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From politics to advising Microsoft's chief, not without noise

From politics to advising Microsoft's chief, not without noise

By Nick Wingfield, The New York Times | Updated: 4 March 2014 13:49 IST

Mark Penn has spent years spinning for politicians in Washington. Now his own career is the subject of spin here at Microsoft, where he has been handed a fresh role under its new chief executive.

Penn, 60, joined Microsoft in 2012 as a senior adviser to Steven A. Ballmer, the chief executive at the time, and later came to oversee its advertising. On Monday, he was named chief strategy officer for the tech giant, a role that seemed to position him as a critical adviser to the company's new leader, Satya Nadella.

After news of Penn's new job leaked over the weekend, his supporters at Microsoft trumpeted the change as effectively a promotion and a validation of the data-driven polling tactics he brought to Microsoft from his political career, which included work on Hillary Rodham Clinton's 2008 presidential campaign.

(Also see: Microsoft's Nadella confirms Bates, Reller departures in restructuring drive)

His detractors at Microsoft, though, pounced, pointing out that Penn was losing control of Microsoft's hefty ad budget in the change. At Microsoft, money is power, far more so than an impressive-sounding new job title, said these people, who spoke on the condition of anonymity to avoid friction with Penn.

The divided reactions to his new position show how Penn has become something of a Rorschach test for his colleagues at Microsoft. Some see him as a thoughtful adviser who rubs hidebound colleagues the wrong way by presenting them with useful data on messaging and strategy that runs counter to their intuition. Others say he massages his research, conducted through the polling of consumers, to bolster his own preconceived ideas.

"I wouldn't say they're cooked numbers, but they've certainly been spiced," said one critic at Microsoft.

That view is apparently not shared by Nadella, who sent an email to Microsoft employees on Monday afternoon announcing Penn's new job as well as several other executive changes. In it, Nadella praised Penn for his "blend of data analysis and creativity," which recently helped shape an ad campaign that began during the Super Bowl.

"His focus on using data to quickly evaluate and evolve our campaigns has driven new insights and understanding," Nadella wrote. "Mark and his team also will continue to provide input in the area of competitive research and analysis.

"I am looking forward to applying Mark's unique skill set across a broader set of challenges facing the company, from new product ideas to helping shape the overall areas of strategic investment."

Feelings about Penn within Microsoft run hot partly because of an attack campaign he initiated against Google after he arrived at the company. The "Scroogled" campaign, which included a website and various commercials, sought to conjure consumer concerns about Google by highlighting its privacy practices.

Many in the tech industry thought the campaign was tacky, a view shared by a sizable faction at Microsoft, especially on its engineering teams, according to company employees who spoke on the condition that they not be named while criticizing their employer's ad campaign.

What is more, the campaign seemed to do little to move the needle where it matters most - in Microsoft's competitive battle in the search market, which Google still dominates.

But Penn has argued that the campaign was a success, especially given the relatively low amount of money the company spent on it. He has said that it prompted a discussion among consumers about Google's privacy policy that had barely existed. Microsoft has commissioned research to underscore those points.

Part of what seems to rub Penn's colleagues here the wrong way is his willingness to use negative advertising to go after a rival, a tactic honed in his campaign work for both Bill and Hillary Clinton. Penn was the mastermind behind the "3 a.m." television commercial during the 2008 presidential campaign that questioned whether Barack Obama was prepared to be president.

Penn is also a divisive figure among Clinton loyalists, many of whom blame him for pushing too hard to portray her as a strong commander in chief during the campaign, rather than seeking to humanize her for the voters.

Penn has had a long relationship with Ballmer and with Bill Gates, Microsoft's co-founder and former chief executive, whom he advised during the company's antitrust battles.

Ballmer asked Penn to join the company full time to help shake up its marketing. Many people within Microsoft felt the company had been too passive in allowing competitors to portray it negatively in the press.

Apple's "Get a Mac" campaign, featuring a bumbling nerd and a hipster, spent years attacking Microsoft's Windows software as bug-ridden, virus-prone and just plain uncool.

After Penn arrived at Microsoft, he made it clear that his approach would be heavily reliant on data. At a meeting of 100 or so senior Microsoft leaders early last year at the Suncadia Resort, about 90 miles east of Seattle, Penn gave a speech in which one of the themes was "don't trust your gut," according to several people present who asked not to be named because the event was private.

The speech focused heavily on the vital role of data in decision-making, with examples from the political world. He described how one of the most effective fundraising emails the Obama campaign had sent out to potential donors contained the subject line "Hey," which he said it arrived at through testing.

Ted Schadler, an analyst at Forrester Research, said decisions in advertising in the technology industry are often based on the "loudest voice in the room," but Penn brings a different perspective. "He's good at asking questions and getting evidence," Schadler said.

A key question is how Penn's new job will change his influence at the company. His official responsibilities will include advising Microsoft's chief executive about whether the company has the right mixture of products and investments. That appears to be a further stretch from the political background of Penn, who still lives in Washington, D.C.

One political strategist who has worked with Penn said that he was "not a warm and fuzzy guy" and that he had a strong point of view that he often tries to impose on organizations. Penn will do well if he is working under a strong leader, said this person, who spoke on the condition of anonymity to maintain good relations with Penn.

"It becomes more challenging if an operation is without direction," he said.

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