The guest blog-post below originally appeared on Forbes’ website.
The Big Leadership Lessons I Learned Almost Failing To Create Xbox For Microsoft
I had the good fortune of working on two very successful businesses during my 22 years at Microsoft. Beginning in 1992 I contributed to the development of the Microsoft Office business, from a set of individual apps chasing Lotus and WordPerfect to a unified suite that was an industry leader. Fast forward three years, and serendipity struck a second time, as I had the opportunity to lead the creation of the Xbox business, starting a brand that is now a major success story in the consumer space for Microsoft.
Today, most assume that Xbox was somehow destined to be a winner, but having been Microsoft’s chief Xbox officer, I am here to report that its early years were much more like a ship on the rocks than a sloop cutting through the waves. I tell much of the strategic background to those early years in my new book, Xbox Revisited: A Game Plan for Corporate and Civic Renewal, including the challenges I faced personally as the senior executive of the project.
The original Xbox ran into significant development challenges and almost missed the crucial Christmas holiday season for its launch. We ultimately achieved some reasonable market share in the U.S. and northern Europe, but we struggled to get a foothold in southern Europe and had almost no success in Japan. Yet all of those issues paled in the face of our poor financial performance, which included losing more than $5 billion during the life cycle of the product.
Fair or not, the price of leadership is that you are responsible for outcomes regardless of circumstances and regardless of whether you had good or honorable intentions. When you are in charge of a business that struggles despite your best efforts and all the dedicated work of your team, your very sense of self is challenged.
I’ve never felt lonelier in my life than during the dark days of the Xbox experience. My sense of ultimate responsibility, my frustration with my own inabilities and limitations, and my feeling of helplessness as the group running the project failed to come together created a dramatic crisis and rocked my self-confidence.
To make matters worse, I was totally preoccupied with the work at the cost of my family and personal life, creating a conflict between my career ambitions and my commitments as a father and husband. Six months before the original Xbox shipped, I tried to resign.
As I reflect on surviving the near-death Xbox experience, which we turned around using a strategy process called the 3P Framework to create Xbox 360, what advice can I provide to those who might follow in my often misguided footsteps? How can others avoid some of the mistakes I and other leaders have made? I would humbly suggest the following:
- Step away. Almost every leader’s first instinct is to dive into the engine room to fix problems he or she sees. At the depths of the Xbox process, I found myself up late at night doing manual DVD testing to identify flaws in the Xbox DVD drive. Although that level of engagement theoretically shows that you are part of the solution, it is almost always a mistake. Instead, take the time to step away from the keyboard and elevate your attention to the broader issues. How and why did we get here? What are the root causes of our dysfunction? How can I use strategy, team design, delegation, and other macro tools to guide us in a better direction? If you dive in, you encourage the team to cede responsibility to you. If you step back and provide guidance, you empower them to take ownership.
- Simplify and focus. When things are going badly, there is rarely one obvious problem. In fact, the issues are usually more like a giant knot of yarn, rich in complexity with threads running randomly through the organization. To untie the knot, you can’t pull on every part of it at once. Instead, you have to reduce your activities to a few focused efforts that are both urgent and important. As you begin pulling on those areas, more clarity will emerge, and logical next steps will appear. The secret to solving complex problems is actually radical simplicity.
- Issue an S.O.S. We are all taught that self-reliance is key for accountability and leadership, but I’ve learned that the reverse is often true. When things are going badly, the height of leadership is knowing who to ask for help. This is not an invitation to hire a bunch of consultants but rather a suggestion that you find people uniquely qualified to provide new ideas and approaches. My boss treated my resignation letter as a request for help, which he gladly answered by rejecting the letter and working with me to change my leadership style. That was the end of the beginning for me, and it enabled me to rebuild the team and create a set of new opportunities for the business.
- Find your inner grist. Being in the depths of a crisis strikes at the core of your being and challenges your very soul. As an individual, you have to believe that you can lead the team successfully and fix the issues you face. If you have this type of faith in yourself and in others, it will become a force-multiplier, making you and the team stronger. You also must consciously decide to persevere regardless of the obstacles, and in the process have the courage to make difficult make-or-break decisions. I’ve heard several people recently define this combination of faith, perseverance, and courage as grist, a wonderfully rough-hewn word that clearly communicates what it takes to transform crises into opportunities. There is no logical, rational reason why Xbox was successful, but the team absolutely had the grist required to do what others thought was improbable.
- Leadership is all about team. It is easy and somewhat understandable to get self-absorbed when you are responsible for a project in crisis. During those Xbox trials, I certainly fixated on what I should do differently and why I was failing. I took a sabbatical shortly after the launch of the first Xbox, and with the help of some fabulous advisers, I realized that I was not the secret to success. Instead, the team around me held all the keys required to unlock our potential. My job was to give them the necessary strategy framework and direction and then allow them to apply their unique skills to improving our results. Great leaders find a way to attract the right people, and the right people form great teams, and great teams win.
People often say, ”Never let a good crisis go to waste.” I’m certainly not one who searches for problems, but as a leader you inevitably run into situations that make you wonder if you have the skills to carry the day. It is at that moment, when the ship is about to hit the rocks, that great leaders reveal the ability to turn the crisis upside down and create opportunity for themselves and their teams.