Microsoft era ending at Gates Foundation – CEO Jeff Raikes steps down | 

Jeff RaikesToday is the last day for former Microsoft executive Jeff Raikes to serve as CEO of the Bill & Melinda Gates Foundation.

Raikes took over the job from Patty Stonesifer, the first CEO for the Gates Foundation and also a former Micosoft exec. Many are wondering if we are entering a new era for the world’s largest philanthropy given that this is the first time a non-Microsoftie – biotech executive and academic Susan Desmond-Hellman – will be at the helm.

Who knows? If past behavior is any indication, we won’t be hearing much publicly from Desmond-Hellman for a while. The Gates Foundation likes to keep new leadership hires under wraps for a few months, until they have completed their immersion therapy aimed at getting them up to speed with the entire program (and key talking points).

But it’s worth looking closer at the changes made during the Raikes regime since the past is prelude.

I ran into Raikes on the street recently, while he was talking to the former chief executive at Microsoft Steve Ballmer outside the Dahlia Lounge in Belltown. I caught up with him after they chatted and asked if they were commiserating about getting ousted from their high-profile CEO jobs.

Raikes laughed, emphasizing he’s voluntarily stepping down but would be happy to talk with me about his tenure despite my poor grasp of reality. We met later at his office and I asked him a few questions aimed at helping the public gain more of an appreciation of the dramatic internal changes that have taken place at the Gates Foundation in the past five years, what drove these changes and why.

Q Does it mean anything that, for the first time, the Gates Foundation is bringing in a non-Microsoftie to run things?

JR: I think it’s probably a good thing, though I’m not sure that the CEO not coming from Microsoft by itself it signifies anything. Bill and Melinda knew Patty well. They know me well and we both came to philanthropy from the perspective of running a business. So does Susan, to a great extent. The fact that it’s not Microsoft is not a big deal.

Q But every company has its own style of management. What did you learn at Microsoft that you applied at the Gates Foundation? And didn’t translate?

I’ve tried to draw lessons from my business career and apply them to philanthropy. I did annual business reviews at Microsoft and we do annual strategy reviews at the Gates Foundation. But Microsoft is about delivering the magic of software and making a profit at it. Philanthropy is about putting money back into society for social good impacts. That’s a big difference, and philanthropy is a lot harder to do well. Unlike for Microsoft, the foundation doesn’t have a market system that gives you ongoing feedback about success or failure. So you have to define success internally and build different metrics.

Q The Gates Foundation has grown significantly during your tenure, to about 1,300 employees. That was a lot to manage but you’ve also significantly reorganized the place in terms of its internal structure. Can you help us understand what this reorganization represents?

Gates Foundation CEO Jeff Raikes and Bill Gates in Nigeria with health worker on polio campaign
Gates Foundation CEO Jeff Raikes and Bill Gates in Nigeria with health worker on polio campaign
Gates Foundation

JR: One of our big issues when I came in was how siloed (compartmentalized, or isolated) our programs were. For our global work, we created a number of cross-cutting functions. One of the most important was what we call integrated delivery. Though only two years old, it oversees something like 200 grants and contracts across our many programs…. Let me explain why this is so important. Last fall, I was in Uttar Pradesh, India, and met with women in a program we had funded aimed at improving maternal and neonatal health. I talked with these women who told me how they had benefited from the health improvements, the knowledge. But they also talked about how they worked together with a microfinance project to improve financial security and efforts in agriculture. The point is these women are not just recipients of a program targeting maternal and child health. They are mothers with families working on multiple fronts to improve their lives. Our approach as a philanthropy needs to focus on the whole person.

Q What are some of the biggest remaining challenges (the tasks you’ve foisted off on Desmond-Hellman)? One big complaint you’ve dealt with over the years is that the Gates Foundation is somewhat inscrutable, even to its grantees. How are you doing on the transparency and communications front?

JR: I think we’re in pretty good shape overall. As far as remaining challenges, I’d say we’ve made a lot of progress with polio but (eradication) is far from being completed… On communication, I think we’ve also made a lot of progress. Two of my team’s biggest goals were to improve the quality of our communications and reduce complexity for grantees. We’ve done an in-depth survey of some of our grantees and they say we’re doing better.

Q There still appears to be a lot of turnover at the Gates Foundation and some say, despite some of the internal changes, it can still be a difficult place to work. Some tell me (off the record of course) that staff are afraid of criticism and that the place has become very bureaucratic and CYA (cover your ass). What say to that?

JR: A year ago, we set as one of the internal goals to have a more constructive and self-critical dialogue. Failure Fest (a Gates event in which staff were encouraged to talk about failure) was one example of how we took this on…. Part of this comes from rapid growth. When we were a small organization, we weren’t as bureaucratic. But some of this is just the result of growing so big so fast. I think we still take some pretty big risks and move quickly.

Q Now that you’re stepping down as CEO for the Gates Foundation, what will you do?

JR: It’s been a great learning experience. I plan to stay active in philanthropy, through our (Jeff and his wife Tricia’s) Raikes Foundation, and spend at last half my time on that. Our work is primarily focused on education and youth homelessness. And I intend to work more broadly with others in philanthropy to share what I’ve learned with others. I think my experience coming from both business and philanthropy can help others seeking to improve their impact. I intend to spend more time on our family farm, between Lincoln and Omaha, Nebraska, and get more involved in agriculture.

  • philippeboucher

    Here is an interview of Melinda with Susan in Fortune magazine. Unfortunately you have to subscribe to read it all :(
    Seems like the type of info that should be available in full on the Foundation’s site but right now they don’t even have a picture!
    http://money.cnn.com/2014/05/01/leadership/gates-desmond-hellman.pr.fortune/

  • philippeboucher

    I cannot wait for your own interview with Susan :) You can follow her on Facebook and Twitter though :)