How do smart people at Microsoft keep making mistakes?

The Zune seems to be having little success at this time. Microsoft, by some estimates, spent $!0 Billion and 5 years to develop Vists, its new operating system. It keeps on losing against Intuit, is about to go up against McAfee and Symantec, is behind Google on innovation, continues to fail with enterprise software. Yet, the company has more smart people than anywhere else. What is happening? It seems that the processes are not in place, and an intellectual snobbery slows down the ability to bring really great products to market.

Many People who think they are "good" are really not

The absence of evil does not mean that someone is "good." Yet many people who would never lie, steal, cheat, kill, or break the law, think of themselves as good people. Yet they may never do a stranger a kindness, put another ahead of themselves, or inconvenience themselves to help another.

A few days ago, I heard someone say that while he is looking for a job, he has no time to help anyone else. Yet, it is while looking for a job for oneself that one is most likely to come across an opportunity for another. I hear of many people who engage in questionable business practices, such as paying someone who is in a difficult financial position far less than it is worth for an idea or piece of property. No wonder that so many went along with back-dated stock options, channel-stuffing, or null trades.

The $ value of perceptions

We all know that perceptions can be worth money. Whether they are of an individual or a product, changing perceptions can change the amount of money you can earn or the price people will pay for a product. Once it was thought that Advertising adds value, but we now know that the components are far more complex than advertising alone.

So if this value is real, then it can be measured and managed. However, few do. Perhaps the purest example of this are the companies or private equity firms which buy old, tired brands and grow their value. There are several tried and tested methods to do this. None of them are magic, just good management.

Finance or Marketing - which are the real business people?

There seems to be a continued version of C. P. Snos's "two cultures" in business. Twenty years ago, marketing provided more CEOs than Finance, whereas now, the reverse is true. The fact is that business needs both disciplines. However, having said that, many marketers are not disciplined. There is a tendency among some to admire undirected creativity, and to consider measurement to be a constraint. The fact is that marketers can only succeed if they apply the same processes that finance people do to measurement. Good marketing needs to be treated in much the same way that an engineer treats physical phenomena. Develop a solution from first principles, and then test the outcome, first in the lab, then in the real world. Sadly, now, some marketers are not business people at all, whereas all finance people are.

People are so separated from each other

Fights and arguments are so common, that we wonder why. People regularly think the worst of others. Instead of giving others the benefit of the doubt, we assume that the other meant to attack, put down, or take advantage of us. In fact, that is not often the case.

We see it in flame wars in online discussion boards. Yet, a simple commitment to always be polite and kind soon puts a stop to this. If we would resolve to do this all the time, people would be more successful at everything they do.

What really is turning around a company?

This Week's Business Week had a cover story about how private equity companies are extracting unearned fees from companies they buy. In far more cases companies are being revitalized and renewed. Turning around a company is not easy, but neither is it new. American Standard was one of the great turnarounds of the 1970s, but successful turnarounds were extremely rare until the past 20 years. In the past, almost inevitably, a company in decline was irretrievably doomed. The existence of Chapter 11 in the US (most other countries only have some form more similar to Chapter 7), encouraged management (even if it is new management) to try to fix the company.

However, a true turnaround is not just cosmetic, but repositioning the company for future growth. Continental Airlines is such an example, and Chrysler certainly seemed to be that, though the changes may have not been deep enough.