Caged lions

Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove, and Steve Jobs. By David Yoffie and Michael Cusumano. Harper Business; 272 pages; $29.99 and £18.99.

ADULATION of its leaders is a feature of the information-technology industry. Dozens of books sing the praises of Bill Gates, Andy Grove and the late Steve Jobs, the famed bosses, respectively, of Microsoft, Intel and Apple. Attempts to compare and contrast these chief executives, however, are rare. Reducing this deficit is the mission of “Strategy Rules” by David Yoffie, of Harvard Business School, and Michael Cusumano, of MIT’s Sloan School of Management. And the book provides plenty of insight to help navigate a world that is ever more driven by IT.

The authors find many similarities between their subjects. All three men were in the right place at the right time—when in the 1990s the IT industry shifted from being dominated by vertically integrated giants to a structure made of horizontal technology “layers”, such as microprocessors and operating systems. All three were relentless, ruthless and even reckless enough to dominate one or more of these layers (although Jobs, in his first incarnation at Apple before he got fired in 1985, lost against Mr Gates because he wanted to keep control of most layers).

As Jobs’s idiosyncrasies show, the three men had different approaches. Each one excelled at particular things that were crucial in his field. Mr Gates’s strength was in software and strategy, both needed in abundance to establish an operating system. Mr Grove focused on discipline and execution, which explains Intel’s unmatched capacity to churn out chips. And Jobs was obsessed with detail and design. That turned out to be secondary in personal computers (PCs), but proved vital in smartphones.

The lessons the authors draw from all this may sound classically business-school, but they are particularly important in this fast-moving industry. One is to “look forward” to spot industry shifts early, and then “reason back” to work out what to do about them. Mr Grove moved heaven and earth to keep his firm on the trajectory predicted by Moore’s law, which holds that the number of transistors on a processor doubles roughly every two years.

Yet the most important lesson is that in order to make it big in IT, one has to offer not just products, but platforms. These are the foundations for entire chunks of the IT industry, as Windows is for PC software. Mr Gates was the first to understand this. Mr Grove realised it only ten years later, when he had to decide whether to move to a new chip technology. And it took Jobs, the archetypal “product guy”, another decade to exploit fully the power of platforms by making iTunes available on Windows, thus turning it into the dominant platform for digital music.

The authors could have dug deeper into why both Microsoft and Intel are a lot less relevant today, as number-crunching is moving to mobile devices and computing clouds. Microsoft came late to both. As for Intel, most smartphones and tablets do not have its processors inside, but instead use chips based on designs by ARM, a British company. Apple once again is the exception: Jobs relaunched the firm around mobile devices when he returned to take the helm in 1997.

One reason for the relative decline of both Microsoft and Intel, the authors argue, is that both Mr Gates and Mr Grove allowed the people they hired as deputies to succeed them. As chief executives, these “complements” in the end proved to be disappointments. Another risk is that an organisation that is set up to expand and protect one platform eventually becomes a cage that keeps its IT lions from conquering new territory. The industry’s latest leaders of the pride, Google’s Larry Page and Facebook’s Mark Zuckerberg, for example, would certainly devour another book by Messrs Yoffie and Cusumano on how to avoid such a fate.