An Abdication of Leadership

By Robbie Bach – Speaker, Author, Consultant, and former Chief Xbox Officer

Dear Tech Bros:

I spent 22 years at Microsoft, learning and growing professionally during an explosion of tech opportunities. I had the privilege to participate in and then lead the creation of two important businesses (Microsoft Office and Xbox) and benefited from Microsoft’s financial success.

Now fifteen years after I left Microsoft, I marvel at the dominance of the tech sector over the US economy, and in fact the world financial system. The top eight public market cap companies in the world are US based technology companies. Adding the influence Silicon Valley and other US tech centers have collectively, one can argue there has never been this level of economic power concentration in history. Certainly not since the industrial revolution.

And that is my problem. With great power comes great responsibility. And you, the Tech Bro leaders of the sector, are failing.

I am a strong believer that capitalism is the best form of economic organization. Free markets and competition lead to efficient allocations of resources and the best outcomes for society as a whole. And yet, I know it has flaws. It can lead to short-term profiting over long-term costs. It doesn’t price in externalities like environmental or social damage. It can lead to an expanding wealth gap between the owners of capital and workers. And it can generate boom/bust economic cycles. We are seeing many of these downsides right now.

In the past, we counted on government to manage these issues. But the Trump administration, with help from Elon Musk’s chain saw, is working feverishly to reshape and eliminate any guardrails and protections. That same government is inserting itself into the economy by taking ownership interests in businesses, demanding support for various policies by threatening companies with government scrutiny and regulation, and making it clear that other policies can be relaxed in exchange for contributions and other support. Greedy capitalism and government grift are becoming ordinary business.

Corporate leaders are an important line of defense against these actions. And as the CEOs at major tech companies and venture capital firms, you are the most powerful people in the country. With that power comes obligations beyond making the most money possible for this quarter’s earnings. Five years ago, most of you had processes in place to police and manage misinformation and hate speech. You had diversity goals because you claimed it led to a better workforce. You also had environmental objectives because you professed to care about the future of the planet.

Then in the blink of an eye everything changed. Managing hate speech was sacrificed at the alter of additional ad revenue and lower costs. Diversity became a dirty word, somehow banished in the rush to avoid Trump scrutiny. And the rise of the AI machine meant that the environment was no longer important because the beast required energy at any cost. Your cynicism was real and on display.

But you went further than just shifting policies. Sucking up to the administration has become an art form – attending inaugurations, having joint PR lunches, and staying silent on policy and social issues. All of this culminated in the tech community’s ridiculous support for the President’s new ballroom. There is no legitimate business reason for a tech company to pay for “renovations” of the White House other than to buy the President’s support. Word is that the price of entry to the White House is $1 million. You have crossed the line from expediency to complicity.

Your defense is that you are accountable to shareholders and are doing what is best for the stock price. I think that is a convenient but remarkably narrow point of view. Businesses benefit from the positive economic environment in our country. You benefit from a well-trained workforce and local communities who welcome you into their neighborhoods. A stable democracy creates markets where people invest in infrastructure, buy your products, and support you in your efforts outside the United States. In fact, success is not based on a series of short-term optimizations – rather it is based on a long-term commitment to the people, communities, and markets around you. You are responsible to more than just your shareholders; you must support a broad set of stakeholders to be successful.

This abdication of leadership never ends well. When the current Jenga blocks fall – as they inevitably will – some of you will be quick enough (or big enough) to survive the disaster. Most will get buried under the rubble, leading to the inevitable calls for support and a bailout. Either way, the rest of us will suffer from the economic and political fallout. This is the downside cycle of unfettered capitalism and corporate leaders who don’t think broadly about their responsibilities.

During the industrial revolution, government ultimately stepped in to break up companies that had become too powerful and too focused on their own self-interest. As a policy matter, it was decided that the concentration of influence was bad for the country. Given the Trump Administration’s desire to benefit personally from the current situation, we can’t look to the government for solutions. They have become part of the problem.

So, we are left with you, the Tech Bros.

Elon Musk, Mark Zuckerberg, Sundar Pichai, Jeff Bezos, Andy Jassy, Tim Cook, Satya Nadella, Jensen Huang, Dario Amodei, Sam Altman, Marc Andreessen, Ben Horowitz, Peter Thiel, and others. And as recent events in Venezuela and the attacks on Fed independence demonstrate, the Oil Bros and the Jamie Dimon acolytes are now playing a supporting role.

All men. All successful. All powerful. It’s not clear to me why you get to make substantial choices that affect all of us, but that is where we are.

I said earlier that “with great power comes great responsibility.” The antonym is that “power corrupts and absolute power corrupts absolutely.” You have serious and important decisions to make that will determine the future, not just for the tech sector but for our economy and country as a whole.

While I am not confident, I remain hopeful that some of you will take your hands away from the keyboard, think clearly about the long-term implications, and choose wisely.

Respectfully,

Robbie