A Microsoft World
by David Thielen and Shirley Thielen
How do you explain the wolf to the lamb? The lamb understands that the wolf will kill. But the lamb can never understand why. By the same token, how do you explain Microsoft? Understanding Microsoft’s basic motivation is simply impossible for most people. And if a company cannot understand Microsoft, they cannot prevail against them.
Microsoft’s recent setbacks in court have temporarily obscured this fundamental fact. Microsoft can and does beat virtually every company it competes against. And most companies do not even know how to compete against Microsoft. The critical point here is that Microsoft will continue to win, taking market after market, as long as their competitors continue operating in the same old, ineffective manner. Microsoft will not be wished away.
Everyone talks as though Microsoft was just another company that happens to be a bit more successful than most. A bit luckier than most. And a bit more ruthless than most. However, it’s more than that. Operating just a little bit better and being a little bit luckier does not turn a two person start-up into the most highly capitalized company in just 20 years. And if ruthlessness is the key, why doesn’t the Mafia run the top companies in the country?
The key difference is Microsoft’s management and culture. It is not a little different from most companies. Rather, it is a revolutionary change in management. And the advantages this change confers are so substantial that Microsoft is almost pre-ordained to continue to win in market after market.
This bears repeating. Companies cannot compete successfully against Microsoft by continuing to practice business as they have in the past. And for all the talk of change in the business community, what has been done by most companies has not been to change their fundamental approach to business but rather to tinker with pieces of it.
No matter how good the cause, no matter how inspired the soldiers, cavalry on horses cannot beat tanks. Most companies are sending people out on horseback to be slaughtered by the Microsoft juggernaut.
So let’s say the government breaks Microsoft into 4 baby-Bills. And each then is free to go their own way. (A move we are in favor of.) Then every other company is facing not 1, but 4 companies with a highly evolved management system and culture. And each baby-Bill will head in it’s own unique direction. Every other company out there will be facing more, not less, competition.
A break-up assumes that Microsoft gained it’s position through market domination. But 20 years ago when it was just Bill and Paul, we don’t think they had much dominance, or even much of a market. A break-up takes away none of Microsoft’s significant advantages and would rejuvenate it because it would, for the first time, face competition every bit as good as they are themselves.
So what is Microsoft’s revolutionary change in management? Well, there’s a lot to it; much more than can be covered in this short piece. (And in fact it took us an entire book to give a relatively complete picture of the differences.) However, there is one element that is both the key difference and the most difficult to get people to truly understand.
Why are most companies in business? To make money. To make a good profit and to ensure that you will be making a good profit year after year. Or at least to run the stock price up until the senior executive’s options vest.
Why is Microsoft in business? To win. To show they have won by eliminating their competition. To grind their opponents into a bloody pulp. To gain 100% of every market. And that last 1% is as important is the first 99%.
And profits are not the issue here. They don’t do this because that is the road to profits. They don’t do this while keeping an eye on profits. Microsoft is the Mongolian horde rushing out in the plains conquering all for the sheer joy of conquest. (Granted, things might change if they became unprofitable or the stock didn’t keep climbing!)
This sounds so simple but for most people it is almost impossible to truly understand. Most people, and most businesses, don’t want to conqueror. They just want to make money. They will not risk existing profits for a chance to gain new markets. They will not fight their hardest every single day to take more of a market in which they already own a significant chunk.
And as the pacifist will always lose to the bully, most companies will lose to Microsoft. Because Microsoft will not rest until it has taken every bit of every market it is going after. And companies that don’t even understand this will most definitely lose.
David & Shirley Thielen are the authors of the bestseller “The 12 Simple Secrets of Microsoft Management”
Copyright © 1999 by David & Shirley Thielen
This column may be quoted in whole or in part as long as attribution is given to the authors
David Thielen
All contents copyright © 2000, 2001 by David & Shirley Thielen All Rights Reserved.
