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For the outgoing Microsoft president, heading the $37.3 billion philanthropic organization will be "a dream job"
It didn't take long for Microsoft President Jeff Raikes to figure out his second career. Just four months after announcing plans to retire (BusinessWeek.com, 1/10/08) as president of Microsoft's business software operations, Raikes said on May 12 that he would become chief executive of the Bill & Melinda Gates Foundation, starting Sept. 2. "This is truly a dream job," Raikes says. When the Gateses dropped by his office in early May to offer him the post, "It took me a nanosecond to accept," he says.
The foundation has been looking for a CEO since the current job holder, Patty Stonesifer, a former Microsoftie herself, announced plans in February to step down as chief executive. Stonesifer will continue to work for the foundation in an as-yet-undetermined role. In the intervening months, the foundation hired executive search firm Russell Reynolds Associates and considered more than 150 candidates. But Melinda Gates makes it clear that she and her husband settled on Raikes in large part because of their familiarity with him. "We have a shared passion, and we share the same values," she says.
Raikes's ties to the Gateses run deep. He joined Microsoft in 1981 and, in many ways, grew up with Bill Gates in the succeeding decades. He attended Gates's wedding, just as Gates was a guest at his. The two occasionally golf together. And Raikes owns a vacation home next door to the Gates compound on Hood Canal in western Washington State.
It didn't hurt that Raikes is also friends with a fellow Nebraskan, billionaire Warren Buffett, who pledged $31 billion to the foundation (BusinessWeek,com, 6/27/06) in June, 2006. While Buffett left the hiring to the Gateses, he chatted with Raikes about the differences between developing a successful business and a successful philanthropy. It often takes philanthropic organizations much longer to measure the impact of their grants, creating a much longer "feedback loop." That makes it more challenging to give effectively. "To me, that's just a fascinating intellectual puzzle," Raikes says.
Raikes, a Stanford grad, joined Microsoft from Apple Computer (AAPL). He led the group that stitched together word processing and spreadsheet programs to create the Office suite of applications, which now make up the lion's share of sales in Microsoft's $16.4 billion Business Division. In the 1990s, Raikes led Microsoft's sales operations, and revenue tripled while he was in charge. In 2002, he returned to run Office and helped restore growth to the stalled franchise. "He has earned a reputation as a trusted and experienced leader," Melinda Gates says.
Raikes will need those business skills as the foundation itself wrestles with the complexities of growth. The foundation, which began in 1997 in a small office above a pizza parlor near Microsoft, is now the world's richest, with a $37.3 billion endowment. It has 500 employees, and the number is expected to grow north of 800 in the next few years. The foundation doled out more than $2 billion last year to programs focused on preventing and treating disease in developing nations, offering financial services to small farmers in developing nations, and reducing the dropout rate in U.S. high schools (BusinessWeek, 6/26/06).
Raikes will join the foundation at the same time Bill Gates moves away from Microsoft to focus on his philanthropy full-time (BusinessWeek.com, 6/16/06).
But Melinda Gates says her husband's new role at the foundation won't diminish the responsibilities of the CEO job. "He in no way wants to be involved in the day-to-day operations," she says. Instead, she expects her husband will travel to learn more about the foundation's work. And Raikes will begin his second career.