Unbound Edition. Meaningful conversations about brand, from Davis Brand Capital.



#FounderBrands: Microsoft

In its August issue, Vanity Fair charges Microsoft with losing its mojo, pinning much of the blame on CEO Steve Ballmer. While the article makes some useful and valid observations, it never completes the circle, relating them back fully to the larger, underlying issue that ails brand Microsoft: the company has strayed far from the management and proper deployment of its founding vision.

Like a lot of technology firms Microsoft is a “founder brand,” the product of Bill Gates’ brains and vision. Some of the world’s most valuable and well-known companies share this common brand trait, though it has not been explored in depth. Along with Microsoft, companies such as Apple, Dell, Ford, Google, Mars, Nike, Starbucks and Wal-Mart are founder brands. These are brands where the founder or founding family exercises significant influence over the management of the brand and direction of the business. Founder influence might come through ownership, effective voting control, management or a strong deference to history.

Gates’ founding vision might be summarized as “finding and deploying software solutions to global business needs.” A version of this continues to live on in The Bill & Melinda Gates Foundation‘s work, except that the solutions address global needs in healthcare, such as vaccinations. This founder meant to make a big impact, no matter what he did.

So, what happened? Microsoft, it seems, turned its focus from solving new problems to primarily selling existing solutions. Reaching scale requires the repackaging of valuable innovations, but not at the expense of keeping the pipeline full of new ideas.

Under Ballmer’s reign, Microsoft became a highly effective, sales-driven organization. But, what went missing was Microsoft’s founding vision, supplanted by a sales culture. In comparison, Gates’ rival Steve Jobs saw the danger in this. According to an excerpt from Walter Isaacson’s authorized biography, Steve Jobs said: “The company starts valuing the great salesmen, because they’re the ones who can move the needle…It happened at Apple when [John] Sculley came in, which was my fault…Apple was lucky and it rebounded…”

Jobs recognized the need to both protect and evolve the vision that started Apple. He understood its inherent value long term and the danger of losing sight of it. He operationalized his vision of “building insanely good product,” applying it across the organization: from company culture to product design principles. The result? Even with Jobs’ untimely passing, his vision lives on in Apple’s operations and the brand.  It is now the world’s most valuable company.

Microsoft on the other hand has lost the type of clarity that once defined it; Jobs clarity became the competitive advantage against Microsoft. To get its mojo back, Microsoft needs to get its clarity back.

Thus, it is unlikely that a refresh of Microsoft’s brand identity or even the overhaul of its business model will give Redmond what it needs.  

What Microsoft needs is absolute clarity on a current version of Gates’ vision. IBM is no longer run by the great Tom Watson, though his command to “think” aligns the complex company he built around the world. Microsoft would be well-served to have a similar, simple, unifying direction.

 

Davis Brand Capital, the publisher of Unbound Edition, is the author of “Founder Brands: Managing Intangible Assets from Original Vision to Sustained Value.” To request a copy of the white paper, please contact: founderbrands@davisbrandcapital.com



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