EVEN THOUGH MY LAST MONTHS AT MICROSOFT WERE PAINFUL, I feel lucky to have worked at the company for so long. Not only was it a financially lucrative period in which to be an employee, but I met amazingly smart people and learned valuable lessons about running a business. When I started Room to Read, I wrote down the core principles I had learned at “The Soft” and that I would try to emulate.
Bill Gates was most certainly an inspiration to me, despite my experiences with him in China. I have the utmost respect not only for the company he built, but also for the bold effort he and Melinda have made to use their wealth to immunize millions of children against diseases from which no child should have to die in this modern age. But the majority of the lessons I learned were from the firm’s #2, Steve Ballmer. Bill gets most of the press, but Steve is arguably as important to the company’s success. Bill is the technologist, whereas Steve is the businessman. Any great technology company needs both.
Many of the highlights of my years at Microsoft were the times I spent learning from Steve.
Steve lives, eats, breathes, and sleeps results, results, results. Like a dog with a chew toy, he is manically focused and not willing to let anything distract him from performance. It was a lesson I kept top of mind as I began building Room to Read and sought to differentiate us from the thousands of other nonprofit organizations out there.
One of my most interesting set of experiences with Steve was in early 1996, when he visited the Asia-Pacific region. In my role as marketing director for the region, I attended all of his meetings during the weeklong visit. His first stop was at a review meeting for all of our Southeast Asian subsidiaries, in Kuala Lumpur, Malaysia. The Vietnam team drew the short straw and had to go first.
Vietnam was a brand-new business for the company. The subsidiary faced a formidable challenge. Piracy rates were insanely high—around 99 percent. It was actually easier to measure legal software sales than it was to measure illegal sales. The local managers were in a difficult position because it was nearly impossible to convince a company or an individual to pay $300 for an official version of Microsoft Office when they could buy a pirated version for less than $1 in the local market.
The campaign to convince Vietnamese consumers to buy legal versions was not exactly making the cash register ring. In its first year the local team had badly missed its revenue budget. I was worried that it would be a “lamb to the slaughter” meeting.
Steve was impatient for results and wasted no time letting the team know it:
“Everything I read tells me that a lot of foreign companies are investing in Vietnam. So forget these excuses about Vietnamese consumers not being able to afford our product. Focus on the multinational companies that are opening up offices here. They can afford to buy legal.
“Why have you not sold to Shell? Or BP? They’re investing in Vietnam. Why not Unilever? Or Honda or Toyota or Hyundai or the other car companies? Go to each embassy and get a list of the biggest investors from their country. Holland, Germany, France, Korea, Japan, the U.S., Canada. Those are all countries where business managers are used to buying legal software. I want you to visit all of those embassies. Tomorrow—as soon as I leave.
“Once you have those lists, you have your sales prospects for the next year. And if they won’t buy, then tell them that they’re at risk of being busted. The last thing any expatriate wants is for his cushy all-expense-paid life to be interrupted because head office in Amsterdam or New York comes down on him for giving his company a black eye.
“And enough of this bullshit calling it ‘software piracy.’ It makes it sound like something almost romantic and swashbuckling, like the perpetrators are wearing eye patches and drinking rum with a parrot on their shoulder. Call it what it is—call it theft.
“You were supposed to do $500,000 in revenue this year. You’ve barely hit $100,000. I’ll expect that by the next time we meet you’ll have closed some big deals with multinationals. Four deals, $100,000 each, and you are there. Bang! Done!”
With that, he slammed his big, meaty fist on the desk, jolting several of the Vietnamese teacups an inch into the air. It was classic Ballmer—he cut straight to the heart of the matter with no time for excuses or small talk. And since the team had not given him a solution to their problem, he came up with one and gave them their marching orders to go implement it. If they had a better idea, then great, they could propose it. But in the absence of such, then Steve was not going to sit idly in the conference room brainstorming. His bias was toward action, not talk.
THIS INTENSE FOCUS ON RESULTS WAS THE FIRST PART OF MICROSOFT’S culture that I wanted to emulate within Room to Read. As part of my research, I had talked to a number of people about their charitable-giving history and preferences. From many I heard a derivation of the comment “It’s frustrating, because I give money to various groups, but I never know if they are achieving anything. I keep hearing stories about how the world is a terrible place with lots of problems, and I wonder what they’ve been doing with all the money I’ve given them over the years. Few groups report to me on tangible progress. Mostly what I hear from them are repeated requests for more donations.”
I decided that one way I could differentiate Room to Read was by talking about, and frequently updating, our results. Rather than talking about what we were going to do, I would instead talk about what we had done. Tangible stuff: the number of schools opened; the number of books donated; the number of girls on scholarship. I’d think of it as the Ballmer test. What if I had to do an update for him every quarter? I’d have to show progress or, just like the Microsoft Vietnam team, I’d get my head handed to me.
In 2001 I came up with an idea that is still used today. I set my e-mail signature file to list our results at the bottom of each and every mail that I sent out. It was kind of like a stock-ticker symbol that scrolls across the bottom of the screen on CNBC, with constantly updated numbers. Here is my current e-mail signature file:
John J. Wood
Founder and CEO
Room to Read
World Change Starts with Educated Children
www.roomtoread.org.
“We’re all about results. 200 schools built, over 2,500 bi-lingual libraries established, 1.2 million books donated, and over 1,800 girls on long-term scholarships. Join us in the quest for universal education.”
I discussed with our team that all day, every day, we were now accountable for results. If we collectively sent 300 mails a day, we had 300 opportunities to tell people what we had, or had not, accomplished. Few other charities are so accountable, and we knew it would be a great point of differentiation as we competed for scarce funds.
“We should be really clear that if our donors do not see those numbers going up, they are going to wonder why, and possibly stop investing in us. They have thousands of charities to choose from. We need to give them every reason to pick Room to Read.”
I believe that if every charity held itself similarly accountable, the dollars invested in the social sector would skyrocket. I think that every organization, be it for-profit or not-for-profit, should decide what to measure and put those results at the bottom of their e-mails. Be it the number of meals served to the homeless, the number of students they’ve helped to get into college, or the number of people who’ve had cholesterol screenings, nothing focuses the mind quite like having to broadcast your results hundreds of times per day.
On my frequent travels, I noticed a reminder of this from the private sector. United Airlines touted their number one on-time performance record on each and every napkin. Tens of thousands of times per day, they were telling their customers (and their employees) that this metric mattered. Within a few weeks, I noticed that their flight attendants were much more focused on helping people with their overhead bags so that we could “push back for an on-time departure.” Knowing that they would be measured each month, and having bragged about it, the entire organization was focused on not losing their number one ranking.
DURING HIS EXCHANGE WITH THE VIETNAM TEAM, I NOTED THAT STEVE had treated them with tact and respect. He did not yell at them or cut down their character. He was more than willing to tear into their mediocre results, but he did not attack them personally.
There is a saying within Microsoft that “you cannot attack a person, but you can attack an idea.” Employees had carte blanche to argue with anyone, about anything, regardless of where each person sat in the corporate food chain. Steve was the ultimate personification of this adage, and his example inspired me to encourage vigorous debate within Room to Read as our team grew. At times it could be difficult, as I was used to the early days when I was making every decision. I was sometimes taken aback when new team members challenged me. But I reminded myself that we had hired smart people, and that any decision arrived at after vigorous debate would be better than one decided by simple fiat of the top dog.
For me, the hardest times to accept defeat were when my team argued with me either to grow slower, or to spend more money on overhead to keep up with our growth. I had, unrealistically, thought that we could run the organization on 5 percent overhead and continue to add countries to the mix at an insane pace. But this was easier for me, as I was the guy at the top who did not have to implement daily with too few resources. Thankfully, we had created a culture where anyone could question the CEO. I was not only questioned, I was quite often gang-tackled on these issues. We had an internal joke that I was working the accelerator while other team members were stomping on the brake. In the end, we found a compromise pace of expansion that was unanimously signed off on.
We also hired employees at a faster pace than I had thought necessary. To this day, I don’t regret creating a single one of those positions. I have my team to thank for helping me to see the light of day on these important issues. I plan to continue this tradition of encouraging employees to challenge my thinking.
A THIRD ASPECT OF MICROSOFT THAT I WANTED TO EMULATE WAS BASED on an example Bill and Steve set every day: being data-driven. The belief that everything should be measured, and that every business manager should study every bit of data available about his or her business, permeated Microsoft. It was not enough to know how your Windows NT sales were tracking against budget. You also had to know how they compared to last year, and the year before that, and be able to recite your YOY (year-on-year) growth rate off the top of your head. You also had to know how your revenue compared to everyone of your competitors’, and you were also expected to be able to benchmark yourself against other Microsoft subsidiaries. My team could have had a barn burner of a year, but when we then compared ourselves to Microsoft Switzerland’s growth rate, we realized that we could do better still.
Many late nights were therefore spent studying the numbers. Because my team covered multiple product lines, in eight countries of the Asia-Pacific region, “knowing your numbers” was akin to preparing for an MCAT or an LSAT examination. Or perhaps both, simultaneously. No amount of preparation could ever be thorough enough, but knowing that Steve’s expectations were high, we were ready to die trying.
The hardest of Steve’s visits came in early January of 1996. His arrival date of January 3 meant that I spent most of my Christmas holiday preparing. It was painful to drive into work each day, in our gloomy office park in the faceless suburbs north of Sydney, knowing that most everyone else was at the beach. As the Australian sun was stoking itself for another day of body-bronzing weather, I’d arrive at the office by 8 a.m. to continue our preparation.
The Ballmerism that caused your heart to leap into your throat was “You don’t know your numbers.” Before our annual review with him, I used to have nightmares of his big, bald head yelling these words at me as I clumsily tore through a pile of papers looking for a statistic he had asked for.
The studying, thankfully, paid off in one of the first meetings I had with Steve during this trip to the Asia-Pacific region. He was grilling Paul, the country manager for Thailand, about the business there. Paul mentioned that one of my team members had helped the subsidiary by arranging for all Windows NT certification exams to be translated into the Thai language. Paul said that this had dramatically improved the “pass rate.”
Steve: “So, what are the numbers? What percent of people passed the new Thai version of the test?”
Paul: Silence.
John: “It actually improved the pass rate to eighty percent.”
Steve: “So what? Is that good or bad? I don’t know, because I don’t know the worldwide pass rate, so I have no basis of comparison.”
John: “The worldwide pass rate is fifty-two percent. So in six months we’ve gone from one of the worst pass rates in the world to having one of the highest and being twenty-eight points above the worldwide average. The result is that we’ve gone from less than a hundred people in all of Thailand being certified on Windows NT to over a thousand.”
Steve smiled at me. He nodded to Paul. That was his signal to go on. I hoped this meant his cameo appearances in my nightmares would soon end.
ALTHOUGH STEVE’S QUIZZES ON THE NUMBERS COULD BE TOUGH, I knew that he did it for a reason. He wanted to test how much the manager’s cared about their business. If they were not passionate enough to have studied every facet of their operations, to such a degree that the numbers were seared into their brains, then these managers were not going to make it in Steve’s data-and performance-driven world.
I’ve often thought of Steve while interviewing job candidates at Room to Read. I want to know whether they are passionate and hardworking enough to have studied our organization in thorough detail before interviewing with me. When Erin and I were hiring the first staff to help us run the San Francisco office, my initial interview questions aimed to establish how well they had done their research. Did they have passion? Did they know their numbers?
I was once interviewing a promising candidate for the position of development director. Marcie had years of fund-raising experience and I envisioned having another employee working the phones and securing donations. I wanted this interview to work out. But it quickly became obvious that for Marcie, this was just another job. There was no passion.
“To start, can you tell me how many schools Room to Read has built?”
“I’m not sure. Ten?”
“No. Thirty so far, and we’re building thirty more this year.”
“I did not know that.”
“Do you know how many libraries we have established?”
“No, I don’t know that either. How would I?”
“Well, our results are posted on our Web site, and in our annual report, and also at the bottom of each of my e-mails. Anyway, no worries. Let’s move on to the next question. Can you name the three countries we’re working in?”
“I know you’re in Nepal, and I think you are going into Cambodia,” she said, her voice trailing off at the end.
I knew right away that the interview was over. How the heck could she possibly sell Room to Read to our donors if she was not able to tell them about our results and business model? The candidate we ultimately hired had studied our annual report and our Web site in detail. She had passion. She knew her facts, figures, and, yes, her numbers.
Any new organization will die unless every person it hires has passion for the mission. This is especially critical with the early hires because they will pass along the corporate culture to new employees. Any entrepreneur therefore has to “ding” a lot of job candidates. Hiring only people who have passion, and who know their numbers, is one of many ways I continue to emulate Steve.
ANOTHER LESSON I LEARNED FROM MICROSOFT, AND THAT I WANTED TO implant firmly in Room to Read, was loyalty. And like much else that I took out of Microsoft, I learned this lesson from Ballmer.
Although Steve can be demanding, he is also intensely loyal to his people. Steve could care less were somebody is in the hierarchy. He will talk to everyone within the company if it means he can gather more information and data. On two occasions I learned just how loyal he was to those who worked for him.
On one of Steve’s trips to the Asia-Pacific region, we took the red-eye from Singapore to Sydney for a morning meeting with the Australian subsidiary. We landed just before 6 a.m. I was groggy on four hours’ sleep. Steve, however, looked fresh as a newly laundered shirt. When I told him that our first meeting was not until eight, he clapped his hands together and his voice boomed, “Let’s head out for a run!” It seemed more of an order than a suggestion. Fortunately, one of my favorite running routes was close to his hotel.
Sydney’s Botanical Gardens are squeezed between the central business district and the inner harbor. The hilly terrain provides fabulous views of the Opera House, the city’s skyscrapers, and its famous bridge, from which flies one of the world’s largest Australian flags. Hundreds of trees provide needed shade and a resting place for kookaburras and other native birds. It seemed the perfect place to give Steve an hour’s break from the frantic pace of our week.
The heat of the southern hemisphere’s summer peaks in January. The intense sun, combined with the hills, had both of us sweating hard early in the run. Since I carry about forty fewer pounds than Steve, he was struggling behind me. But I could not escape his booming voice, which shattered the morning calm of the gardens. He regaled me with complaints about areas of the business that were underperforming, and ideas on how we could do better. So much for my theory of the run being a peaceful respite from work. I picked up my pace, in the futile hope that he would then concentrate on his breathing. It didn’t work—as he fell farther behind, he simply yelled louder.
After five miles, we returned to the hotel. As we stood dripping sweat on the polished marble floors, the concierge eyed us with suspicion. I pointed Steve toward the elevators and told him that we had twenty minutes until our first meeting. He wasted no time and began marching across the lobby. But after five paces he stopped, whirled in a quick 180-degree turn, and filled the lobby with his booming voice.
“Hey, wait a second.”
Uh-oh, I thought. He wants to get in one more rant about our dismal sales rate of Microsoft Office in the Philippines.
“You live here in Sydney, right?”
“Yes.”
“Then how are you going to get home in time to change? Do you need to use my shower?”
I thanked him and said that my secretary had thought ahead and booked me a room at the special day rate so that I could freshen up after the red-eye. Before I had finished my sentence, Steve was marching on ahead, not willing to waste a second on chitchat.
As I walked back to the bell desk to get my bag, I was thankful for a small glimpse into Steve’s personality. Here was a guy worth over $10 billion, but he had not lost his human element or his willingness to look out for his team members. He’s a man who demands intense loyalty from his team. He more than reciprocates. In my head, I filed away yet another management lesson.
After two days of meetings in Sydney, we flew to Auckland, New Zealand. The two-hour time-zone change worked against us and guaranteed another night of too little sleep as part of Ballmer’s Traveling Circus. Upon arrival at the hotel at 1 a.m., Steve asked if we were going to run in the morning.
“I know a great route, but our first meeting is at seven a.m., so there won’t be time.”
“So what? Let’s go early.”
“How early? We’d have to go at five thirty, which is exactly four and a half hours from now. Don’t you want to sleep?”
“No, I want to run! Five-thirty it is.”
I gave him a stunned look. Where did this guy get his energy? He quickly sealed the deal by loudly declaring, “I’m running tomorrow morning at five thirty. Either you’re going with me, or I’m going alone. Your decision!”
I could not desert him. Loyalty was a two-way street. Sleep would have to wait for another day.
I arrived in the lobby at 5:33. It was empty except for an impatient Steve looking at his watch, shaking his head, and walking out the door. I vowed to punish him by running even harder than I had on our Sydney run.
Early morning is a beautiful time in one of the world’s most picturesque cities. Like Sydney, Auckland sits on a beautiful natural harbor. Sailboats bobbed in the clear blue water, and the sun began to rise for one of its 18-hour days at this far-southern latitude.
The morning tranquility was soon shattered. Steve was delivering a tirade on how “completely screwed up” the Mac Office marketing team was. Since I was not part of that team, I did not know why, exactly, this subject was germane. I ran faster, which caused Steve to ask me why I was going out of the gate like a jackrabbit. I couldn’t admit that I was trying to escape, and even if I had, he would probably have pointed out that his tirade was like a black hole—a force that cannot be escaped.
I told Steve I was training for the Boston Marathon, and that speed work was essential. He commanded a compromise pace and immediately switched the conversation back to business. As we jogged along the harbor, I noted the curious glances of Kiwis checking out the Human Bullhorn.
THE NEXT TIME I SAW STEVE WAS THE DAY AFTER THE BOSTON MARATHON. In April, Microsoft had its annual Worldwide Sales and Marketing meeting, and Steve’s keynote speech was always the highlight.
I lucked out, as the meeting was slated to start the day after the race. It would be a tight squeeze, necessitating catching flights from Sydney to Boston, running the race, and then jumping on a 6 a.m. nonstop flight from Boston to Seattle. But this meant one less trans-Pacific flight during a year that had been full of them.
I was sore and exhausted after the race, and the 4 a.m. wake-up call made me regret my usual habit of trying to be in two places at once. Limping to my gate, I debated asking for one of those beeping carts on which you see elderly travelers. Once we were airborne, the pilot told us that due to swift headwinds, we would be half an hour late arriving in Seattle. I was worried about missing Steve’s keynote speech. His “call to arms” is a legendary annual ritual that is one part General Patton, one part old-time Southern preacher, and one part Anthony Robbins–inspired “awaken the giant within” motivational speech.
I rushed from the Seattle airport to the downtown Sheraton and walked into the meeting ten minutes into Steve’s presentation. Over 1,000 people were in the room, so I was not worried about anyone noticing my late arrival. Steve’s speech was, as usual, a loud and passionate call to arms. “Push hard to get Windows 95 adopted by our corporate accounts. Grow the Office business by at least thirty percent this year. Take the Netscape threat seriously, and don’t let them gain traction.” Fight them on the beaches, fight them on the sand.
After an hour of Steve’s fiery oratory, the crowd of employees gave him a two-minute standing O. We then walked out of the main ballroom for a break. As I was talking to colleagues, I noticed out of the corner of my eye an entourage moving at warp speed in our direction. It was Steve, with twelve disciples trailing in his wake. As he passed us, he stopped, spun 90 degrees on his heels, and stared me in the eye. Holy shit, I thought, did he actually notice me walk in late? A maniacal grin crossed his face, he raised his right arm (to hit me?), and bellowed out in his inimitable style:
“Three hours and four minutes in the Boston Marathon. Great time! Well run!”
He gave me a high five of incredible force, spun back in his original direction, and resumed his progress. The entourage followed.
“Wait. Stop! How did you know that?”
Another abrupt halt. He grinned and with gusto boomed, “I know everything about my people!”
That loyalty, more than anything else, explains why so many people who have worked for Steve are, to this day, intensely loyal to him. He demands much of his people, but he also lets them know that he’s got their back.
MY HOPE IS THAT EVERY ROOM TO READ TEAM MEMBER FEELS THAT I AM just as loyal to them as Steve was to me. Too many executives demand allegiance from their employees without making the effort to determine how best to earn it. They often remind me of a quote from Thomas Edison: “Opportunity is missed by most people because it is dressed in overalls and looks like hard work.”
My own ways of showing loyalty to employees are simple and straightforward and will never win me any awards for innovation. I believe that collectively, however, they show everyone working for Room to Read that I am looking out for them.
At Room to Read, it all starts with a positive work environment. Our walls are lined with photographs of the students we are helping. Laughter permeates the building, as we will not hire people who lack a sense of humor. We have team lunches with the menu rotating between different Room to Read countries—Vietnamese spring rolls and noodle soup one month, followed by Nepalese chili chicken, then Lao fish curry. I strongly encourage people to take time to exercise. In fact, we opened our office near the Presidio YMCA and its amazing gym and pool.
Does this mean that employees are distracted and don’t work hard? Not at all. We only hire people who have a proven track record of hard work, focus on results, and passion. They work long hours and travel to the ends of the earth to further our mission. My firm conviction is that in return for this dedication, they deserve a positive environment.
It’s also important to emphasize that every victory is a team victory. As the spokesperson for Room to Read, I do most of the speeches and press interviews. I always say, “I am very fortunate to be surrounded by great people who make me look good.” One of our chapter leaders, after hearing me say this to a donor, told me that this reminded her of Lance Armstrong. “When Lance gives an interview after winning a stage of the Tour, he always begins with the words ‘The team was great today.’”
We also show loyalty to our employees through our benefits package. I hesitate even to call them “benefits,” as it makes it sounds as though we think we are doing the employee a favor by providing them. To me, nothing is as straightforward as the idea that an employer should provide health care for its employees.
We recently took a team survey to ask what they thought was lacking, and dental insurance got the highest number of votes. We added it, along with a 401(k) plan. Our CFO’s belief is that by offering a tax-efficient retirement program, and providing a 5 percent employer match, we send the signal that we want our team to be together for the long term and will be their partner in setting aside sufficient funds for retirement. The employer match was an unintentional echo of our challenge grants, in that we’d help employees save for the future if they were also willing to do so.
Of course, we will never let our costs get out of control. We therefore added these benefits incrementally over time. Rather than starting with the King Midas package, our management team decided that as long as we could keep our overhead below 10 percent, we could layer additional benefits on over time. To date it has been a success, and we’ve added new morale-enhancing features to employment at Room to Read each and every year.
Finally, I try to show loyalty through a large number of small acts. It might be dropping by an employee’s birthday party, or surprising Emily, a fellow wine nut, with a great bottle of South African Pinotage. Writing an anniversary card. Buying books that team members might enjoy.
I hope that my gang knows that I am thinking about them, and paying attention to their satisfaction in working at Room to Read. Steve Ballmer’s lesson—that loyalty is a two-way street—will permeate Room to Read for as long as I run it, and hopefully even after I hand over the reins. We have firmly embedded this Ballmerism into our own company culture. The 5:30 a.m. runs, however, I leave to Steve.