BackThe 5 strategy rules of Bill Gates, Andy Grove and Steve Jobs
David Yoffie and Michael Cusumano find common leadership lessons from the tech titans of Microsoft, Intel, and Apple in the new book, Strategy Rules
Premium
If there were a Mount Rushmore for technological innovation, Bill Gates, Andy Grove and Steve Jobs would be the faces looking outward. The longtime CEOs of Microsoft, Intel and Apple have created three of the most highly valued companies in the world. But how were they able to steer their companies through the volatile ups and downs of decades of changing technologies? What did they have in common? And what can we learn from them about successful strategy?
Those are the questions David B. Yoffie and Michael A. Cusumano address in their new book, Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove, and Steve Jobs. “I have known all three of these individuals," says Yoffie, the Max and Doris Starr Professor of International Business Administration at Harvard Business School. “By looking at what they had in common, I thought there was a great opportunity to understand what distinguishes a really great strategist from your average CEO."
Gates, Grove, and Jobs’s Five Keys to Success
As they examined what the three CEOs had in common, however, Yoffie and Cusumano homed in on five key strategies that any manager, entrepreneur, or CEO can learn.
• Look Forward, Reason Back
• Make Big Bets, Without Betting the Company
• Build Platforms and Ecosystems—Not Just Products
• Exploit Leverage and Power—Play Judo and Sumo
• Shape the Organization around Your Personal Anchor
Bill Gates was able to envision a world in which there was a computer on every desk at a time when personal computers didn’t exist. But he also realized that the way to capitalize on that future was to focus his energies on controlling software, not hardware.
Andy Grove foresaw the eventual break up of the vertically integrated computer industry, and was able to specialize in creating the core component of computing—the microprocessor. And then he championed that silicon part with the famous “Intel Inside" marketing campaign. “The notion that you could brand a product that no one had ever seen and that no one understood what it did was brilliant," says Yoffie.
Steve Jobs saw a future in which consumers would move beyond the computer to use a range of electronic devices for entertainment and communication and then systematically rolled them out one step at a time—the iPod, iPhone, and iPad.
Building an Ecosystem
Gates was the first of the three to demonstrate another of Yoffie and Cusumano’s lessons: “Build Platforms and Ecosystems—Not Just Products". Early on Gates realized that no one product could provide a lasting competitive advantage, but if consumers became hooked on a particular platform, such as the Microsoft operating system, then you could roll out new products that they would adopt, such as Word, Internet Explorer, and Windows Media Player. Even more importantly, such platforms would allow creative developers outside your organization to add their unique value.
Grove faced a crucial decision regarding Intel’s own platform when in the late 1980s his engineers figured out a way to make a more efficient processor that nevertheless wouldn’t be compatible with Intel’s previous architecture. After agonizing about the decision for a year, Grove chose to stick to the platform Intel had already developed, even if it meant jettisoning a potentially better product.
Interestingly, Jobs stubbornly held out the longest in his vision of the product as supreme—pushing the proprietary Mac as the central hub of Apple’s product line despite falling market share. Eventually he was persuaded to shift focus and allow the iTunes music platform to be used on PCs as well as on Apple iPods and iPhones. That decision, of course, was a game-changer, establishing Apple as the dominant player in mobile computing.
All three CEO-strategists, however, were self-aware enough to surround themselves with executives who helped compensate for their own weaknesses. Gates, for example, knew his strength was not in operations, so he brought in an outside COO to run the day-to-day operations. In the same vein, Jobs nearly destroyed Apple in the early 1980s by trying to do too much himself. When he returned in 1997, Tim Cook was one of his first hires to run operations, which allowed Jobs to focus on overall strategy and design.
Michael Blanding is a senior writer for Harvard Business School Working Knowledge.
©2015 Harvard Business School. All rights reserved.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
