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INNOVATION / MICHAEL SCHRAGE

Diversify Microsoft's Board, Billy! I Mean That

September 09, 1993|MICHAEL SCHRAGE | Michael Schrage is a writer, consultant and research associate at the Massachusetts Institute of Technology. He writes this column independently for The Times

TO: Bill Gates / Microsoft Chairman & CEO

EX: Mickey the Agent

RE: A New Sense of Direction

Billy! Great to hear from you! Gotta tell you, doesn't matter if they're stained-glass or newly washed, whenever I see windows, I think of you. I mean that. Sincerely. You're worth every billion.

But, Billy, what's all this about a Justice Department antitrust investigation? The antitrust thing has even gone global now that the European Community is examining Microsoft for predatory practices. Not good!

Now, I hate to be the one to break it to you, Bill, but there are a lot of people out there who just don't like you and Microsoft. They think you're too rich, too powerful and too smart for their own good. They think you want to be the John D. Rockefeller of the Information Age, and so they want to pull a Teddy Roosevelt and trust-bust you.

But don't worry! I've got a way to start turning down the heat. Ready? Two words: Colin Powell.

Put Powell on the Microsoft board of directors. The retiring general is politically astute, politically correct, global, understands and appreciates high technology and can handle humongous egos. He knows Washington. He has credibility. The right people will take and return his calls. You can learn from him.

Let's be honest here, Bill. Have you taken a good look at your board lately? They're a great bunch of guys, but what you've basically got is an inside board of seven rich white guys, almost all from Silicon Valley and Seattle, including you. Don't you think that's a little, ahh, provincial? Do you really believe your board adequately reflects the kind of company Microsoft wants to be?

When the do-gooders at the Justice Department, EC and the various "We-Hate-Microsoft" factions of computerdom see a board like that, Bill, what do you suppose they think? They think the board of the most powerful software company in the world is little more than the Bill Gates fraternity. That can't be true. Right, Bill?

So take some of the heat off yourself: Pick directors who don't look like cronies. A world-class company needs a world-class board. Use the board to send a message to both the company and the world about what you and Microsoft stand for. An active Colin Powell on your board is probably worth more to Microsoft--internally and externally--than a phalanx of lobbyists.

Now, sure, anybody can advise that you get a Warren Buffet or Henry Kissinger on the board. Maybe you should . . . but, Bill, why not build the sort of board that makes people think twice about you and Microsoft? Why not pick directors who make it far more difficult for people to believe the worst? Why not have a board that gets Microsoft looking beyond the next generation of technology and toward the next generation of global markets?

Of course, it would be great to have QVC's Barry Diller, TCI's John Malone, CAA's Michael Ovitz or News Corp.'s Rupert Murdoch on your board--Microsoft clearly wants to be a player in the multimedia convergence of hardware, software, telecommunications and content.

The catch, of course, is conflict of interest. If you have cable people on the board, you annoy the telephone people. If you have telephone people on the board, you alienate the cable people. If you have both of them on the board, you annoy the Justice Department. So avoid media folk until the market shakes out a bit more. (Although Oprah Winfrey would make a heckuva board member. She's smart, outspoken and rich.)

But Microsoft wants to be global, so get some truly global directors. Why not Mikhail Gorbachev? That would shake things up a bit. He knows what it's like to run a large organization. He appreciates high tech. You could learn from him. People would take his calls.

Or how about Lee Kwan Yu, Singapore's former ruler. Sure, he's a bit despotic, but hey, you know all about that, right? He understands Asia, and the Chinese love him. He's also crazy about computers and built Singapore's industrial policy around them. He'd probably leap at the chance to be on your board.

Or maybe Makato Kuroda, a former vice minister at Japan's Ministry of International Trade and Industry. His English is excellent and his connections impeccable. He was on Salomon Bros.' board in Japan.

Richard Branson could be ideal. He's an adventuresome Euro-Brit who sold Virgin Records for $1 billion--so he understands the music business. Like you, he never graduated from college. He's truly a global entrepreneur. (Ever fly his Virgin Airlines?) His management style is quite different from yours, but he also loves to compete and win.

If former National Institutes of Health Director Bernadine Healey wasn't running for senator in Ohio, she'd also be a catch. She understands the value of intellectual property, had a decent reputation running a $9-billion-a-year global medical research enterprise and has a good sense of the health care economy. You really should get somebody from the health care industry on the board.

Perhaps Judy Lewent, Merck's chief financial officer, would fit that bill. She has an excellent reputation. She understands the economics of R&D in an increasingly competitive, capital-intensive industry. And Merck is as global as they come. Merck probably should have a board-level relationship with Microsoft. You might also want to consider someone from the consumer products or cosmetics industries. Remember, Microsoft is selling the brand as much as functionality.

Of course, it wouldn't hurt if the Microsoft board had an ethics expert like Brandeis University's Sissela Bok, or maybe Nadine Strassen, the head of the American Civil Liberties Union. Increasingly, Microsoft is being confronted with the sort of legal and ethical issues that require board-level consideration.

Gotta hop . . . Lou Gerstner's on the other line . . . Gee, it sounds like he's crying.

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