are shifting, and how Amazon is going to change the way people do things.

Mr. Bezos’ fixation on the future has created incredible growth for Amazon.  In its “core” book business, when publishers did not move quickly toward trends for digitization Amazon created and launched Kindle, forever altering publishing.  When large retailers did not address the trend toward on-line shopping Amazon expanded its retail presence far beyond books, including more products  and a small armyt of supplier/partners.  When large PC manufacturers did not capitalize on the trend toward mobility with tablets for daily use Amazon launched Kindle Fire, which is projected to sell as many as 12 million units next year (AllThingsD.com).

Where Mr. Ballmer remains fixated on the past, constantly reinvesting  in defending and extending what worked 20 years ago for Microsoft, Mr. Bezos is investing heavily in the future.  Where Mr. Ballmer increasingly looks like a CEO in denial about market shift, Mr. Bezos has embraced the shifts and is pushing them forward.

Clearly, the latter has been fare more successful at producing revenue growth and higher valuation than the former.  Even though he moved Amazon far beyond its core products and markets pursuing trends.

Looking around, a number of companies need to heed the insight of this Seattle comparison:

• At AOL it is unclear that Mr. Armstrong has a clear view of how AOL will change markets to become a content powerhouse.  AOL’s various investments are incoherent, and managers struggle to see how AOL will compete.  On the other hand, Ms. Huffington does have a clear sense of the future, and the insight for an entirely different business model at AOL.  The Board should consider handing the reigns to Ms. Huffington, and pushing AOL much more rapidly toward a different, and more competitive future.
• Dell‘s chronic inability to identify new products and markets has left it, at best, uninteresting.  It’s supply chain focused strategy has been copied, leaving the company with practically no cost/price advantage.  Mr. Dell remains fixated on what worked for his initial launch 30 years ago, and offers no exciting description of how Dell will remain viable as PC sales diminish.  Unless new leadership takes the helm at Dell, the company’s future  5 years hence looks bleak.
• HP‘s new CEO Meg Whitman is less than reassuring as she projects a terrible 2012 for HP, and a commitment to remaining in PCs – but with some amorphous pledge toward more internal innovation.  Lacking a clear sense of what Ms. Whitman thinks the world will look like in 2017, and how HP will be impactful, it’s hard for investors, managers or customers to become excited about the company.  HP needs rapid acceleration toward shifting customer needs, not a relaxed, lethargic year of internal analysis while competitors continue moving demand further away from HP offerings.
• Groupon has had an explosive start.  But the company is attacked on all fronts by the media.  There is consistent questioning of how leadership will maintain growth as reports emerge about founders cashing out their shares, highly uneconomic deals offered by customers, lack of operating scale leverage, and increasing competition from more established management teams like Google and Amazon.  After having its IPO challenged by the press, the stock has performed poorly and now sells for less than the offering price.  Groupon desperately needs leadership that can explain what the markets of 2015 will look like, and how Groupon will remain successful.

What investors, customers, suppliers and employees want from leadership is clarity around what leaders see as the future markets and competition.  They want to know how the company is going to be successful in 2 or 5 years.  In today’s rapidly shifting, global markets it is not enough to talk about historical results, and to exhibit confidence that what brought the company to this point will propel it forward successfully. And everyone recognizes that managing quarter to quarter will not create long term success.

Leaders must  demonstrate a keen eye for market shifts, and invest in opportunities to participate in game changers.  Leaders must recognize trends, be clear about how those trends are shaping future markets and competitors, and align investments with those trends.  Leadership is not about what the company did before, but is entirely about what their organization is going to do next.

Original post from www.forbes.com

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Understanding The Engine Of Innovation: 'The Idea Hunter'

Regular readers of this blog will know that the future of individuals, organizations, and indeed the entire economy, rests on a capacity for continuous innovation, for example, in my articles, Why Amazon Can’t Make A Kindle In The USA, Understanding Apple: Five Myths About Steve Jobs and The Five Surprises of Radical Management.
Innovation in turn rests on finding great ideas and making them happen. Fortunately, we have a wonderful new book from Andy Boynton and Bill Fischer, The Idea Hunter, which shows us how. Contrary to popular belief, finding the best idea is not a matter of luck or genius. It’s about hunting for the idea in the right way.
The book shows how Walt Disney “found” the idea of a family theme park, how Apple [AAPL] “found” the idea of the iPod’s click wheel, how Warren Buffett [BRK.A; BRK.B] “finds” his extraordinary investments, how Google [GOOG] “finds” its bright new ideas, and how Sal Walton “found” the the ideas that built l Wal-Mart [WMT], among many others.

Q&A With Andy Boynton & Bill Fischer

I recently spoke with Bill and Andy about their new book.
1. Most people don’t realize that finding the right title for a book is often the most difficult part of writing a book. I really like “The Idea Hunter”. How did you hunt for this idea?
Bill: My recollection was that we were in a meeting at Boston College, in Andy’s office, looking for a way to get started (and to explain our thoughts to our writer in a way that he would understand — viscerally — what we meant). We kept coming back to a metaphor of a big-game hunter looking for “ideas” instead of animals. I think that we used the word “search” and others, but, ultimately, “the hunt” was more vivid. At one point our preferred title was “Brilliance Not Required” but the publisher didn’t like that, so we had to go back and find something else, and “the hunt” seemed to capture what we were looking for. In fact, I think that we at one point wanted only “the hunt” but “the idea hunter” is a much more descriptive title.
Andy: Bill’s recollection is correct. I know we felt the title was important in terms of getting the book some attention. I think we picked a winner. And, after we looked a few prototypes, the publisher came up with the visual for the cover which we loved.

2. Most people believe that new ideas are created. Yet you say in the book that ideas are found, rather than created. Why?
Bill: One way that we made progress, finally, on this book was to avoid defining the word “idea”. Every time that we were pressed by someone to be more precise in what we were talking about, we stalled. Our decision to avoid definition was a huge breakthrough (especially since I think that everyone knew what we were getting at, anyway!). I mention this because I feel that this question is drawing me back into that conundrum :-)  So, let me answer this in my own way.
What we’re really talking about is creating change by virtue of new approaches, or new targets, or new ways etc. Ideas are the basic building blocks of those changes. There are simply more ideas outside of your organization, my team, or my own head, than inside, so we wanted to emphasize that you should be “hunting” for those ideas, rather than taking on the burden of “creating” them yourself. A lot of “creation” is about “recognition”. We wanted to really emphasize that recognition only works well if you’re out there looking for new approaches. Out of such new ideas will ultimately come “innovations” that you might describe as “creation” but which really have a prior genealogy of their own.
Andy: From my perch, in conceptualizing the book and all of our previous executive teaching of the topic, we felt that combining existing ideas and applying them in a different context (job, business, industry, etc) was the source of innovation/creativity. Very few ideas – even the most useful ones– are novel  or original.  I think novelty is rare and reserved for a few unusual scientists. In the book, we wanted to stress the behaviorally active aspect of creativity: the “finding ideas” element of innovation is about finding ideas and repurposing them through one’s behavior. The specific behavior of course is described by “the hunt,” which we think is something that one can learn and improve over time.
3. You also say something that is counter-intuitive to most people: brilliance is not required for idea hunting. What do you mean by that?
Bill: What we found is that good idea hunters are not necessarily the “smartest guys in the room”. Often, because the smartest guys in the room are satisfied with what they know, have a diminishing regard for others and what they could possibly learn from them, and so are less open to the ideas of others (or which there are far more than their own). Good idea-hunting is more about behavior: about your willingness to search-out ideas, about where you choose to search and when, about your discipline so that such searching becomes a reliable advantage, about your willingness to commune with “weird” people in the search for a new idea. These are behavioral attributes rather than genetic ones, and so while we don’t discount “brilliance” we also don’t think that it’s a irreplaceable advantage in the search for new ideas.

Andy: I agree with Bill’s insights, and I’d like to add that IQ, or being smart, is often times inversely correlated with curiosity and appetite for learning and new ideas. The most effective professionals, managers, and leaders Bill and I have worked with were really smart and really curious about the world around them. They were avid idea hunters. But that combination is the exception, not the norm.

4. You say in the book that to become a successful idea hunter, you need to be Interested, Diverse, Exercised and Agile i.e. I-D-E-A.  How did you hunt for this idea?

Bill: That was the idea of Bill Bole, our writer, who was looking for an organizing mechanism. He originally called them “Ideattitudes” which I could never pronounce. I think that the publisher resisted our using device, but it works well as a mnemonic for what we are trying to get at.
Andy: Bill Bole came up with I-D-E-A and lots of great ideas for the book. Bill Fischer and I have long been advocates of borrowing ideas with pride (and giving due credit  to others—as we do in the book!), and we didn’t make an exception to that rule of thumb in this case. So we went with it.

5. You also say that idea hunters need to “know their gig”. What do you mean by this?
Bill: We were influenced by NPR personality Scott Simon, whose father was  a comedian and who had given him the advice: “dress for the gig you want, not the one you have.” We thought the term “gig” from this quote [more than from a simpler jazz analogy] fit perfectly with we were seeing.
For what we were “seeing”, let me use your own words, Steve, in responding to Andy’s questions. You said, in response to our question, “When do you hunt for ideas?”

“I’m tempted to say all of the above, all of the time. Ideas can come from anywhere, sometimes from the oddest places. I might be having a conversation with someone at dinner, or watching a newscast, or reading a poem, listening to my daughter talk. Suddenly I see a connection to a problem or issue that I have been puzzling about.”

This is exactly what we found all the time, with the respondents in our book! Why? Because they knew what they were looking for; they knew their “gig.” So do you! Later you speak about your latest book evolving into the “reinvention of management” and throughout your  other answers you are both finding ideas and acting [e.g., sharing information became more important than finding it] in ways that show that “reinventing management” had, in fact, become your own gig, and that this made idea-hunting easier.
Andy: In addition to Bill’s thoughts, we also felt that idea hunting with a purpose is key. This purpose is the gig. It provides the compass and the filter for ideas that matter and can be used and have value (or stored for use later).

6. What else do we need to know about idea hunting?
Bill:  I think that we’ve just scratched the surface. We need to convince managers that ideas matter; that this is a fundamental part of their leadership responsibilities, to spend time on it and define who they are. We need to think about how ideas work within teams and organizations and then put idea-hunting and idea-development into that context [which we explicitly didn't do this book, but had touched on in our book, Virtuoso Teams.] Most of all, we need to make managers aware that this is a learnable skill; that behavior trumps brilliance.
Andy: We feel ideas are fundamental to the success of every professional, manager, and leader in almost every organization we’ve bumped up against. Ideas drive progress in any organization and ideas come from people. All the executive education, knowledge management systems, organizational learning processes etc in the world won’t matter a hill of beans if people aren’t ambitious and effective idea hunters.  And for individual’s, we think their brand and value is clearly a result of the ideas they are associated with – and the quality of one’s ideas can be improved dramatically by learning how to be a great hunter of ideas. Ideas won’t find us. We have to learn to find great ideas.
The Idea Hunter: How to Find the Best Ideas and Make them Happen by Andy Boynton and Bill Fischer, with William Bole, was published by Jossey-Bass in April 2011.

Andy Boynton

Andy Boynton spends most of his time in Chestnut Hill, Massachusetts, as the dean of the Carroll School of Management at Boston College. Working daily with a terrific group of colleagues to shape a business school for the future, Andy has an opportunity almost every day to try out some of his ideas about leading and energizing talented knowledge professionals and experts.. In his spare time, he looks for new and fun projects to work on. He is active with research, writes a book now and then, and collaborates with executives in different industries on projects such as strengthening a firm’s leadership ranks, igniting teamwork, creating new strategies, and stimulating innovation in challenging bureaucratic settings.

Before coming back to Boston College (he’s a proud alum), Andy spent over ten years at the International Institute for Management Development (IMD) in Lausanne, Switzerland–simply the best executive education institute in the world–leading executive education programs and founding their global Executive MBA program. He also was a faculty member of the University of North Carolina at Chapel Hill (where he also earned his MBA and Ph.D.) and taught at the University of Virginia’s Darden School.

Bill Fischer

Bill Fischer has been hunting for ideas for a long time, in a variety of places. Disbelieving that the world is flat, he has tried to put himself into places and positions where there is a higher probability of interesting things happening. As a result, he presently is a Professor at IMD, in Lausanne, Switzerland, where among other interests he specializes in the art and practice of successful innovation, and the effective expression of talent. An engineer by training, American by citizenship, New Yorker by birth and attitude, he has lived much of his life in Asia and Europe.
Bill co-founded the IMD partnership program on Driving Strategic Innovation, in cooperation with the Sloan School of Management at MIT. He was on the faculty of the University of North Carolina at Chapel Hill for twenty years, moved to China in 1980, and was the President and Dean of the China Europe International Business School [CEIBS] in Shanghai in 1998-1999.

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Original article: http://www.forbes.com/

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