This week’s exercise in Party Management (what can we give these disparate folks to do, so they will feel important?), no doubt cooked up by some PR firm on K Street in DC, was to have mini tea bag parties around the country.  The real picture, if you ignored Fox TV : groups of 10-100 people, average age 67 (Fox, this is your demographic), whining in the rain about taxes.

IF someone had been at each event, asking: “Do you make less than a quarter of a million dollars in income per year?”, I can guarantee you that almost all of them would have said, Yes.

And then, with their No New Taxes signs on their shoulders, the interviewer could have asked the final question: do you realize that, under Obama’s budget, you will have a tax reduction?  Boy, that would have spoiled their party.

Is this current crisis an IQ test?  Of course it is: life is an IQ test.  Is it Darwinian?  You bet: life is Darwinian (unless you live in Louisiana, which just voted to put Creationism on school curricula).  Will some lose, and some win?  Absolutely.

The days of Karl, and his antics, are really over.  In fact, the Pentagon’s propaganda office was taken apart by the Obama people this week.  Now, the message of the nation will again come from the White House, and the State Department, and not from the Pentagon. 

Staging goofy tea bag parties against tax increases that the people in the crowds would not be paying?  Was it the ghost of Karl? 

Had to be. 

It certainly was not for the benefit of: the town, the county, the state, the country, the world.  Did it benefit the party?  On the face, the answer would be Yes.  But, a day later, when they all realize that they actually were not paying higher taxes?  Will they have that moment?  Are they smart enough? 

That’s the next test.  Who will they be more angry with, since anger is the currency of the current party hacks?  With the party hacks?  Or with Obama, who didn’t raise their taxes after all?

I’m afraid the answer, again, will be (b).

http://www.thestandard.com/news/2008/03/25/open-letter-intel-ceo-paul-otellini

And I would be interested in any of your thoughts on the letter.

Fixing the subprime mess: A Modest Proposal
By Mark Anderson, CEO, Strategic News Service
02.11.2008

Now that both Wall Street and the federal government have had their turns to take multiple whacks at emergency fixes for what most people call the subprime loan crisis, the results are clear. The first effort, an ad hoc move by central banks to catch the problem in time, turns out to have been too little, if not too late. (The euro folk put in 350 billion euros in just one week last month.) A more recent attempt by Treasury Secretary Hank Poulson to rally private banks worldwide, led to a few large-scale independent cash injections, but no one bought the unified bank action package, and it literally evaporated as individual banks chose to take huge write-down baths one by one (Citibank, $18 billion to 24 billion and counting; Merrill Lynch, $10 billion to $27 billion).

http://www.thestandard.com/news/2008/02/11/fixing-subprime-mess-modest-proposal

If you’d like to see a rundown on this, go to

http://www.thestandard.com/news/2008/02/08/turning-bad-policy-fraud

and then comment either here, there, or both spots.

http://www.thestandard.com/news/2008/02/05/open-letter-steve-ballmer?page=0%2C2

Each of these will be an open letter to a different CEO, and I think they’ll be interesting, hopefully useful to the recipients, and helpful to the companies involved.

I hope you enjoy them as well.

UPDATE: The Industry Standard has merged with InfoWorld and my columns are no longer available.

Below is my original letter:

An Open Letter: From SNS to the CEO

To: Steve Ballmer, CEO, Microsoft

From: Mark Anderson, CEO, Strategic News Service

Dear Steve,

I am writing this first Open Letter to you for two reasons: First, I may have a higher regard for your job performance to date than anyone else, and the reasons for this should be clearly stated.  Second, your job, your own view of your job, and how you manage your time and your company, are all about to go through a radical change, and it is a change which I think may deserve more thought than you’ve planned.

Let’s start with your performance to date.  Sure, the stock has been too quiet, but here is what I see that you’ve accomplished as CEO.  Microsoft was headed directly for the Justice Department grinder, with a near-certainty of being cut into pieces or otherwise legally hobbled, as you took control. It was not unlike someone driving a car at 100mph toward a brick wall, and handing you the wheel at the last possible moment.

Not only did you do a masterful job of handling the federal anti-trust suit, but you also settled the daunting number of state and civil cases brought in its wake.  Even the European Court of First Instance seems, at last, to be on its way to satisfaction.

When you took over, the company desperately needed three jobs well done: settle the Justice Department complaints, re-position the company from legal miscreant to world citizen, and re-brand Microsoft into this more positive set of attributes.

Having done the first, which was hard, you pulled off the second, which was much harder.  You have managed to improve relations with every level of customer and alliance partner.  Countries know that you will do business fairly with them.  Instead of fearing to invest in your shadow, venture capitalists now do it on purpose, knowing you would rather buy out a potential competitor than cut them into unrecognizable bits.

And re-branding Microsoft, the largest re-branding task in history, I thought would be almost impossible.  How do you take a brand that, in my opinion, had acquired a long list of negative attributes, mostly hinging on fear and mistrust, and re-cast it as an ethics-positive, trusted partner?  I suggested at the time that this would be a ten-year project, and you are about half done, but I don’t think anyone could have done it faster.

Your time in office, however, has been almost uniquely constrained, having taken that office from Bill Gates, arguably the best technology market strategist alive (a skillset which often gets hidden behind tales of technical prowess).  To date, you have been almost a CEO-in-waiting on the technology side, first with Bill as Software Architect, and then with Ray Ozzie and Craig Mundie in his place(s).

You have told your own staff that visits, during this period, should be restricted to Customers, Employees, and Alliance Partners, and the results have been predictable and spectacular: great sales in existing products, good operations management, and a rapidly expanding world of alliance partners.  And almost no input outside these areas.

I personally think you have pulled off the impossible.  But let’s be honest here: there was a lot left on the plate.  Now, with Elvis really leaving the building, you are going to be facing a different set of challenges.

I realize that you and Bill have carefully selected Ray and Craig to fill Bill’s shoes, but I think pure delegation would be a misconstruction of your duties as CEO.  While almost all successful technology companies have this kind of tech heros/operations maven partnership at the top, you are nevertheless entering uncharted waters.  And I suggest this, firmly believing that Ray Ozzie and Craig Mundie are already the world’s best at what they’re doing.

Even though you have a great A Team, you are about to become the one, the only CEO at Microsoft.  Until now, even with the board’s backing, you’ve been able to dictate who you’ll meet with, based on the above priorities.  Those days are over.

Sometime this year, Bill is going to leave office, and every problem, technical, political, operations, sales and marketing, IT, product planning, is going to belong to you.  You can delegate, but, for the first time, you can’t constrain.

What does MS need from you now, that it didn’t during your Billg days?  It needs someone integrating the whole affair, just as Bill did when he was CEO.  Although you’ve properly and publicly positioned the company as providing global plumbing, real success in the technology world comes from the top, from someone who sees how his employees’ skills can make future products for future markets for future customers in ways they can’t yet imagine.

I don’t like the word “visionary,” but you will have to be able to integrate global market needs with Microsoft engineering talent to solve new problems well, and intransigent problems better.  You need to create a compelling need within your customers’ lives for your products, not just because they all come from one team, but because they each stand for a series of high-end values.

The launch version of Vista, I think, represents the low point in company history on this score, and surely it eroded the trust aspect in the company’s brand. Your job now is to make sure there are no more Vistas.  That means better communication between programming teams inside the company, and with the thousands of device and software partners on your platform.  You’re going to have to take more responsibility in areas like this that, until now, have been essentially outside your practice.

I would suggest that, in order to make this really happen, you pick up on Bill’s old habit of a week away from campus, studying what is happening outside the company.  Step back, and re-define your job to include everything at Microsoft. Take a complete inventory of what you’re missing on the research and product side.  Invite opinions, anonymous or not, for how to improve the company.  This isn’t just about saving money on napkins and Coke, this is about retrofitting Microsoft to be performance-tuned to fully-integrated leadership.

Finally, I want to congratulate you on moving into the world of acquisitions.  Despite their price, I think both the Aquantive purchase (whose results are already showing in Q4) and the Yahoo bid are spot on.  With the anti-trust actions settling away, MS needs to manage its cash for a better return: not DOJ insurance, or stock buybacks, but global strikes into fast-growing markets.  Microsoft’s future may well be more like Cisco’s than Apple’s.

The “bad” news is obvious: I don’t think you get any choice in taking this on. And the good news has a strong upside: if you do this right, Microsoft will grow beyond even Bill’s wildest dreams.  If you do this right, Microsoft will grow into your own wildest dreams.