This is the eighth installment in a 10 part blog on Microsoft as a practitioner of asymmetric marketing.
8. Cultural Candor
As the tech industry’s leading asymmetric marketer, Microsoft has created and fostered a culture of candor as a means of enabling market 'self-correcting' in times of competitive threat. In brief, candor means to get real, even if it means eating crow. This is something that you can do with a strong tribal leadership model, something I described in the previous installment. One of the key pieces of evidence I use to support this point of view that Microsoft is a 'self-correcting' enterprise is Bill Gates’ internal 1995 memo to his executive staff, the Internet Tidal Wave. It was declassified and made public in connection with the DOJ actions against Microsoft. The memo provides insight into the thinking of the industry's leading asymmetric marketer and demonstrates 5 key elements of a culture of candor.
The Tribal Chieftan Can Change His Mind
In the memo, Bill Gates alludes to having gone through ‘several stages of increasing my view of it’s (the internet’s) importance’. In other words, Gates was changing his mind. He then goes on to say that the internet was even more important than the arrival of the ‘GUI’. This from a man who made a fortune on the GUI.
Praise for the Competition
A culture of candor acknowledges best practices wherever and whoever they come from. In the memo, Gates praises Yahoo, Adobe, Apple, Sun, Lotus, Netscape and others stating that they are doing some things better than Microsoft including the use of the corporate website for marketing purposes.
Get Out of Denial, Be Mindful of Serious Competitive Threats
In the memo, Gates comments that ‘Browsing the web (circa 1995) you find almost no Microsoft file formats’. He then goes into the competitive meat of the matter. He points out that Netscape is ‘pursuing a multi-platform strategy where they move the key API into the client to commoditize the underlying operating system.’ Aha. Here’s the call to action for the soon-to-commence browser wars. Commoditize---that’s a potential kiss of death for an asymmetric marketer. Gates correctly perceived the opportunity that the internet presented to both Sun and Netscape to marginalize Microsoft. He points out the ‘scary possibility’ that some day there would be a scenario where there were web devices ‘far less expensive that a PC which is powerful enough for web browsing.’
Acknowledgement of Asymmetric Effects
In speaking about Adobe Acrobat Gates acknowledges the law of increasing returns and it’s ultimate asymmetric effect of creating a natural monopoly player in a given category. He writes, ‘Once a format gets established, it is extremely difficult for another format to come along and even become equally popular’. In other words, the only strategy for an asymmetric marketer is to pre-empt a competitor before they become established as a de facto standard. In short, Adobe's free Acrobat Reader got locked-in, we got locked out.
Empower Those With Candor
In his ‘Next Steps’ section Gates points out that he was ‘not alone’ inside Microsoft in stressing the importance of the internet and names those who did, thereby empowering candor. By acknowledging those who exhibited fearlessness in pointing out the potential vulnerability of the company from it’s internet competitors, he is providing a rugged cultural platform for continued innovation at Microsoft. In fact, a book was written about this subject. It’s called How the Web Was Won. It’s mandatory reading for asymmetric marketers.
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