Can Bill Gates fix what he created?

02/09/2014 12:00 AM

02/08/2014 9:27 PM

Bill Gates joins a long line of founders, from Steve Jobs at Apple to Michael Dell at Dell, who threw themselves into trying to fix what they created.

It doesn’t always work.

Gates will stick around while new Microsoft CEO Satya Nadella restructures the company. Having stepped aside as chairman after 33 years, Gates will be a director and work part time as Nadella’s technology adviser.

The hope is that the cofounder of the world’s largest software maker will help it recapture the innovation and invention that set it on its way in 1975.

Yet for every Jobs who returns to Apple and invents an iPhone, there’s a case of someone who should have left his corporate creation alone.

Richard Schulze complicated Best Buy’s rejuvenation efforts with a takeover attempt last year. Chip Wilson’s remaining as Lululemon Athletica chairman impeded the search for a CEO as sales growth slowed. Mike Lazaridis and his BlackBerry cofounder explored buying the struggling smartphone maker after he was ousted as CEO. Even as far back as the early 1900s, Billy Durant made such a hash of things after he built General Motors that he was forced out twice.

“A founder brings a moral authority and charisma back to the company that can make it possible to make changes that others couldn’t muster,” said Jerry Davis, a professor of sociology at the University of Michigan Ross School of Business in Ann Arbor, Mich. “The problem comes if the source of the original success isn’t what’s needed to be successful in the future and they can’t make that change.”

Jerry Yang’s experience at Yahoo is an example of what can happen when a founder confronts a landscape that’s altered more than he realizes, Davis said. Yang started Yahoo with David Filo in 1995 and watched it grow from a relative distance as its business manager. He became CEO in 2007 after the company lost its lead in Internet advertising to Google. He said he was prepared to fight it out for the long haul.

Two years later, the stock had lost 60 percent of its value and he’d quit under pressure for spurning a $47.5 billion takeover bid from Microsoft and failing to broker an online advertising deal with Google.

In the beginning, “he built a great search engine,” Davis said. “When he came back, he wasn’t able to figure out what to do next. Things change. IBM used to make computers. GE used to be an appliance company.”

When Gates left the CEO job in 2000, Microsoft controlled 93 percent of consumer computing devices, which at that point were mostly PCs. The company had less than 20 percent 12 years later after the market swelled to include smartphones and tablets – most not running on Microsoft software.

A major criticism of Gates is that he missed the mobile trend. He was part of the management group that began to develop small-screen devices long before Apple, and failed to deliver. The iPhone came out in 2007, when he was Microsoft’s chief software architect.

The 58-year-old cofounder has also been out of the day-to-day game for a long time. He’s said his philanthropic work will occupy at least half of his time.

Still, Gates is the programmer who saw the need for a unified operating system for the fledgling PC in 1981, and Microsoft’s successful efforts to use its monopoly with Windows to win the Internet browser war of the late 1990s almost led to a government-ordered breakup. Microsoft continues to sell more software than any other company.

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