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Microsoft Rebooted: How Bill Gates and Steve Ballmer Reinvented Their Company

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An abundance of research leaves absolutely no doubt whatsoever that for an organizations to be both profitable and durable, they must constantly reinvent themselves. Obviously, the nature and extent of that process will be determined by various factors such as timing, available resources, competitive marketplace, etc. Meanwhile, like the Southwest Airlines flight schedule between Dallas and Houston, there seems to be a new paradigm every 20-30 minutes. Moreover, organizations are at various stages of transition from one paradigm to another. And meanwhile, change remains the only constant.

In this volume, Slater explains how Bill Gates and Steve Ballmer reinvented their company. Microsoft? Yes, even one of the world's most profitable and valuable companies reached a point at which significant transformation was necessary. Slater organizes his material within five Parts: The Four-Year Crisis, Emerging from the Crisis, How Bill Gates Reinvented Microsoft, How Steve Ballmer Reinvented Microsoft, and The Rebooting of Microsoft.

Slater responds to questions such as these:

1. What was the nature and extent of what he calls "the four-year crisis"?

2. Why did it last for as long as it did?

3. What did Gates and Ballmer learn from it?

4. To what extent (if any) did they disagree on what to do in response to it?

5. If there were differences between them, how were they resolved?

6. In Leading Change, Jim O'Toole has much of value to say about resistance to change. He claims that much of it is the result of what he calls "the ideology of comfort and the tyranny of custom." To what extent was there such resistance within the Microsoft organization?

7. What was done to overcome it? Were those efforts successful?

8. According to Slater, what lessons can be learned from the entire process which included but was not limited to Microsoft's rebooting?

9. Given his direct and extensive access to Gates and Ballmer (interviewing them separately as well as together), what does he think of each?

10. In Slater's opinion, what must be done to complete the reforms at Microsoft now underway?

Slater is the author of more than 25 books, most of which I have read and reviewed. In my opinion, this is his most important work thus far, in part because of what it reveals about Gates, Ballmer, and their company but also because it reminds all of us that even a Microsoft will always be a "work in progress"...and that only hard and smart "work" will achieve the "progress" on which success depends.

Microsoft is a company whose origins and leader, Bill Gates, are well documented. The brand is one of the most recognized in the world, and countless millions use their products. What is less known though is how the organization had to transform itself recently while never letting their collective foot off the gas.

The first hundred pages or so start with the history of how Gates founded the company. I felt the author didn't go into too much detail or attempt to write an autobiography, just provide enough background to set the stage for the changes to come.

The catalyst according to the author is the DOJ lawsuit filed against Microsoft. The impact on Gates is described as profound, and helped Bill and Steve Ballmer initiate some changes to a few company philosophies.

There are a few themes that emerged for me when reading. Among them are the facts that the company has a (rare) focus on never standing still. Always concerned about being out innovated, or beat in the marketplace, the company has created a culture where employees and leadership are relentless about improving. Another (rare) organizational trait is the focus on hiring talented people. Only GE in my personal experience understood that hiring the smartest, and best, at all levels is critical to success. Microsoft leaders are legendary for their unusual interviewing techniques, all designed to hire the brightest thinkers.

While these traits made the company successful, according to the author they alone were not enough to take Microsoft forward after recent events. One of the biggest changes was Bill Gates stepping out of the top role into a technology role, and Steve Ballmer taking on the CEO role. This move may have been surprising from the outside, but it seems it allows both to do what they do best. Further changes in focus were developed in two broad areas, values and customer focus. Steve Ballmer sought to influence the talent inside Microsoft to better work together, be more respectful and self critical, and so on. The book outlines a short list of these values. The second area was an even stronger focus on customer orientation. These concepts are outlined in some detail.

Overall, the book is an easy read, and was not in any way dry in my opinion. The author does a credible job at portraying the events and outside influences that led to the "reboot" or transition that companies must go through as they grow. For anyone interested in Microsoft, the book provides an interesting overview of the life cycle of an organization that has had a profound impact on the world.

This book provides an inside look at how Microsoft dealt with the US DOJ anti-trust lawsuit against it at the beginning of the 21st century both internally and externally. Externally, Microsoft undertook several changes, starting with Bill Gates' work with charities and the establishment of his Bill and Melinda Gates foundation. Internally, the book describes changes in business culture, such as an emphasis on not winning at any cost, but following the law, emphasizing customer happiness instead of purely sales figures, etc... Another internal change was Bill Gates stepping aside as head of the company, and his selection of Steve Ballmer to be his replacement. The book describes all this in great detail. However, I wish the book had elaborated more on the details of the lawsuit, how it came about, and how the US anti-trust lawsuit was similar to and different from those in Europe. The book could have also provided more examples of the business practices that led to the US anti-trust lawsuit. Instead, the book comes across more as a touchy-feely PR story by Microsoft instead of what it purports itself to be; a solid piece of business investigative journalism.

I was hoping for a professional, objective look at Microsoft in 2004. Something that would be of help to business managers in dealing with change in a dynamic economy as well as the community of users of Microsoft products. What I got reads like propaganda written by Microsoft Public Relations Department.

The nonsense begins on the very first page with the author's statement (page vii):

"He [Bill Gates] had, after all, almost singularly brought about the personal computer revolution."

This statement displays such a total ignorance of the history of the personal computer, that it brings into question not just the author's credibility, but also his connectivity to the real world. Like Jobs, Wozniak, IBM (Estridge and Lowe), Intel (Grove), Kildall, Shugart, etc. never existed.

As the book wore on, it became apparent that this statement was not just an isolated misunderstanding; this guy simply worships Gates and, to a lesser extent, Ballmer. "... both [Gates and Ballmer] had become high-tech icons" (page 209). I lost count of number of times this guy used the phrase "great software" to describe Microsoft's product, which is right out of the mouth of Bill Gates. (This author has apparently never actually USED any Microsoft software.)

The book is written from authorized interviews with MS employees including Gates, Ballmer and senior executives. That perspective is apparent.

The changes the author discusses at length and amount to the "rebooting" are:
- Promoting Ballmer to CEO
- Reorganizing into 7 divisisons
- Dropping employee stock options
- Bringing in a bunch of Human Resources people
- Settling the anti-trust law suits with payoffs
- Gates Foundation and his widely-publicized visits to Africa and India

Reorganizing into divisions had simply become necessary to manage and control a company that had grown to 55,000 employees. Regarding stock options, the author never mentioned that accounting rules were changed to require companies to charge them to expense in the current period. If Microsoft thinks bringing in a bunch of Human Resources people will help, then they have had no experience with HR people. That will cause more misery than the DOJ. As far as Gates philanthropy, even Al Capone funded soup kitchens.

The author repeats countless times Ballmer's statements that these changes will create a culture of "a more open and respectful Microsoft" Page 225: "He [Ballmer] said yes, there was a kinder and gentler Microsoft afoot." A "kinder and gentler Microsoft." Really? From Ballmer? I shake my head in disbelief that anyone could seriously report that statement.

Despite claims of a "new customer-oriented focus," nothing was mentioned about:
- customers being required to pay for support of buggy software
- forced registration of software starting with XP
- charging blackmail prices for Office

Microsoft The Monopolist is just becoming bolder.

Only at the very end in a few pages was there any indication that seemed to indicate, fundamentally, the culture has not changed and all the stuff is just window-dressing for appearances-sake. The book began discussing at length the DOJ anti-trust law suit and the distraction is caused the poor Microsoft executives, including Gates. Nothing was included about the details of the abuses that led to the charges. But the author did correctly point out that Gates' philanthropy and these changes just happened to begin mid-trial. But in the end, Microsoft simply got off easy because Bush was elected.

Bottom line: Is the book worth reading? Probably, if only to learn the party line coming out of Redmond. If you want objectivity, look elsewhere.