Shift: Strategic Reinvention
Steve Ballmer has a new lease on life. After more than three decades at Microsoft as employee number 30, he retired as CEO in February 2014 and is looking toward the future. He’s also number 18 on Forbes’ list of wealthiest Americans with $22.5 billion, so he discussed his plans for the future with George Anders for that magazine’s recent issue.
First, Ballmer’s purchase of the Los Angeles Clippers earlier this year will take a large chunk of his time. This was the third time he tried to purchase an NBA team. Many believe he overpaid for the opportunity, but it aligns well with his love of the sport, and focuses him in an entirely different direction. Second, though he’s no longer involved with the company, as the largest individual Microsoft shareholder (333 million shares!), he will continue to closely monitor his investment. He’s also using his vast experience to teach MBA students at the Stanford Graduate School of Business. This is part of evaluating his legacy as they analyze the successes and failures of his former company.
Finally, and more importantly, he and his wife are researching how to use their formidable wealth to positively impact society through philanthropy. He’s surrounding himself with a group of advisors to understand issues and problems around the world as he formulates his next steps in this arena. Ballmer’s legendary energy level, evidenced whenever he met with employees at Microsoft, and with Clippers fans at his first game as owner, seems at an all-time high as looks toward the future. He’s making a shift and strategically reinventing himself.
Organizational Reinvention
Ballmer’s exit from Microsoft came at a time when investors were calling for change. Given the pressures on new product development and revenues, it was time for a shift in the company. He had reached a senior level of professional maturity and accomplishment, and it was time to look for the next shift in his own life. But Ballmer is just one example of the many people who reach that point. Granted 99.99% of the people aren’t quite as rich or accomplished, but nonetheless are similarly passionate about their past and their future, and find a time in life where they need a shift…a strategic reinvention.
IBM is facing a similar pivotal moment. In their 2014 third quarter earnings release, CEO Virginia Rometty acknowledged a need to reinvent the company just twenty years after their strategic shift from hardware, to software and computer services. Now after revenues have declined for the 10th straight quarter, those business lines are lagging and the company is admitting they will miss an earnings target. Some describe it as an “old technology company” that needs to quickly move into cloud computing. And while opinions may vary, they are obviously in need of a shift…a strategic reinvention.
Getting There
Making a shift or strategic reinvention is characterized by several phases.
Discomfort – When individual or organizational results are no longer as favorable, and the tried and true strategies to improve them don’t work, this is a warning signal. There may be an uneasiness that the environment is changing, stakeholders want different outcomes, and competitive requirements are fluctuating. The ability to develop plans to meet future needs becomes more difficult as the environment lacks clarity. This is like shifting gears in a vehicle with an automatic transmission where there’s a momentary pause in the speed of the vehicle, but the ultimate benefit is that it can move faster once the shifting is complete.
Direction – Strategic reinvention requires thoughtful evaluation of where you want to go, what you want to become, and whether you have the resources to get there. It requires careful assessment of the competitive environment, the financial requirements, the skillset of your team, the time required for change, and future perspective. This requires a level of resolve by the leader(s) to make tough decisions unencumbered by the past, to head in the right direction.
Destination – After a strategic reinvention, where you end up will look different from where you were. The people who were with you in the past, may not follow you into the future because they don’t want to, or are not capable of making the shift; they’re not invested in the change. Your destination can represent a fresh start, a new beginning, a different approach to how you add value to others. It’s important to take advantage of the momentum you gather along the way and carefully construct the environment crucial to your success.
Winds of Change
Former Intel CEO Andy Grove’s book, Only the Paranoid Survive, makes the point that we all need to expose ourselves to the winds of change. These winds at some point will require us to shift gears, and experience a strategic reinvention, so that we can move further faster. It’s rarely easy. Often a coach, advisor or consultant with specific expertise in the area of focus can help to guide you on the pathway, to help as you shift gears. Steve Ballmer seems to be finding his pace and enjoying the process. Microsoft, IBM and other organizations similarly positioned will be pushed forward by less patient stakeholders. Ultimately all of us will reach a point where we need to shift. How will you handle it?
Read the Forbes story on Steve Ballmer here.
Read the Wall Street Journal story on IBM here.