The CEOs of Microsoft, Intel, and Apple were famously flawed leaders, so how did they manage to transform their companies?
Strategy without execution is as worthless as execution without strategy.
Getting both right is a challenging task, but one that Bill Gates, Andy Grove, and Steve Jobs all accomplished to an impressive degree. All three had weaknesses as leaders, and they all benefited greatly from the help and support of their executive teams and other employees. Nonetheless, we cannot deny the strength of their track records at Microsoft, Intel, and Apple. Their success leads us to ask: What did these three CEOs do to drive performance and organizational effectiveness? Why were they able to deliver more powerful results than their rivals and successors, despite their well-known flaws?
The answer may sound surprising: none of the three was the type of well-rounded general manager that top business schools try to produce. Gates, Grove, and Jobs had no formal business training, and it often showed. All three exhibited behavior that experts on leadership would call "incomplete" and sometimes seriously counterproductive.
Although willing to be proved wrong, each CEO typically saw himself as the smartest person in the room. They could all be harsh, even unfair, towards subordinates, and they built cultures that encouraged independent thought as well as fierce debate and sometimes personal confrontation.
However, they also had unique strengths that profoundly affected the companies they led. Gates brought to Microsoft a deep understanding of software as a technology and a business; Grove brought to Intel an intense commitment to instill "engineering-like" discipline in management and operations; and Jobs brought to Apple a unique sense of product design, with an intuitive understanding of how to make complex technology accessible to the nontechnical person.
These strengths provided each CEO with a "personal anchor" that grounded his contributions to the company and shaped the way their organizations evolved. The anchors drove their day-to-day focus as CEOs and guided strategic thinking as well as decisions ranging from recruiting to delegation of authority. The values and priorities they embodied became elevated into organizational routines and competencies that remain in place even today at Microsoft, Intel, and Apple.
Such strong identification with a CEO’s strengths—or more generally, with a visionary founder or transformational leader—can have a downside as well. In particular, overdependence on a single person can constrain an organization’s ability to act and adapt to change. Like a ship’s anchor, a CEO’s personal anchor both prevents drift and limits movement in new directions—whether that means new markets and technologies or new strategies and business models. Microsoft, Intel, and Apple all confronted this dilemma in varying degrees. For the most part, though, Gates, Grove, and Jobs were relatively good at identifying their own weaknesses while they were in charge, and finding partners and colleagues to fill those gaps.
Many CEOs try to do too much on their own. Gates, Grove, and Jobs were guilty of this failing early in their careers. Over time, however, they learned to focus on a few key areas and management levers and built high-powered teams to run big chunks of their companies. They paid extraordinary attention to key details of critical products and operations, but delegated in other areas with which they were less familiar.
They got into the trenches with their employees in the areas where they believed they could add the most value, but always remained focused on the big picture—their higher-level strategic goals or product ambitions. In order to keep the best minds in their companies trained on the biggest problems, they dug deep into their organizations to find the most knowledgeable individuals, regardless of status or seniority. In other words, they didn’t just "follow the money." They followed the knowledge. And they also made sure to combine people with ideas, as Bill Gates explained in a recent article:
. . . the rules for running a strong business and creating value haven't changed. For one thing, there's an essential human factor in every business endeavor. It doesn't matter if you have a perfect product, production plan, and marketing pitch; you'll still need the right people to lead and implement those plans. That is a lesson you learn quickly in business . . .
Gates, Grove, and Jobs relied on their personal anchors in similar ways as they tackled the challenges of strategy execution and organization building. Each was an imperfect but ultimately effective leader, and all three demonstrated the value of the following four principles—in differing degrees and with varying approaches:
- Know thyself—warts and all.
- Pay extraordinary attention to detail—selectively.
- Never lose sight of the big picture.
- Give power to people with the knowledge.
By David B. Yoffie and Michael A. Cusumano