Microsoft Exec Relates His Experiences
Published: Thursday, January 24, 2013
Updated: Friday, January 25, 2013 14:01
Last Friday in the Newton Room of Corcoran Commons, the Winston Center for Leadership and Ethics hosted guest speaker Robert Bach, former president of the entertainment and devices division at Microsoft, at the Center’s Lunch with a Leader Program. The program, which focuses on offering students the opportunity to meet and engage with prominent business leaders, allowed Bach to speak to both his experiences at Microsoft and his take on the value of leadership.
“I want to talk a little bit about the Xbox experience from a strategy perspective,” Bach said.
After briefly introducing the room to his experiences and background up until working with Microsoft (including his role in the implementation of Microsoft Office in the ’90s), Bach detailed his oversight of the launching of Xbox–a revolutionary gaming system that aimed to afford gamers an incomparable experience.
First envisioned in 1999, Xbox was Microsoft’s initial attempt at entering the video gaming market, and sought to outperform, and outsell, Sony’s PlayStation 2. “There was not really a whole lot of strategy behind the original Xbox besides making it bigger and more powerful than PlayStation 2, and to do so really fast,” Bach said on the planning behind the gaming system. After Bach and his team decided that Xbox consoles would need to ship by the holiday season of 2001, the research and development groups at Microsoft had only 18 months for design, production, and global shipping. “[Xbox] needed differentiation and needed to get [into homes] soon,” he said. Bach, responsible for heading the project, explained the initial struggle that Xbox faced–over the course of five years, Xbox lost about $6 billion.
“The reason we were losing that money was because we had to sell each console at the price [Sony] was selling PS2s,” Bach said. “So we lost about $50 to $100 on every console.” Despite having shipped on time, Xbox systems were expensive to manufacture: each console’s production cost exceeded its selling price.
“We decided we had to do a much better job on thinking about a strategy,” Bach said.
In a determined response to overcome the first Xbox’s challenges, Bach and his team developed a “3-30-300” plan–an extensive documentation of the goals for the future of Microsoft gaming experiences and an explanation of what developers hoped the new Xbox would become. The idea was to first write a three-page synopsis for the company’s new idea–the Xbox 360. The document laid out in just three pages a simplified summarization of the product’s purpose–the essence of what those working on Xbox 360 wanted the product and business to become. Once the three-pager’s purpose was comprehensively understood by those working on the project, it was forwarded to a group of leaders within Microsoft who then turned the “outline” into a 30-page, in-depth explanation of the document, providing the more advanced facets of the concept. The more elaborate analysis expounded upon in the 30-pager was finally communicated to the Xbox team, who then composed a 300-page exposition on the detailed specs on every aspect of the product.
Xbox 360 dominated the video gaming market and is now closing in on 100 million units sold. Still selling eight years later, the console has surpassed Microsoft’s market longevity expectations of five years and has become one of the most profitable and highest-selling videogame consoles of all time.
“Xbox 360 was made smaller, opened to a wider audience, content was altered, and a new tagline for the product was established: ‘Jump In,’” Bach said on the inclusiveness and wide-ranging appeal of the Xbox 360. “The market share went from about a 90 percent male gaming audience to about a 65-35 [percent] male-to-female gamer demographic.”
Bach holds that the success of Xbox hinged on three basic rules he considers necessary for the success of any business endeavor: “Purpose, principles, and priorities.”
“Simplify your vision,” Bach said. “When it comes to priorities, have five absolutes–five unwavering primary concerns and stick with them … Know your purpose and the purpose of your product in two sentences–it made all the difference for us and our team between Xbox and Xbox 360.”
On a broader note, Bach emphasized three other factors that have contributed to his success and formation outside of the business world, one of them being the importance of “having a really strong faith in your goals.”
“If you don’t have a strong faith in what you’re trying to accomplish, how can you get people to follow you?” Bach said. He also encouraged a willingness to be open to serendipitous events in life, and noted the relationship between skill and hard work: “When you can’t outsmart, outwork.”
After having led the division responsible for the Xbox, Xbox 360, Windows Games, Windows Mobile, and the Microsoft TV platform, Bach retired from Microsoft in 2010, and now serves as the chairman of the Boys and Girls Clubs of America’s National Board of Governors. He also engages in consulting work for both non-profit and for-profit companies by walking them through the same process that made the Entertainment and Devices Division at Microsoft the success it is today.
The Winston Center’s Lunch With a Leader Program stimulates discussion on leadership and ethical responsibility between students and leaders within their fields of businesses and communities. For more information, please visit: http://www.bc.edu/leadership.