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He Did What He Had To

August 28th, 2013 - 9:01 am

Horace Dediu:

Steve Ballmer’s only failing was delivering sustaining growth (from $20 to over $70 billion in sales.) He did exactly what all managers are incentivized to do and avoided all the wasteful cannibalization for which they are punished.

If anything, Steve Ballmer avoided The Innovator’s Curse. Being successful with new market innovations would probably have led to an even shorter tenure. Destroying prematurely the pipeline of Windows in favor for a profit-free mobile future would have been a fireable offense. Where established large companies are concerned, markets punish disruptors and reward sustainers.

Steve Ballmer will not be remembered as favorably as the man who created Microsoft. But at least he won’t be remembered as the fool who killed it. That epitaph is reserved for his successor.

Maybe instead it’s the board that should quit within 12 months.

The line that really stood out at me though was, “Where established large companies are concerned, markets punish disruptors and reward sustainers.” That might explain why AAPL retreated from its highs and has mostly stayed retreated, with a dismal P/E.

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All Comments   (3)
All Comments   (3)
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I can only think of one company that consistently and successfully developed disruptive innovations over more than about 30 years. Hewlett-Packard, while the founders were in control.
47 weeks ago
47 weeks ago Link To Comment
"Destroying prematurely the pipeline of buggy whips in favor for a profit-free mobile future would have been a fireable offense."

FIFY, Horace

That's a lot of dumb/ass-kissing in a few short paragraphs.
47 weeks ago
47 weeks ago Link To Comment
Apple of 1997 doesn't really count as a "large company" - it was a bit player, and bit players win by disrupting the big boys.
47 weeks ago
47 weeks ago Link To Comment
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