Microsoft’s CEO Short List: 10 Things It Says About the Candidates

by Don Reisinger

Here’s a surprising revelation: Microsoft is reportedly considering hiring Ford Motor CEO Alan Mulally as chief executive. It’s not clear what Mulally could bring to the table, given his background, or if he would even consider leaving the auto industry. But he has been an effective steward at Ford and has helped the company recover from the dark days when the “Great Recession” sent auto sales into a deep slump. Perhaps Microsoft’s board hopes he can use his skills to return Microsoft to robust growth.

Some signs seem to point to Stephen Elop heading up Microsoft next year. Nokia’s Devices and Service business will soon come under Microsoft’s umbrella and Elop will become a top executive at the company handling hardware, which is a key component in Ballmer’s strategic plan. It also helps that Elop previously worked at Microsoft and knows the company’s culture quite well.

Although Mulally is in the auto business, people that either work at Microsoft currently or have in the past dominate the short list. As mentioned, Elop was a Microsoft employee at one point, and Satya Nadella, another person on the list, currently runs the software giant’s cloud and enterprise business. Skype CEO Tony Bates has also made the cut and is one of the top executives at the software company.

Does Microsoft need to go mobile? Does it need to appeal to enterprise customers? Is it in need of a dramatic change? Based on the list, Microsoft is keeping all of its options open. If it wants to go with a mobile-first strategy, Elop seems like a solid choice. Nadella makes sense if the company wants to focus on the enterprise. At this point, it’s hard to tell where Microsoft’s board wants to go.

Another odd inclusion in the list is CSC CEO Mike Lawrie. Since joining CSC as its chief executive in 2012, Lawrie has totally turned the company around. Prior to that, Lawrie did wonders with financial services IT systems company Misys. Lawrie’s reputation is one of being a turnaround specialist. But does Microsoft really need that right now? Given its still hefty profits, it’s not in need of a turnaround specialist yet.

Four of the company’s possible candidates for CEO are in their 40s. Only Alan Mulally is not, and he’s 68 years old. It appears that youth is a key component in Microsoft’s plan—that is, if the company decides to go with one of the other men and not Mulally.

Do the candidates Microsoft has tapped to populate its short list indicate a split might be in order? Bates, Elop and Nadella are experts in their respective fields, but seemingly don’t have the resumes to run a company so vast in scope as Microsoft. CSC’s Lawrie might not even have the requisite experience, despite his impeccable reputation. Mulally, meanwhile, would come from Ford. Microsoft has come under pressure from some investors who say the company would benefit from spinning off some operations. This has prompted speculation that Microsoft’s strategic plan contemplates such a move.

Ballmer’s influence can be felt throughout the short list of CEO candidates. Mulally is a well-known friend of Ballmer, and Elop has bought into the current chief executive’s devices strategy. Even Tony Bates has said publicly that he’s happy with Microsoft’s strategic plan. Whether Nadella believes in his boss is unknown, but his high-level position at least says something about Ballmer’s feelings toward him. Could Ballmer’s replacement turn out to be more of the same?

There were reports in the last several months that Microsoft was possibly looking to attract Google’s Sundar Pichai or Vic Gundotra to take over the company. But if the short list Reuters published is real, there’s no Google influence there.

Let’s face it: Microsoft needs to be more innovative, but none of the people included in the short list come from especially innovative firms. Sure, Ford is doing better and has embraced technology, but it’s still Ford. And while Skype was, at launch, an innovative entity, it’s lost some of its credibility after joining Microsoft. And Lawrie’s CSC is not the sexiest company in the world. Microsoft needs something new and exciting, and it’s tough to see whether that will happen with the current slate of CEO candidates.