Everything in life has an expiry date; a pint of milk, favourite jumper, haircut or a car. When this item, product or service needs renewing there is normally a readymade replacement available to take its place. But is this the same in the work place? Naturally, employees will look to progress their career either internally or externally in the same way an employer will continuously look for new talent and promote from within. But when do we know it’s actually time to go?
At Microsoft, there is currently pressure on Bill Gates to vacate his position as Chairman by three investors, who collectively hold more than 5% of the company’s shares. Gates built Microsoft from scratch, turning it into a market leading multibillion dollar company with around 360 million users of their Windows operating system worldwide. During this period his personal wealth has swelled, he was a millionaire at 30, billionaire at 31 and the world’s richest man at 40 holding the title for 14 years. In 2000 he made the decision to lower his profile and concentrate his efforts on his charity foundation. However he still owns around 5% of shares and is Chairman. Over the last 10 years we have seen technology development reach new heights with new and improved products coming onto the market at a phenomenal rate. Companies like Apple, Samsung and Sony have gained a significant advantage in a number of Microsoft’s markets.
But it is not all doom and gloom. Microsoft makes around $15 billion a year profit but as the market evolves and their less established competitors are securing a vital market share through innovation – is it time Mr Gates cuts all ties and allows the organisation to move in a different/new direction? Is it commercial suicide for a company making so much money to be looking for a change at the top? And who should decide it’s time for a change? Mr Gates himself or the company?
What does history tell us? Steve Jobs who started Apple, left in 1985 after an internal power struggle and returned to the organisation on an interim basis 10 years later from near bankruptcy and within 2 years they were recording a profit. Over the last 10-15 years with Steve in charge, Apple have released the iPod, iPhone and iPad which have changed the way we communicate, buy products and play games. This week Apple was named the most valued brand in the world, overtaking Coca Cola (who have held the title for 13 years) valued $98.3 billion and Microsoft in 5th place valued $60 billion. It is worth noting that in 2005, Apple was valued at just under $20 billion and Microsoft at $60 billion. Steve returned to lead Apple to the brand it is today, but his career was cut short and he resigned due to terminal illness. Questions are starting to be asked if Apple is developing fast enough since Steve left after a couple of mediocre product releases.
Sir Alex Ferguson was one of the most successful club managers in the world spending 26 years at Manchester United winning 38 trophies and playing a vital part in turning the club into the richest team in the world, valued at $3165 million. Sir Alex took the decision to retire after 3 decades aged 71 while his team was on top and had just secured another domestic championship by a huge margin. There are questions if Alex’s successor is the right person for the role.
Steve Jobs and Sir Alex Ferguson, for different reasons, vacated their roles and their organisations had to move on with new leaders for better or worse. So it is right or wrong to push Gates out? Will he know when it’s time to go? Is he holding the company back? Ultimately, Microsoft isn’t just Bill Gates any more, it is Fortune 500 company owned by shareholders who demand profits and growth on their investments. Microsoft is still turning a healthy profit but questions are being raised on the long term direction. Is Gates still the right person to be presiding over the organisation nearly 40 years on? Any leader has to be resilient, headstrong and driven especially when it is your own company but are the same characteristics preventing Microsoft from implementing a new strategic direction to ensure long terms success in a world very different from 40 years ago? I’m guessing Gates will be the once to decide.
Ian is a Consultant in London and is a devout Apple user.