Tag Archives: Company Formula

Focus is unique, vital and creates value – Lesson learned, Microsoft?

I am always late with news and that’s why I don’t blog about news. Others are much better at that anyway. I am late with news because the news sensation doesn’t interest me that much. I am more thrilled to see what’s going on after the news broke. What comes after the big bang is more crucial than the actual bang. But much too frequently, the sensation dominates the web and its long-term impact is not of interest. That’s really dangerous, and it’s even existential.

Let’s take a recent example of huge news, the Microsoft Yammer deal for $1.2 billion. It’s been huge because the number is really big. And now stories go on and on if Microsoft’s decision was right or wrong and if they paid too much and why. All is followed by lively discussions on Microsoft’s strategy, motivation and odds for making this a success story. And Microsoft probably enjoys this unusual level of attention and feel good about it.

Truth is, every company has its own DNA, its own winning formula in its markets. This can change over the years and successful companies do change a lot. At the same time, they maintain their raison d’être.  Some call this corporate strategy, but I don’t like it.

I like to call it focus. Focus is unique, vital and creates real value.

If a company executes a losing corporate strategy but maintains focus, it will sooner or later correct this strategy. But if the company loses focus, it’s the worst thing that can happen. Losing focus really destroys value. Being focused also means always being proactive. Now, acquisitions generally look like the acquirer is very proactive. And here it get’s tricky. This might be true for some acquisitions, but sometimes, acquisitions are also either a result of being not proactive enough (you may also call it innovative) or, even worse, an alarming sign of lack of focus. And when I hear that Microsoft’s R&D budget is $9.6 billion of which 90% is directed to the Cloud and at the same time $1.2 billion is spent on acquiring a social enterprise networking company, I feel like Microsoft’s losing focus of what they are and want to be. Eventually, this will destroy a lot of value, much more in fact than overpaying a few hundred millions for an acquisitions.

That’s not the news Microsoft seems to focus on. But this will eventually have a bigger impact.

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