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When Growth Stalls: A Case Study of the iPhone

November 13, 2020 By Nagesh Belludi Leave a Comment

If you got an iPhone in the last few years, you don’t really need to rush to replace it with the new iPhone 12.

In a sense, Apple is relying on other businesses to make this new lineup a success. Despite Apple’s assertions that the new iPhone 12 supports fast 5G cellular networks, the prevailing 5G networks in America just aren’t fast enough yet.

Feature Stagnation

When Growth Stalls: A Case Study of the iPhone Arguably, there’s not much further for the iPhone to go. It’s been improved through numerous versions since 2007, and there simply isn’t much left to do. The entire experience is probably as good as it ever needs to be.

Beyond better power, speed, design, battery, cameras, and display, Apple faces the horizon of what’s expectable from a smartphone. After a decade of relentless growth and absolute dominance, innovation has exhausted. Progress will become increasingly inconsequential. Through it all, Apple has successfully sustained premium-position captivity and thrived even as new, low-cost competitors are emerging worldwide.

When Growth Stalls

Apple’s growth trajectory is likely to look different in the future. The bulk of Apple’s future growth prospects will come from existing customers and not new smartphone adopters. Apple has been focusing on newer software and services to expand the user experience and retain customers.

Apple’s core product is ex-growth. In that sense, Apple is now like Microsoft and Alphabet. Faced with product stagnation, both Microsoft and Alphabet responded by pushing into entirely new areas to spawn growth, but with patchy successes. When it’s dominant Windows and Office franchises were stalling, Microsoft pivoted and had big hits with the Xbox and enterprise software but failed with MSN, Bing, and mobile. Google diversified with Android and Apps but repeatedly missed on social.

Idea for Impact: No one, no matter how historically innovative and powerful, is guaranteed immortality

Successful companies—and people—must evolve their competence or risk becoming marginalized. The roots of sustained success lie in being aware, innovative, and adaptable. Don’t become too focused on taking care of today and forget preparing for tomorrow. Your business model could be fragile.

Wondering what to read next?

  1. Microsoft’s Resurgence Story // Book Summary of CEO Satya Nadella’s ‘Hit Refresh’
  2. Fail Cheaply
  3. How to See Opportunities Your Competition Doesn’t
  4. Lessons from Peter Drucker: Quit What You Suck At
  5. Three Leadership Lessons from Ron Johnson’s Debacle at J.C. Penney

Filed Under: Business Stories, Leadership Tagged With: Apple, Change Management, Google, Microsoft, Strategy

Microsoft’s Resurgence Story // Book Summary of CEO Satya Nadella’s ‘Hit Refresh’

July 10, 2019 By Nagesh Belludi 1 Comment

Leader as Sense-Maker and Cultural Curator

Microsoft CEO Satya Nadella is an exemplar of a leader as sense-maker. He has revitalized how Microsoft’s strategy, mission, and culture connect people, products, and services—inside and outside his company.

'Hit Refresh' by Satya Nadella (ISBN 0062959727) Nadella has a success story to tell, and his Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone (2017, with two co-authors) highlights how he is a different kind of leader transforming Microsoft into a different kind of company.

Hit Refresh‘s broad objective is to lay out a vision for the future of the company. The book is aimed at people who work at or with Microsoft. Many employees were given a special imprint of book with Nadella’s faux-handwritten annotations in the margins and highlighted snippets.

The book’s narrative arc shifts from a personal memoir to a management how-to, and then to technological futurism. The latter—and perhaps the least interesting—portion features Nadella’s forethoughts on artificial intelligence, augmented reality, and quantum computing, as well as their socio-economic implications.

Satya Nadella Shook Things Up by De-Ballmering Microsoft

Nadella took Microsoft’s reins in February 2014 after long-time CEO Steve Ballmer resigned in August 2013. Under Nadella’s watch, Microsoft quickly became more open and more nimble as an organization. Its cloud computing, Office 365, and gaming platform franchises are all running remarkably well.

Microsoft pivoted its business model around subscription products that produce recurrent revenue. It acquired Mojang (creator of the popular Minecraft videogame title,) LinkedIn, and GitHub. It ditched Nokia and embraced open source software—it’s even including a Linux kernel in a future Windows release.

Today one of my top priorities is to make sure that our billion customers, no matter which phone or platform they choose to use, have their needs met so that we continue to grow. To do that, sometimes we have to bury the hatchet with old rivals, pursue surprising new partnerships, and revive longstanding relationships. Over the years we’ve developed the maturity to become more obsessed with customer needs, thereby learning to coexist and compete.

Satya Nadella and Microsoft's Transformation Story

A Renewed Sense of Purpose: The Leader’s Tone Steers the Organizational Culture

Hit Refresh‘s foremost take-away is how the tone at the top sets an organization’s guiding values. Properly contemplated, propagated, and nurtured, Nadella’s approach became the foundation upon which the culture of Microsoft has been remade.

With “the C in CEO is for curator of culture,” Nadella’s dominant mission has been to recreate Microsoft’s underlying beliefs, values, and expectations in the eyes of its employees, business partners, customers, investors, and the society. This culture is to be consistent within Microsoft and characterize all the discernable patterns of behavior across the organization.

When I was named Microsoft’s third CEO in February 2014, I told employees that renewing our company’s culture would be my highest priority. I told them I was committed to ruthlessly removing barriers to innovation so we could get back to what we all joined the company to do—to make a difference in the world.

Nadella’s playbook has consisted of challenging complacency, instituting a “growth mindset,” being open-minded enough to welcome new technology and collaborate with Microsoft’s traditional competitors (“frenemies,”) and shifting from a “know it all” to a “learn it all” mindset.

I had essentially asked employees to identify their innermost passions and to connect them in some way to our new mission and culture. In so doing, we would transform our company and change the world.

“Driven by a Sense of Empathy and a Desire to Empower Others”

Satya Nadella Says wife Anu and their children's challenges taught him empathy Core to Nadella’s framework is his conviction that individuals are wired to have empathy. “The alchemy of purpose, innovation, and empathy” is indispensible “not only for creating harmony within organizations but also for creating products that resonate.”

Nadella describes how caring for a special-needs child and his wife Anu’s sacrifices for the family made him become conscious of the significance of empathy. Specifically, Anu helped him recast these setbacks as opportunities to expand his worldview.

Being a husband and a father has taken me on an emotional journey. It has helped me develop a deeper understanding of people of all abilities and of what love and human ingenuity can accomplish. … It’s just that life’s experience has helped me build a growing sense of empathy for an ever-widening circle of people. … My passion is to put empathy at the center of everything I pursue—from the products we launch, to the new markets we enter, to the employees, customers, and partners we work with.

The most interesting section of Hit Refresh is Nadella’s personal journey growing up in India, migrating to America, and working his way up the career ladder at Microsoft. The only child of a Sanskrit scholar and a civil servant, Nadella was hooked on cricket (it taught him how to compete vigorously, the virtue of working in teams, and the importance of leadership direction.)

Recommendation: Satya Nadella’s Hit Refresh is a satisfactory first take on his remarkable revamp of the culture of a company that had become set in its ways. Microsoft’s transformation has been nothing short of dramatic—there’s a lot more to be done and written about.

Wondering what to read next?

  1. Book Summary of Nicholas Carlson’s ‘Marissa Mayer and the Fight to Save Yahoo!’
  2. Two Leadership Lessons from Oscar Munoz, United Airlines CEO
  3. Better to Quit While You’re Ahead // Leadership Lessons from Microsoft’s Steve Ballmer
  4. When Growth Stalls: A Case Study of the iPhone
  5. Bill Gates and the Browser Wars: A Case Study in Determination and Competitive Ferocity

Filed Under: Business Stories, Leadership Reading, Managing People Tagged With: Bill Gates, Change Management, Leadership Lessons, Microsoft, Transitions

Adapt to Your Boss’s Style: Cases from Andy Grove and Steve Ballmer’s Expectations in Meetings

November 25, 2016 By Nagesh Belludi Leave a Comment

Andy Grove’s Meeting Style at Intel

Andy Grove's Meeting Style at Intel Intel’s former Chairman and CEO Andy Grove (1936–2016) was known for his brash management style. He habitually resorted to fear as a management technique. In an effort to aggressively pursue the right answers, he devoted his focus to facts and data, as I wrote in my article on lessons from the Intel Pentium integer bug disaster.

In meetings, Grove expected his employees to be self-willed, clear-sighted, and obstinate. Grove wrote in his autobiography / management primer Only the Paranoid Survive (1996,) “Don’t sit on the sidelines waiting for senior people to make a decision so that you can later criticize them over a beer.”

With an “in-your-face” interpersonal style, Grove bellicosely challenged his interlocutors and called his meetings “constructive confrontations.” In contrast, his executives recalled them as “Hungarian inquisitions” in reference to his childhood in Hungary under Nazi and Communist regimes.

Recalling Grove’s technique for meetings, one executive said, “If you went into a meeting, you’d better have your data; you’d better have your opinion; and if you can’t defend your opinion, you have no right to be there.” In pursuit of accuracy and rationality, Grove would rip his employees’ ideas to shreds even while they were still on the first page of their carefully prepared presentations.

Steve Ballmer’s Meeting Style at Microsoft

Steve Ballmer's Meeting Style at Microsoft Another case in point is how Steve Ballmer conducted meetings. For most of his career as Microsoft’s CEO, Ballmer expected his employees to deliver a presentation he hadn’t seen before, take the “long and winding road” of discovery and exploration, and then arrive at the conclusion. This allowed Microsoft employees to expose Ballmer analytically to all their contemplations and postulations before steering him to their conclusions.

Years later, Ballmer reflected that this meeting style wasn’t efficient because, as a high-energy person, he couldn’t bear longwinded narratives and grew impatient for the conclusions. Ballmer changed his expectations of meetings and required employees to send him the presentation materials in advance. He would read them and directly venture into questions, asking for data and supporting evidence only if needed. This gave him greater focus in meetings.

Idea for Impact: Attune to Your Boss’s Communication Style

As I’ve discussed in previous articles, your ability to work well with others can mean the difference in whether your career progresses or stalls. To advance professionally, it’s particularly important that you have a good working relationship with your immediate supervisor.

Attune to Your Boss's Communication Style Bosses, like all people, differ greatly in their capacities and communication styles. You and your boss may be reasonably compatible or you may have entirely different communication preferences, temperaments, and styles. Regardless, you need to achieve a beneficial and cordial way of working with your boss.

Invest time and energy in understanding how your boss works, her ambitions and goals, her priorities, her strengths and weaknesses, the specificity she expects from your projects and decisions, her hot buttons, and her flash points.

Accommodate your boss’s work style. Discuss communication preferences and seek feedback. Be flexible. Ask questions to clarify what you don’t understand.

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  1. How to Prepare for Meetings
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  5. Microsoft’s Resurgence Story // Book Summary of CEO Satya Nadella’s ‘Hit Refresh’

Filed Under: Managing People Tagged With: Managing the Boss, Meetings, Microsoft

Bill Gates and the Browser Wars: A Case Study in Determination and Competitive Ferocity

January 20, 2015 By Nagesh Belludi 1 Comment


Competition Drives so much of our World Today

We live in a hypercompetitive age where winning is the outcome, often necessary for survival—in classrooms, sports, trade and commerce or at work. The archetypical successful person is determined, aggressive, and obsessed with winning at everything, sometimes at any cost. Of course, competition is healthy; but, winning may come at a hefty price—always striving to win or being overzealous can be both unnecessary and unproductive. Besides, collaborative or naturally uncompetitive individuals tend to find competitive people somewhat unpleasant.

History provides but a few vivid portraits of intense competition that compare to the mid-90s’ “browser wars,” a narrative characterized by the dogged determination and intense competitive spirit of some of the world’s greatest entrepreneurs.

Bill Gates and Microsoft are legendary for using brute power: whenever a new competitor emerged, Microsoft would muster its financial resources and its smarts to storm into those markets with alternative products that would eventually dominate. Up until the dot-com bust, Microsoft not only out-competed Borland, Lotus Development, Corel, and other rivals that were previously in the lead, but also crushed upstarts such as Netscape.

“The Browser Wars”: Rise and Fall of Netscape

Bill Gates and the Browser Wars At the start of 1995, a new software called Netscape Navigator took the computing world by storm. Unlike primitive browsers, Netscape could display text and graphics on websites. Early web buffs eager to discover the marvel of the nascent internet were no longer restricted to downloading text alone. In addition, Netscape could render web pages on the fly while they were still being downloaded. Users did not need to stare at a blank screen until their dial-up connections loaded text and graphics.

Even more astounding was the fact that the upstart Netscape Communications, Netscape Navigator’s creator, had been co-founded by a 23-year-old programmer just a few months previously and seemed well-positioned to take advantage of the imminent consumer internet revolution. Netscape was on its way to an extraordinary 90% market share amongst internet browsers. What’s more: the company’s spectacular IPO was drawing near and was to start the dot-com boom.

Netscape’s meteoric rise could not escape the attention of the world’s dominant software company. Early in 1995, Microsoft was particularly occupied with finalizing Windows 95. Its launch, scheduled for August 1995, would prove to be the largest, most expensive consumer marketing endeavor in history. Moreover, the U.S. Justice Department (DOJ) had embarked on an intrusive investigation into claims of unfair business practices as alleged by Microsoft’s competitors.

While Netscape was capturing the Web browser market, Microsoft and Bill Gates had seemingly missed the paradigm shift created by the consumer internet. Financial and technology analysts wondered if Microsoft was destined to lose its supremacy over software. Microsoft could not wait on the sidelines and cede business opportunities in the upcoming consumer internet revolution.

Browser Wars: The Rise and Fall of Netscape Navigator and Internet Explorer

Bill Gates and Microsoft Jumped on the “Internet Tidal Wave”

Bill Gates, Steve Ballmer, and the Microsoft team were not to be trifled with. Microsoft simply could not afford to be the underdog. Its strategy was transformed entirely when, on 26-May-1995, Bill Gates wrote the groundbreaking internal memo, “The Internet Tidal Wave.”

Bill Gates deployed an extraordinary amount of capital and talent to battle for control over consumer internet. Just after the August-1995-release of Windows 95, Microsoft released an inferior Internet Explorer 1.0. In 1996, Version 3.0, matched the features of Netscape Navigator. Finally, in 1997, after bundling Internet Explorer 4.0 into Windows 95, Microsoft started to take a significant market share from Netscape.

In 1998, the DOJ and twenty US states alleged that Microsoft had illegally thwarted competition by abusing its monopoly in personal computers to bundle its Internet Explorer and Windows operating system.

By 1999, Netscape was an inferior web browser and quickly lost its dominance. The software’s market share dropped from 90% in 1996 to a meager 4% by 2002.

In subsequent installments of the browser wars, Netscape Navigator’s open-source successor, Firefox, regained market share from Internet Explorer. More recently, Firefox and Internet Explorer have had to contend with Google’s Chrome, which has grown to be the dominant web browser.

Microsoft Set Out to Destroy Competitor after Competitor

Historically, Microsoft has never been a substantial innovator. Instead, the company’s most famous strategy was to be a “fast follower.” The variety of rivals’ projects made no difference—competitors could pioneer anything from graphical user interfaces (GUI,) pointing devices, spreadsheets, word processors, browsers or gaming consoles and Microsoft would catch up in due course.

Consequently, the most important Microsoft products started essentially as copies of existing products made by competitors or upstarts that Microsoft was able to purchase early. MS-DOS evolved from QDOS, which itself derived from CP/M. Microsoft Windows was inspired by Apple’s Macintosh, which, in turn, had been inspired by a prototype mouse-driven graphical user interface that Steve Jobs had seen at Xerox PARC. Microsoft Excel borrowed from VisiCalc and Lotus 1-2-3. In addition to riding the coattails of bona fide innovators, Microsoft excelled in smart integration—it combined nifty functions and features into a single product or into a suite of easy-to-use tools such as its Office productivity software.

Microsoft’s Once-Invincible Strategy of Being a “Fast Follower” Wasn’t Sustainable

Alas, in the last 15 years, Microsoft’s “fast follower” competitive strategy has proven unsustainable. As its dominance in the enterprise world grew, Microsoft’s impressive financial performance relied mostly on its “old faithful” franchises. In fiscal 2014, the Windows operating system, Office productivity suite, and servers/cloud businesses contributed 78% of Microsoft’s revenue and almost all of the gross profit.

Despite the competitive ferocity of Bill Gates, Steve Ballmer, and others at the company’s helm, Microsoft has been unable to return to its domineering ways in the internet’s recent mobile- and social-computing trends. In fact, Microsoft stumbled in category after category of consumer computing and technology, including search, social networking, phones, music players, and tablets. Google, Facebook, Apple—lead by entrepreneurs just as intensely competitive as Bill Gates—have soared ahead, altering the social-media-tech consumer experience.

Recommended Reading: If you like business history and entrepreneurial success stories, read ‘Forbes Greatest Business Stories of All Time’, Daniel Gross’s engaging profiles of twenty great American entrepreneurs: Revolutionary War financier Robert Morris, McDonald’s ‘founder’ Roy Kroc, Walt Disney, Microsoft’s Bill Gates, et al. For more stories of Bill Gates’s fierce competitive instincts, read Stephen Manes’s “Gates”.

Wondering what to read next?

  1. How to See Opportunities Your Competition Doesn’t
  2. Competition Can Push You to Achieve Greater Results
  3. Microsoft’s Resurgence Story // Book Summary of CEO Satya Nadella’s ‘Hit Refresh’
  4. How Johnson’s Baby Powder Got Started: Serendipity and Entrepreneurship
  5. The Truth About Work-Life Balance

Filed Under: Business Stories, Sharpening Your Skills, The Great Innovators Tagged With: Bill Gates, Competition, Entrepreneurs, Getting Ahead, Microsoft

Better to Quit While You’re Ahead // Leadership Lessons from Microsoft’s Steve Ballmer

November 17, 2013 By Nagesh Belludi Leave a Comment

Steve Ballmer, Microsoft CEO If you are the CEO of a large public company and the news of your exit causes your company’s market cap to swell by $24 billion on the morning of this announcement, you’ve made the right call.

On 23-Aug-2013, Microsoft’s shares gained 8.9% in pre-market trading when the company announced that Chief Executive Officer Steve Ballmer would retire within the next twelve months. During Ballmer’s 13-year tenure as CEO, Microsoft continued its dominance over the traditional segments of computing, but could not grasp changing consumer preferences. Despite stellar profitability, strategic missteps have forced Microsoft to play catch-up as Apple, Google, and other competitors dominated the new world of mobile devices, social media, search, and internet advertising.

In interviews with Wall Street Journal, Ballmer admitted: “Maybe I’m an emblem of an old era, and I have to move on … As much as I love everything about what I’m doing, the best way for Microsoft to enter a new era is a new leader who will accelerate change.”

Successful professionals know when to make the move: While they are ahead

There is a time limit to success at any leadership position. If a leader is any good, after the initial rush of process improvements, business turnarounds, organizational transformations, and program initiations, familiarity sets into his job. At that point, diminishing returns set in: established routines, processes, and employee networks take over the execution of the change the leader might have initiated.

There is a natural cycle of rapid growth and sustenance to most leadership roles. Stay as long as you need to establish direction, put your ideas into action, and institute the momentum of change. Then, undertake new challenges in your existing job or explore new career opportunities. Plan ahead—the right opportunity may not emerge quickly.

Don’t Hang on

Another lesson from the imminent transition at Microsoft: when you find yourself in trouble and can’t seem to make an impact despite persistent attempts at change, do not wait to get the push. It may be difficult to let go, but don’t hang on.

Wondering what to read next?

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  2. Microsoft’s Resurgence Story // Book Summary of CEO Satya Nadella’s ‘Hit Refresh’
  3. Are You Ready for a Promotion?
  4. A Little Known, but Powerful Technique to Fast Track Your Career: Theo Epstein’s 20 Percent Rule
  5. Book Summary of Nicholas Carlson’s ‘Marissa Mayer and the Fight to Save Yahoo!’

Filed Under: Career Development Tagged With: Career Planning, Leadership Lessons, Microsoft, Transitions

Virus on iPods: Apple blames Microsoft Windows

October 20, 2006 By Nagesh Belludi Leave a Comment

Virus on iPods: Apple blames Microsoft WindowsOn Wednesday, Apple’s iPod support website acknowledged that a small number of video iPods were infected with a Windows virus. In addition to describing the scale of infection and providing instructions to remove the virus, the website blamed Microsoft Windows for the glitch.

“As you might imagine, we are upset at Windows for not being more hardy against such viruses, and even more upset with ourselves for not catching it.”

Apple’s “114,000 viruses? Not on a Mac” advertisements have lately targeted Windows users to ‘Get a Mac’. Presumably, someone at Apple [AAPL] believed that blaming Microsoft Windows for viruses on the iPod could extend its ‘Get a Mac’ campaign. The outcome is a cheap shot at the competition.

The iPods were apparently infected with the virus at one of Apple’s contract manufacturers. There is no reason for Apple to be “upset” at Microsoft for not being more hardy against such viruses.” Microsoft [MSFT] has invested significant resources (money and talent) fighting hackers and improving its software development process. As Jonathan Poon of the Microsoft virus-scanning group pointed out on his blog, Apple should blame its own manufacturing system.

“It’s not a matter of which platform that the virus originated. The fact that it’s found on the portable player means that there’s an issue with how the quality checks, specifically the content check was done.”

Apple should also blame hackers, who were creative enough to get malicious code embedded on an Apple product while it was connected to a Windows machine on Apple’s manufacturing line.

The take-away lessons: (1) possess a healthy respect for the competition, and, (2) blaming the competition without cause constitutes poor taste.

Wondering what to read next?

  1. When Growth Stalls: A Case Study of the iPhone
  2. Three Leadership Lessons from Ron Johnson’s Debacle at J.C. Penney
  3. Bill Gates and the Browser Wars: A Case Study in Determination and Competitive Ferocity
  4. Microsoft’s Resurgence Story // Book Summary of CEO Satya Nadella’s ‘Hit Refresh’

Filed Under: Business Stories, Managing Business Functions, News Analysis Tagged With: Apple, Microsoft

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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