Microsoft vs. Apple: The Strategy Gap

By Ken Segall



Most people judge ads by what they see. Good ad, bad ad, end of story.

Of course, it’s a little deeper than that.

As is often pointed out around these parts, there’s a little thing called “strategy” — which is hashed out before creative teams start creating.

Historically, Apple has been very smart about strategy, while Microsoft has been very … shall we say … un-smart.

Now that Microsoft’s new CEO Satya Nadella has appointed Mark Penn to the position of Chief Strategy Officer, it’s a whole new ballgame, right?

Not so fast.

From what we know of Mark Penn, the gap between the quality of strategy at Apple and Microsoft isn’t about to shrink.

mark_penn2.jpeg
Microsoft’s newly minted Chief Strategy Officer, Mark Penn

For starters, Penn has actually been Microsoft’s Executive VP, Advertising and Strategy, since mid-2012. He’s the architect of the company’s tasteless, cutesy and much-maligned “Don’t Get Scroogled” campaign.

Penn has been quoted as saying that this campaign was a success. Not terribly surprising, given his background. To people like Penn, success is determined only by the numbers — with little appreciation for how great brands are built.

Penn was a major player in Hillary Clinton’s 2008 presidential campaign, ultimately “resigning” mid-primary season. A New York Times article in 2008 described him as “a sometimes brusque number cruncher with centrist corporate sensibilities [and] few friends inside the campaign.”

Penn was also CEO of ad agency Burson-Marsteller. According to a 2008 Time Magazine article, Penn’s former clients include “drug companies, a tuna industry group, a tobacco firm and the controversial military contractor Blackwater USA.”

I can assure you, those who work on strategy at Apple and its agency TBWA\Chiat\Day have strikingly different credentials.

To be fair, Penn offers one glimmer of hope for Microsoft fans. It is reported that Penn was behind the Microsoft ad that ran on the Super Bowl, which was actually one of my favorites during the game. (Though many felt it borrowed way too much from Apple’s latest ad style.)

What I’ve learned in my meager career is that strategic decisions have a scientific and emotional component. Apple’s wild success came largely from the fact that Steve Jobs used his head and his heart. He wasn’t oblivious to numbers, but he had a innate understanding of human behavior and made some of his best decisions by instinct.

The world of political strategy is different. It’s all about polls, research and numbers. It’s calculated. It’s about attacks and counter-attacks. It’s all head and precious little heart. This is the world that spawned Mark Penn. And it doesn’t offer a lot of hope to those who’d like to see the quality of Microsoft ads move in a positive direction.

My eyebrows went up when I read of Penn’s appointment, because in researching my book, Insanely Simple, Penn was a featured player in a story I’d heard from a former Microsoft marketer.

So I’ll just end this article by offering up an excerpt from the book. In this chapter, I was talking about branding in general — how Apple expressed its brand perfectly while Microsoft continued to flounder.

The Search for Microsoft’s Values

Just about every company has a mission statement of some sort—an official set of words that describes who it is, what it does, and its reason for existing. Most agencies would consider having this document to be an essential first step toward creating an effective brand campaign.

Yet no one ever bothered to ask Steve for a mission statement before we created the Think different campaign. That’s because he had already given us a briefing from the heart, and even though the company was in serious trouble, its brand essence was well known. If anyone had asked him to hand over such a document, Steve would probably have considered it big-company behavior anyway. We might even have been fortunate enough to see his “rotating turret” in action. [Explained earlier in book.]

Working with Dell was a different story. This was a company that wasn’t very good at describing itself. Had it been able to articulate its brand essence, we could have begun working on a brand campaign immediately. Instead, we had to spend the first few weeks of our brand project figuring out who Dell wanted to be—because who it was at the moment wasn’t working too well.

Microsoft is another company that’s done its share of floundering over the years. Like Dell, it started out setting the world on fire, then somehow lost its direction. It’s still huge and highly profitable, but many of its customers would probably find it difficult to define the Microsoft brand today. While it was once the innovator and setter of standards, Microsoft has lagged behind as revolutions have swept both the smartphone and tablet categories. This sad state is reflected in its stock price, which has been stagnant for over a decade.

Microsoft’s marketing has been spotty for at least as long. Once in a while it manages to strike a chord, then before you know it, it embarrasses itself with something like the “legendary” pairing of Bill Gates and Jerry Seinfeld in a series of TV commercials. Efforts like these fall flat and leave people scratching their heads.

Microsoft didn’t sprout these marketing problems overnight. It’s been battling them for years. A former marketing manager for Microsoft tells a story about a critical time in the company’s past, when new layers of complexity caused it to drift. For the sake of our tale, let’s call him Brian.

When he joined the company, Brian truly loved his job. What he liked most about Microsoft was that “they did things.” That is, the company understood that it was part of a fast-moving industry and didn’t waste valuable time getting hung up on debate. Like Apple, Microsoft understood the value of staying in motion. It was brash too. The executive team knew it could execute faster and smarter than its competitors and considered this one of their great strategic advantages.

Brian loved this aspect of life at Microsoft because it was in such direct contrast to his experience with HP when he worked with its ad agency. He had observed that at HP, process had become more important than progress. “It was all about when the next meeting was going to take place and what kind of muffins might be served with the coffee. There seemed to be more concern about HP than what was going on in its customers’ world,” he said.

It was the Department of Justice investigation of Microsoft that sucked the life out of the company over a two-year period starting in 1999. Fearful that it might run afoul of government investigators, the company became listless in its marketing efforts, with no clear direction forward.

After Attorney General Janet Reno took Microsoft to court, Bob Herbold, then Microsoft’s COO, called a meeting of the minds to calm people down and get everybody on the same page.

The attendee list was a who’s who of Microsoft communications, including the company’s chief counsel and its head of PR. At one point, an executive with responsibilities in community affairs stood up to speak her mind. She painted a picture of a great company unfairly tarnished by the press. Microsoft was doing many good things in this world, she said, and the government simply didn’t appreciate this. The situation was frustrating to all of those who believed in the goodness of Microsoft and the value this company brought to the world.

Her speech built to a crescendo. “They think we’re up to no good,” she said. “They don’t realize that Microsoft is about positive things. We need to help them understand what our values are.”

She paused briefly, allowing that thought to resonate in the room. Then she looked straight at the communications team and said: “What are our values? Are they written somewhere? Does anyone have them?”

In other words, the way forward was for Microsoft to express its values to the world—but even as a Microsoft executive, she wasn’t aware of what those values might be. There was no magic document hidden on anyone’s computer either. The company’s values had never been codified.

From that point, it took Microsoft eighteen months to study itself, crystallize its values and decide what it stood for.

It might have been because of the DOJ legal action, or it might have been because of Microsoft’s inability to maintain its focus—whatever the cause, Microsoft had devolved. It had changed from a company that moved at light speed to a corporate behemoth that had somehow lost the ability to turn words into action.

It was a frustrating time for Brian and his team. But things were looking up for complexity, which saw its opening and went for it.

Suddenly lacking confidence in Microsoft’s internal marketing team, Steve Ballmer looked outside the company to meet this marketing challenge. He turned to polling expert Mark Penn in Washington DC to develop a positioning that would counter the growing public image of Microsoft as a dangerous monopoly. Penn was given the authority to develop a softer image for Microsoft and directed the marketing team to move in a whole new direction: The Microsoft brand would be about “kids, puppies and small businesses.”

Inaccurate as the image was, it did follow a certain logic. If Microsoft wished to be seen as a softer, friendlier company, Penn knew that kids and puppies were slam dunks. A new emphasis on small business would logically counter Microsoft’s image as a dark, dominating force.

Brian’s marketing team was stunned. As far as they could tell, they didn’t have the stories to support the new positioning. Small business, yes. But kids and puppies, no. The closest thing they had to a youth story was Microsoft’s K–12 education software marketing program, which represented only a tiny fraction of Microsoft’s market. Brian was responsible for the messaging to all of Microsoft’s customers, and the warm/fuzzy approach seemed terribly out of place. However, the marketing group had now been expanded by one—an outsider whose expertise was not in marketing—and things would never be simple again.

Brian’s experience continued to spiral. He found himself having to represent ideas he didn’t believe in, which, as we know, is a gross violation of the principles of simplicity. Brian found himself presenting Microsoft’s new kids-and-puppies brand to a meeting of DC lobbyists summoned to Microsoft’s headquarters. It was an all-star cast of extremists on both sides of the political spectrum, including Ralph Reed from the Christian Coalition and Victor Fazio from the left. Under pressure, Microsoft was forced to become an “equal opportunity” kind of company, offending no one. Brian was dispatched to stand up and say, “Here are our new technologies, here’s why they’re good for America, here’s how we’re communicating our ideas to everyone.”

When he left that meeting, Brian felt lost. He actually called his dad to say, “I feel like I’m working for a tobacco company.” He didn’t feel good about himself or his situation.

It’s always shocking to learn that a company as successful or influential as Microsoft or Dell can run into trouble trying to define itself. But that’s the kind of confusion that results when big organizations get bigger—and people lose sight of what makes things simple.

[Reprinted from Insanely Simple: The Obsession That Drives Apple's Success by Ken Segall.]

Like Tweet

Add comment


Security code
Refresh


Back To Top