Bill Gates – Strategic Thinker & Leader? Executive Summary The purpose of this report is to explore the published work on strategic leadership in order to develop an inventory of qualities, skills and behaviours that define and explain the concept of strategic leadership. A full review of literature on this topic aims to shed light on this definition. Having discussed and defined this concept the report will then focus on Bill Gates, former CEO of the Microsoft Corporation, with the aim of answering the following question.
Is Bill Gates a Strategic Thinker and Leader? Introduction Throughout history we will recall that in the past, the word “leader” conjured up visions of an almost mythical figure astride a warhorse, slaying dragons or single-handedly rallying troops to achieve victory over superior foes. These leaders projected their authority so that others would follow; they could do any task better than their followers. They achieved success through personal tenacity, brute strength, and physical boldness, sometimes at the cost of their own lives.
Much of the initial work in leadership theory revolved around the idea of identifying the traits of popular political and military heroes such as Caesar, Wellington, Roosevelt and Churchill. However, the problem with the ‘great man’ approach was that no congruent body of traits could be identified, that much of leadership success was evidently dependent upon the particular situation. Nevertheless, the tabloid press helps us to think of the corporate leader as the great man. For instance we often read of Bill Gates or Jack Welch as if they were primarily responsible for many years of success at Microsoft and General Electric.
Although both were unarguably highly effective chief executives, what is it that drove these men and their companies to their success? What is Strategic Thinking? Many theorists say the ability to think strategically is the key to leadership success. While vision and results may be outputs of strategic thinking, the ability to think strategically involves much more. One definition is that of (Liedtka 1998) who stated that strategic thinking is an individual activity, but one that is supported by organizational contexts and dialogue. Strategic thinking, to some it is about creativity and to others analytical.
Mintzberg (1994) referred to it as a synthesizing process that utilizes creativity and intuition, whilst Porter (1987) stated that good strategic planning was a necessary contributor to strategic thinking. Hanford (1995), states that it requires taking a high-level, long-term view that includes reflection about the past as well as creativity regarding the future. According to Stumpf (1989), strategic thinking involves an interrelated set of skills encompassing; motivating, controlling, planning, delegating and setting objectives. These in turn influence the leaders’ ability to • Know the business markets Manage subunit rivalry • Find and overcome threats • Stay on Strategy • Be an entrepreneurial force • Accommodate adversity This supports the definition provided by (Bonn 2004). That strategic thinking is a way of solving problems that combines both rational and convergent approaches with creative and divergent thought processes. We will see later how Gates epitomized Stumpfs theory. What is Strategic Leadership? Strategic Leadership is more than just strategy and planning. It’s about handling the human element as well as the task issues and doing so in such a way that engages people instead of alienating them.
People in organisations particularly have a number of basic needs, one of which is some idea of certainty about the future. Effective strategic leaders provide that certainty by having a clear vision and workable strategies for bringing that future into reality. Vision is a key facet in the ability to think strategically. Research by Collins and Porras (1998) stressed the necessity for leaders to have a vision and beliefs about the desired future and outcome. This links to the views of Senge (1990) who stated that a genuine vision is “a calling rather than simply a good idea” (p. 142).
The ability to share this vision helps to provide a sense of direction and meaning to the decision making process (Liedtka 1998). Liedtka (1998) also recognises the need for hypothesizing. Strategic thinking has to be hypothesis driven which again links us to the need for creativity along with analysis. Hypothesis testing involves “ What if…? ” (creative) followed by “If…then” (critical analysis). This ability to use causes and effect transcends leadership thinking to another level. Leadership at the strategic level is about setting the direction for the organisation as a whole, getting policy and strategy right and making things happen.
It frequently involves organising and reorganising the way things operate in the organisation and relating the organisation to other organisations and society as a whole. Effective strategic leaders, in the words of Prof. John Adair, need to ‘release the corporate spirit’. Literature Review Over the past 10-15 years research on leadership theory and has provided considerable support for the effectiveness of transformational and charismatic leadership in organisations. The focus of such leadership models centers on the leader’s creation, communication, and implementation of a vision.
Vision as defined by Larwood and Falbe, 1995, and Strange and Mumford, 2002, is a highly desirable and vivid future organisational state that motivates followers, as cited in Groves, 2005. Infact, most current academics argue that exemplary leaders are described by their followers as visionary and inspirational (Rafferty and Griffin, 2004; Bass and Avolio, 1994; Conger, 1999 in Groves, 2005), while recent empirical studies demonstrate the powerful effects of visionary leadership at the individual, group, and organisation levels.
Beginning as early as the late 1980s, leadership academics have examined emotional Intelligence skills as key predictors of effective visionary leadership. Empirical studies by Howell and Frost (1989), Holladay and Coombs (1994), Awamleh and Gardner (1999) and Den Hartog and Verburg (1997) assessed the relationships among vision content and communication style using trained actors as leader figures and students as followers reporting their perceptions of visionary leadership, charisma, and leadership effectiveness.
The results of these studies and others generally support the relationship between an emotionally expressive communication style, characterised by eye contact, facial expressiveness, effective gestures, and vocal variety, and follower perceptions of visionary leadership, charisma, and leadership effectiveness. Emotional Intelligence appears to play a critical role in such leadership, suggesting that further study on the effects of emotional intelligence and leadership behavior is warranted.
Mary Parker Follett (1987) describes leadership in holistic terms when she states that it is the leader who “can organise the experience of the group … it is by organising experience that we transform experience into power. The task of the chief executive is to articulate the integrated unity which his business aims to be … the ablest administrators do not merely draw logical conclusions from the array of facts … they have a vision of the future” (quoted in ampden-Turner and Trompenaars, 1994, pp. 341-2).
The model developed by Westley and Mintzberg (1989), suggested using drama to describe the process of visionary leadership, see figure 1. They suggested that the repetition stage, was the equivalent of rehearsal – ‘crafting’ the vision. Moving next to representation – whereby the leader communicates the vision which leads to buy from the audience – assistance stage. Later I will apply this framework to the work of Bill Gates Figure 1: Using drama to describe visionary leadership (adapted from Westley and Mintzberg, 1989)
The Vision Communication Buy In Rehearsal Performance Audience Westley and Mintzbergs framework echoed that proposed by Bennis (Bennis and Nanus, 1985) who defines leadership in terms of the capacity to create a compelling vision, to translate it into action, and to sustain it. Bennis’s 1985 study of 90 successful US public figures identified the following leadership skills: ? The ability to create a vision that others can believe in and adopt as their own. Such vision is long term in its orientation.
The leader uses vision to build a bridge from the present to the future of the organization. ? The capacity to communicate that vision, and to translate it into practicalities. ? The ability to create a climate of organisational trust. Trust acts as emotional glue that unites leaders and followers in a common purpose, and helps achieve the outcomes of that vision. Further study by Hickman’s (1992) in his influential Mind of a Manager, Soul of a Leader was first published in 1990. Hickman (1992, p. 7) suggests that “the words ‘manager’ and ‘leader’ are metaphors representing two opposite ends of a spectrum. Manager’ tends to signify the more analytical, structured, controlled, deliberate, and orderly end of the continuum; while ‘leader’ tends to occupy the more experimental, visionary, flexible, uncontrolled, and creative end”. Hickman (1992) notes in this context McNamara’s First Law of Analysis, which states that a person should “always start by looking at the grand total. Whatever problem you are studying, back off and look at it in the large”. Hickman suggests that when a leader wishes to view this full picture, they may do so by simplifying it.
The leader searches for patterns, connections, frameworks, or concepts that encompass all the confusing details surrounding a particular issue. As a result of this inclination, leaders tend to create simple visions or perceptions of reality, encouraging a philosophy of ‘keep it simple’ (KIS). Leaders use the detail to find patterns and frameworks in order to simplify the complexity. Hickman (1992) suggests that when leaders want to enhance their effectiveness, they pursue dreams because dreams represent new visions and new possibilities. Leaders may evaluate their performance on the basis of dreams achieved.
Bill Gates personal response to the vision and innovation was through his ‘think weeks’ (Heritage, 2006), whereby dedicated time is spent developing proposals, demonstrating the leadership buy-in that contributed to Microsoft’s success. It was, however, on one of these retreats, that when pushed for time, email was scrubbed off the priority list! Zaccaro 1996, categorised existing literature on leadership into four bodies of major theories: conceptual complexity, behavioral complexity, strategic management, and visionary/inspirational leadership.
Visionary/inspirational leadership theories and models include theories of charismatic and transformational leadership. The common theme is that leaders develop and use their vision to structure and to motivate collective action. Considerable emphasis is placed on empowerment and development of human resources, especially subordinates. These models of leadership offer a number of characteristics that enhance a leader’s ability to lead, including cognitive abilities (e. g. , creativity, reasoning skills, intelligence, verbal ability), self-confidence, motivation, propensity for risk, and social skills.
One definition of vision comes from Burt Nanus, a well-known expert on the subject. Nanus defines a vision as a realistic, credible, attractive future for [an] organisation. Nanus goes on to say that the right vision for an organization, one that is a realistic, credible, attractive future for that organization, can accomplish a number of things for the organization: • It attracts commitment and energizes people • It creates meaning in workers’ lives • It establishes a standard of excellence • It bridges the present and the future
Another definition of vision comes from Oren Harari: “Vision should describe a set of ideals and priorities, a picture of the future, a sense of what makes the company special and unique, a core set of principles that the company stands for, and a broad set of compelling criteria that will help define organizational success. ” A FORMULA FOR VISIONARY LEADERSHIP Burt Nanus sums up his concepts with two simple formulas (slightly modified): STRATEGIC VISION X COMMUNICATION = SHARED PURPOSE SHARED PURPOSE X EMPOWERED PEOPLE X ORGANIZATIONAL CHANGES X STRATEGIC THINKING = SUCCESSFUL VISIONARY LEADERSHIP
Each one of the terms places unique and special demands on the strategic leader. If you can put these elements together in an organisation, and you have a good vision to start with, you should be well on the way to achieving excellence. Collins and Porras (1998), affirm: “The function of a leader – the one universal requirement of effective leadership – is to catalyze a clear and shared vision of the organisation and to secure commitment to and vigorous pursuit of that vision. ” It is this definition of a leader I will use to answer the question of whether Bill Gates is a strategic thinker and leader. Findings
Over the past 30 years much has been written and spoke about Bill Gates, some good, some bad and some ugly – what is without doubt is that for over 13 years he was the richest and most powerful man in the world. All this from the basic guiding vision of “Every business and household must have a computer and must run Microsoft software” Nanus describes visionary leadrship like this: “A vision portrays a fictitious world that cannot be observed or verified in advance and that, in fact, may never become reality” (emphasis added). However, if it is a good mental model, it shows the way to identify goals and how to plan to achieve them. Look at Winston Churchill and Franklin Roosevelt: they said, This is what it’s going to be. And then they did it. Big, bold changes, forcefully articulated. When you get leaders who confuse popularity with leadership, who just nibble away at things, nothing changes” (Tichy and Sherman, 1994, p. 298). “In the new culture, the role of a leader is to express a vision, get buy-in, and implement it. That calls for open, caring relations with employees, and face-to-face communication. People who cannot convincingly articulate a vision won’t be successful” (Tichy and Sherman, 1994, p. 48). Gates was born and grew up in Seattle Washington USA. His father, William H. Gates II, was a prominent lawyer, his mother, Mary Maxwell Gates, served on the boad of directors for the Interstate Bank and the United Way. His parents recognised his intelligence and enrolled him in Lakeside, a private school known for its intense academic environment – it was here that Bill Gates was first introduced to computers. Gates went on to Harvard University and while there teamed up with Paul Allen, a childhood friend and co-founder of Microsoft, to write a new ersion of Basic programming language for the first personnel computer the Altair 8800. The company was impressed with Gates and Allen’s work and licensed the software resulting in Gates and Allen forming the company Microsoft to develop software for other companies. Bill dropped out of Harvard to spend more time on the new business. After dropping out of Harvard, Bill Gates and his partner Paul Allen set about revolutionizing the computer industry. Gates believed there should be a computer on every office desk and in every home. In 1975 the company Micro-soft was formed, which was an abbreviation of microcomputer software.
It soon became simply “Microsoft” and went on to completely change the way people use computers. The success of Microsoft began with the MS-DOS computer operating system (OS) that Gates licensed to IBM, it is rumored that he ‘borrowed’ this from a close colleague, also rumored that the initial meeting was set up by Bills mum. It was this licensing and stipulation that all applications must use MS-DOS to be compatible that give Microsoft the monopoly and set the standard for home computing. It was practically impossible to purchase a computer without Microsoft pre-installed, unless it was a Mac (another study! Microsoft used its position as keeper of the OS, as a way to destroy the opposition – it was about being the best, but being the only one. Over the next few years Microsoft was continually updating its OS and keeping ahead of the competition. Gates oversaw the invention and marketing of the MS-DOS operating system, the Windows operating interface, the Internet Explorer browser, and a multitude of other popular computer products. Along the way he gained a reputation for fierce competitiveness and aggressive business savvy.
During the 1990s rising Microsoft stock prices made Gates the world’s wealthiest man; Gates looked invincible, inconceivably he missed the rise of the internet. As late as 1993, Windows has no net access built in, Gates saw the Web and email as a passing fad. However, he turned it around within a year and released Windows 95 – 100% internet compatible. With his great success in the computer software industry also came many criticisms. With his ambitious and aggressive business philosophy, Gates or his Microsoft lawyers have been in and out of courtrooms fighting legal battles almost since Microsoft began.
The Microsoft monopoly sets about completely dominating every market it enters through either acquisition, aggressive business tactics or a combination of them. Many of the largest technology companies have fought legally against the actions of Microsoft, including Apple Computer, Netscape and sun Microsystems. “Bill brings to the company the idea that conflict can be a good thing,” says Steve Ballmer, ex-Harvard colleague and current CEO of Microsft. “Bill knows it’s important to avoid that gentle civility that keeps you from getting to the heart of an issue quickly.
He likes it when anyone, even a junior employee, challenges him, and you know he respects you when he starts shouting back. ” The contentious atmosphere can promote flexibility. The Microsoft Network began as a proprietary online system like CompuServe or America Online. When the open standards of the Internet changed the game, Microsoft was initially caught flat-footed. Arguments ensued. Soon it became clear it was time to try a new strategy and raise the stakes. Gates turned his company around in just one year to disprove the maxim that a leader of one revolution will be left behind by the next.
Rob Glaser, a former Microsoft executive who now runs the company that makes RealAudio, is an admirer who compliments Gates on his vision. But, he adds, Gates is “pretty relentless. He’s Darwinian. He doesn’t look for win-win situations with others, but for ways to make others lose. Success is defined as flattening the competition, not creating excellence. ” When he was at Microsoft, for example, Glaser says the “atmosphere was like a Machiavellian poker game where you’d hide things even if it would blindside people you were supposed to be working with. “
It comes down to the same traits that his psychologist noted when Gates was in sixth grade. “In Bill’s eyes,” says Glaser, “he’s still a kid with a startup who’s afraid he’ll go out of business if he lets anyone compete. ” Esther Dyson, one of the industry’s fabled gurus, is another longtime friend who shares such qualms. “He never really grew up in terms of social responsibility and relationships with other people,” she says. “He’s brilliant but still childlike. He can be a fun companion, but he can lack human empathy. ” “If we weren’t so ruthless, we’d be making more creative software? We’d rather kill a competitor than grow the market?!? Conclusions In part Bill Gates fits into the frameworks provided by Westley and Mintzberg (1989) and Bennis (1985) with the ability to create and communicate his vision – however, his single-mindedness and obsessiveness with crushing the opposition led to a lack of trust and integrity. Bill Gates epitomizes the work of Stumpf (1989), throughout the early years Bill Gates was: Motivating – the desire to achieve his vision Controlling – the systematic way he monopolized home computing Planning – the calculated way that Microsoft became the OS of choice, Delegating and setting objectives – Involving key players in his mission
In turn he achieved the following: • Knew the business markets • Managed subunit rivalry • Found and overcome threats • Stayed on Strategy • Became an entrepreneurial force • Accommodated adversity Thus, strategic vision is part style, part process, part content, and part context, while visionary leadership involves psychological gifts, sociological dynamics and the luck of timing. True strategic visionaries are both born and made, but they are not self-made. They are the product of the historical moment.
This research suggests that, despite their great skills, it is a mistake to treat leaders such as Bill Gates as possessing superhuman qualities. He is the product of the times, of his followers, of his opportunities. As times and contexts change the visionaries of yesterday fade into obscurity, or worse, become the villains of today. His story is an extraordinary one. Windows may not be the best operating system in the World, but computers needed a standard and he and Microsoft provided it. If he hadn’t someone else undoubtedly would had but maybe not with the same degree of obsessiveness and drive.
Affirming Collins and Porras (1998),: “The function of a leader – the one universal requirement of effective leadership – is to catalyze a clear and shared vision of the organisation and to secure commitment to and vigorous pursuit of that vision. ” In short Bill Gates is a visionary thinker and leader of his time – but without the opportunity and IBMs millions would he have been able to take his chances. Since the turn of the decade Microsoft has had more failures than success; Google is on the march to become the Microsoft of the 21st Century. Further Study
The effectiveness of long-term vision is crucial to the long-term health of any organisation. At all levels, leaders must make trade-off decisions, generally with the use of resources. Critical trade-offs reflect a choice between current effectiveness and projected future effectiveness , whether to do more research and development on a future, qualitatively superior software system, or to buy more of the available system; whether to make the investment in current technology or wait for the next quantum step. Each decision is surrounded by risk, imposed by cost and the uncertainty of future developments.
Strategic leadership is a balancing act, a thin line between maximizing present effectiveness, and maximising future effectiveness, decisions that, to some extent, are mutually exclusive. Resources expended today in the wrong direction become a loss. This is why strategic vision is crucially important to organisations. Strategic leadership is a risky business. Strategic decisions are rarely clear-cut. There will always be uncertainties and often ambiguities. Contributing to the uncertainty is the fact that decisions must be made with some set of presumably valid assumptions in mind.
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