In the Hutong
As Tim Chen makes his move from the leadership of Microsoft China to his new chair running the NBA here in the PRC, everyone seems to be asking two things: how badly will this damage Microsoft, and why is Tim doing this?
To answer the first question, you have to look at why he was brought into Microsoft in the first place.
The People Artist
When Mr. Chen arrived at Microsoft four years ago, the company faced challenges on all fronts. They were seen as distant and arrogant by consumers and the channel, all of whom ; manufacturers resented the company and brazenly shipped computers loaded with pirated copies of Windows; the government was making noise about Microsoft's perceived monopoly and was openly supporting Linux and other free and open source software; the company was getting no credit for its research and development efforts in the PRC; and, to make things worse, relations between Microsoft's own people in Redmond and Beijing were hardly optimal, fraught by misunderstandings on both sides.
Certainly from an outsider's point of view, all of these things were getting worse - so much so, in fact, that many of us wondered if Mr. Chen had taken leave of his senses by leaving the rapidly-recovering Motorola to go to work for a sinking ship.
As it turned out, the move was a good one for all involved. The company's own press release suggests how things are getting better, but there is more to the story than Microsoft is giving away.
(Note, before I go on, that I am not what you would call a Microsoft fanboy, nor do I consider myself a particular Friend of Tim's. I'm speaking with an outsiders perspective here.)
Turning a Corner
In the space of four years, Mr. Chen ensured that the company reversed its slide with all of its critical audiences, not by micromanaging, but by catalyzing change in each problem area through personal attention and careful appointments of key managers.
Across China, the company began rebuilding its reputation with consumers, enlisting deeper support among the channel, getting key manufacturers to begin paying for pre-installed copies of Windows, reinvigorating its relationships with government across all portfolios and all levels, and making significant progress in its fight against piracy. The government's outspoken efforts to drive the adoption of Linux have faded, and the company is getting more credit for its R&D.
Internally, Mr. Chen pulled the company together by installing experienced, China-savvy leadership in each department. He built a bridge between Redmond and the "sub" in Beijing through increased contacts and an all-out effort to educate headquarters in the challenges - and opportunities - the company faced in China, while at the same time proffering solutions rather than making excuses.
To credit Mr. Chen alone with all of the improvements in Microsoft's fortunes in China over the last four years may be stretching the point. But as my father was fond of pointing out, a fish stinks from the head. At the very least, Mr. Chen was a critical agent of change, applying effort and attention in those places where he saw that properly-applied effort would help turn specific problems around.
What he left behind was a company heading in a far different direction here than it was when he found it, with the people and systems in place to continue that momentum. Assuming Microsoft can choose a successor (whom, for the moment, remains The Player to be Named Later) with a vision that will ensure Microsoft continues to address its problems and grab its opportunities in China, the company's future in the PRC looks bright indeed.
By all rights, Mr. Chen's efforts at Microsoft should have won him greater rewards and opportunities inside the company. In all likelihood, that was not in the cards. Growth for Microsoft is now a matter of adding and acquiring new businesses, and the company's senior leadership is fairly set in place. Mr. Chen's growth opportunities at Microsoft would probably have been largely limited to growing the China business incrementally. That's not a bad opportunity, but it's probably not the sort of thing to keep a guy with solid entrepreneurial/intrapreneurial instincts happy for long. Having to fly economy class on trans-Pacific business trips probably didn't help.
The NBA makes great sense. While people closer to Tim than I have joked that he was making the change to get Olympics tickets, my bet is that he is even more excited by the scope and depth of opportunity open to the NBA in China specifically and Asia generally:
• First, the NBA is seriously ramping up current activities, and they go way beyond player recruitment, licensing, and the occasional exhibition game. The NBA China Games, NBA Madness, NBA FIT Camp, Jr. NBA, and the NBA Cares Tour, plus all of the work with the Olympics, Special Olympics, and Paralympics should keep Mr. Chen busy for a bit.
• Care and feeding of sponsors like Haier (the official HDTV of the NBA), Lenovo, (the official PC Partner of the NBA), DHL Express (the offical Logistics Partner of the NBA in the Asia Pacific region) will be important, as will cultivating new sponsors the NBA wants and needs for its broadcasts and live activities in the region.
• Deeper licensing opportunities, extending past the NBA to include teams and individual players, would benefit greatly from someone like Tim with his experience fighting IPR violations.
• There are a host of unspoken opportunities implicit in cloning the NBA in China. The NBA's partnership with the Chinese Basketball Association has a lot of room to grow.
Plus, let's face it: the NBA is more than sports, it's show business. Hopefully, Mr. Chen will have a lot of fun.