SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Why Microsoft Needs a Fighter Pilot Instead of a Moist N’ Easy Snack Cake Salesman

Posted by Bob Warfield on December 29, 2011

Wondering where that crazy title and the photo came from?

First, check out Steve Ballmer’s early pre-Microsoft career.  He was the Product Manager for Proctor & Gamble’s Moist N’ Easy Snack Cakes.  No harm in that, in fact he apparently sat near Jeffrey Immelt, who would eventually rise to become one of GE’s celebrated CEO’s.  Okay, what about the fighter pilot thing?  That would be a reference to fighter pilot John Boyd (he looks sorta like Jimmy Wales dad if the right photo comes up on the Wikipedia ad), whose “OODA” strategy is what Microsoft is missing most these days.  I’ve written about Boyd a few times before, and this is perhaps my best article to date about Boyd and his “OODA” strategy.

My thoughts are motivated by a recent post from Microsoft GM of Windows Phones Charlie Kindel.   Kindel can’t understand why the Windows Phone hasn’t been more successful, because he feels it is superior to the alternatives, and particularly to Google’s Android.   He argues in his post that the Windows Phone isn’t more successful simply because Google has less friction in its dealings with the Carriers.  He says that App Developers are mostly irrelevant.  That statement alone leaves me in little doubt about how App Developers should feel about the platform, and it isn’t good.  That’s not all, he further goes on to say that End Users just do what they’re told by advertising and retail sales professionals.  Oh my, Charlie, are you sure you want to be on the record for that too?

Despite all that, he never really does say why the Windows Phone is a superior product, he just asserts that it’s true.  With GM’s like this, its no wonder Microsoft has a problem with their phone.  But the problem actually starts pretty far from one GM and his views, however misguided some like me may think they are.  MG Siegler’s Paris Lemon blog has it right in three words, “Way Too Late”, and this is the problem Microsoft has in general.  Scoble adds further clarity by pointing out that when people buy things, they want to make sure that what they’re buying doesn’t make them look stupid.  In this context, what that means is if they’re going to choose to deviate from the well traveled paths–buy an Android if you want Open/Cheaper or buy an iPhone if you want Best Product–there had better be a really obvious reason to choose to be different.  One they can point out to their friends and get some kudos back for.  It has to be a defensible decision.  Because people hate when their buying decisions make them look like idiots, especially for an obvious visible status symbol and piece of Tech Jewelry like a cellphone.

Markets move by punctuated equilibrium (call it a paradigm change if you prefer, but I like the evolution metaphor) followed by periods of slower innovation and consolidation.  The punctuated equilibrium happens when some massive innovation hits that makes the new product look like a whole new category, and not just an incremental improvement over some other.  Apple and Steve Jobs have made a huge business and a career out of punctuating our equilibriums.  Not long after punctuated equilibrium, the commoditizers show up.  Their job is to give you 80% of what the innovator did at a much lower price.  Let’s not confuse the commoditizers with fast followers.  The latter are more about perfecting an idea that got launched a little before the innovation was done and understood.  Facebook did an awesome job fast following MySpace.

What does all this have to do with OODA?

Let’s start by defining Boyd’s OODA strategy.   The acronym “OODA” stands for Observe Orient Decide and Act.  I’ve written about OODA in the past and enjoyed Boyd’s writings on the subject, which are excellent strategy musings.  Given that it is a strategy evolved for fighter pilot dogfighting, it should come as no surprise that it is primarily a competitive strategy.  The steps are as follows:

-  Observe what the competition is doing.

-  Orient that observation to the market: what does it mean?

-  Decide how you want to react to it.

-  Act on that Decision.

An “OODA Loop” is a complete cycle of gathering the information, deciding what it means, and acting on it.  It is your decision making cycle for change.  Companies alternate between that decision making and the execution needed to deliver the result.  Now here is the important trick:  if your company’s OODA decision loop time is faster than the competitor’s, you will force your competitor to constantly react to your moves and they will fall further and further behind.  Ideally you obsolete their work after they’ve spent as much as possible of the cost and not yet gotten much benefit for it.

Once upon a time, long ago, Microsoft was in a decent position, OODA-wise.  They would see something some competitor was doing, and copy that innovation quickly enough, and with the force of plenty of capital and moementum from their various monopoly businesses, that they had already absorbed the competitive advantage and taken it for their own before the competitor could complete another OODA-loop and develop a new competitive advantage.  For example, they sucked the juice right out of Apple’s Macintosh GUI quantum leap with Windows, and did it fast enough to blunt the Mac’s advance for years.

But, somewhere along the way, things changed and Microsoft didn’t.  The Tech World’s notion of a good OODA Loop got a lot shorter.   Agile techniques were introduced.  Lighter weight and more potent tools replaced the old monolithic C++ style tools.  Apps moved first onto the web and then into the Cloud.  Pretty soon we reached a world where major OODA innovation cycles started taking 1 year, then 6 months, then quarterly, and now monthly in some cases.  Meanwhile, Microsoft never retooled.  Their OODA innovation cycles never seem to get it done in a year, let alone a month.  It takes them a good 3 years to show up to battle, at which point the dog fighters have moved a long ways from the point where Microsoft had aimed.  The puck had come and gone, and they never were skating to where it would be.

This is not the end of the world if a company is an amazing innovator.  Apple doesn’t create the next amazing iOS device in a month either.  But when your business model is to copy and commoditize the innovations of others, it’s tough to be 3 years late to the party, especially for hardware.  With that much lead time you’re no longer delivering a fresh idea at a great price and the incumbent also has the advantage for hardware of having built up a potent supply chain so their own cost basis is lower.

Fundamentally, Microsoft has to learn how to be far more Agile because it lives in an Agile world.  There have been glimmerings back in the Gates days, for example galvanizing the company during the browser wars, but it has been a long time since the Redmondians have been able to turn the ship so swiftly.  If those days are truly behind it, it’s going to be a struggle just to hold onto what they already have in hand, let alone grow.  They must either get much more Agile or much better at Kinect-style innovation (i.e. equivalent innovation much more frequently).

We can look at these different styles versus decision loop speed something like this:

Google and Microsoft are largely commoditizers.  They bring other people’s innovations to the market more cheaply, sometimes by copying, sometimes by acquisition.  They probably don’t like to look at it that way, but it is largely what they’re doing.  The exception is Google’s search business, which they can argue they innovate in, and of course there will be exceptions for MSFT too.  But the important insight is that Google seems to be more Agile, perhaps because of their web upbringing.  They can turn that crank faster and get inside the OODA loop of others.  The Innovators are dropping the dinosaur killers into the pond.  If they are secretive and hide their innovation until it is ready, as Apple does, and if the innovation is truly a revolutionary dinosaur killer and not just a little bit of evolution, they can afford to be pretty slow delivering these innovations.

But, both Commoditizers and Innovators are subject to the OODA loop.  If the market’s reaction to what the players are doing, and the market is driven by the player’s actions, is faster than your OODA decision cycle, you lose.  Right now, Microsoft is flanked by Apple and Google whichever way it tries to go.

About these ads

8 Responses to “Why Microsoft Needs a Fighter Pilot Instead of a Moist N’ Easy Snack Cake Salesman”

  1. Good post, good to see the writings of Boyd used to describe the tech world.

    One of the key, if not the most important points Boyd makes about OODA that is missing from your article is the need to address feedback. Boyd defined OODA as a closed loop because the phases of decision, action and re-orientation (second time through the OODA loop) are punctuated with feedback that must be factored into both short term and long term decisions and actions. If it’s not, it doesn’t matter what actions are taken, they will not produce the results desired.

    To me, as an average consumer who respects what Microsoft has accomplished, it seems that they are missing, ignoring, or are just unable to incorporate feedback from the market into their strategy fast enough to be competitive on the scale they want to be. As such it’s hard to perceive them as an innovative company. I think Scoble’s post about how it’s an app driven world you linked to is a good supporting point — yes hardware is important, if you control it from start to finish, but it’s ultimately about what the hardware enables us to do/make/explore/ etc. You would think that after watching the success of the iPhone, iPad, iPad 2, and Android phone/tablet, they would take this feedback and apply it accordingly.

    http://upload.wikimedia.org/wikipedia/commons/3/3a/OODA.Boyd.sv

  2. Totally agree with your Kindel observation. I had precisely that reaction when reading his post.

  3. Hi Bob

    Like the article on Boyd. Your use of the OODA speed/competitive style matrix to look at some of the new product development of tech businesses is thought provoking. I also have been trying to use Boyd to cover areas outside of the military – take a look at my attempt at a sporting explanation for the Barcelona football team (see link at bottom). I do find that many other factors seem to come into play when using the OODA-loop which end up with an “all other things being equal then the faster OODA loop creates an advantage”.

    In my view, Apple’s strategy of having a slower OODA loop (to allow time for development of the right products) to make fewer but arguably better product decisions than Microsoft and Google is something not really covered within Boyd’s OODA-loop concept. I suppose it begs the question of when organisations have different strategies what comparison can you actually make of the OODA loop timings as inevitably innovation takes longer than copying? For the same strategy I can see that the faster OODA loop is likely to bring more success, provided the slower loop is only slower due to avoidable delays i.e. inefficiencies rather than to deliver better decisions.

    in theory both Apple and Microsoft are likely to be long term losers based on the OODA-loop speed but somehow I struggle to fully believe this. I will be fascinated to see how these tech companies look in a few more OODA loop cycles. I suppose part of the difference is that in many marketplaces there is rarely a winner for ever. Unlike a military campaign or a dog-fight, the market can go on for ever with companies strengthening and weakening. Companies like Microsoft may lose a few battles but will they then re-invent themselves to win again? Thinking out loud maybe the OODA-loop is more applicable to situations where when someone has won then hostilities cease. Just a thought!

    See The Boyd Cycle: A theory of winning
    for the article.

    Regards

    Jon Davies (fellow Boyd fan)

    • Jon, thanks for writing.

      I think the Apple style is covered by the OODA loop strategy. It’s an issue of how game changing your move can be that your opponent has to respond to. If you are a disruptive innovator like Apple, the competition has a much bigger challenge matching your move. Hence your OODA loop can be slow. If, OTOH, you aren’t really innovating but offering the same thing at a lower price (commoditizing) like Microsoft, your OODA loop had better be pretty slow because competition doesn’t have to work very hard to respond. Microsoft’s extremely slow multi-year cycles coupled with their inability to innovate create a perfect storm.

      The cautionary tale for Apple is that innovation is hard. Apple has done more of it than perhaps any other company recently. IBM comes to mind before Apple. But at some point, such companies have to consider what they’re going to do if they can’t generate another big innovation input to the OODA loop. Conversely, what do they do if someone, perhaps unnoticed, if off on the side with a huge innovation that they drop in that trumps some big Apple innovation.

      Companies need to be able to field innovation cycles of all lengths. Not just purely long one and not just short ones. I have to believe Boyd would approve. What better way to keep your opponent guessing?

      BTW, OODA is purely about competition, which doesn’t even always exist when markets are new enough.

      Cheers,

      BW

  4. [...] ‘Nuf said on that theme for the moment other than to add for Steve Ballmer, your biggest problem may be precisely that you don’t have what Marissa Mayer brings to the table as a product person.  You’re a snack cake salesman when you needed to be a fighter pilot. [...]

  5. [...] ‘Nuf said on that theme for the moment other than to add for Steve Ballmer, your biggest problem may be precisely that you don’t have what Marissa Mayer brings to the table as a product person.  You’re a snack cake salesman when you needed to be a fighter pilot. [...]

  6. […] to the day Bill Gates handed the reigns to Steve Ballmer.  I believed then and believe now that Microsoft needed a Fighter Pilot and instead got a Moist N’ Easy Snack Cake Salesman.  Sorry Steve, you’re a good man, but you were not the right man for […]

  7. […] to the day Bill Gates handed the reigns to Steve Ballmer.  I believed then and believe now that Microsoft needed a Fighter Pilot and instead got a Moist N’ Easy Snack Cake Salesman.  Sorry Steve, you’re a good man, but you were not the right man for […]

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
Follow

Get every new post delivered to your Inbox.

Join 321 other followers

%d bloggers like this: