Bob's Gutsy Leadership Blog

Microsoft – Finally Killing a Marginal Project!

One of the hardest things to do in a large organization is to stop an effort that has been on-going for years.  Microsoft provided a great example recently of doing exactly that.  It takes a lot of guts for a leader to take such an action.

As background, Microsoft opened its first store in 2009.  The press saw it a blatant move to copy Apple’s success with tony glass and wood boutiques in a chic location.  The company’s leadership at the time believed it needed to keep up with Apple.

Unfortunately, the stores never came close to the impact Apple had with their stores.  This is not surprising, since Microsoft is mainly an enterprise software vendor, with its revenue dominated by its great relationships with small, medium, and large size businesses and government customers.  The stores were useful in promoting the Microsoft Surface and the Xbox gaming tool but concerning Microsoft Windows on PCs and the Office productivity tools, they were very well-known products, and stores were certainly not needed to tout their benefits.

From a business perspective, Microsoft had 83 stores generated less than 1% of the company’s roughly $140 billion of current annual revenue.  This compares to Apple’s 751 stores generating 12% of its annual revenue.

The one plus for Microsoft’s stores during their 11-year life was to provide a strong assist in the introduction of Microsoft Surface, a product people really did want to see and understand since it was so unusual for Microsoft to launch such a product and it looked so interesting.

In today’s world, Best Buy provides just as good a way to see and talk to a knowledgeable person about products such as Surface and Xbox.  That further weakened the argument to keep the stores, so current Microsoft management took the bold step very recently to shut down all the stores.

Stepping back, the fact is most leaders have great difficulty killing projects.  Here are three key reasons why:

1.) Lack of Guts to Confront the Advocates – People responsible for struggling projects develop all kinds of creative arguments regarding why stopping the effort would be a mistake.  They don’t want to admit it is of questionable value, and they worry they might lose their jobs.

2.) Killing a High-Profile Project Will Suggest You Are Not “With It” – In the case of the Microsoft stores, as outlined above, they just aren’t as exciting as Apple stores.  But store-proponents will claim stores are cool and are needed to maintain Microsoft’s leadership image.

3.) Fear That You Are Stopping the Effort Too Soon – This is a very common weakness of leaders.  They continually hope that a big surge in impact is just around the corner. It leads to a lack of focus as too many mediocre projects drag on.  That leads to bloated organizations, bureaucracy and unacceptably high costs.

Hats off to Microsoft for making a tough decision…Learn from it!

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