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    Microsoft’s Next CEO Needs to Blend Ballmer’s Energy With Innovation

    By
    Eric Lundquist
    -
    August 23, 2013
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      After a marathon PowerPoint product introduction day at Microsoft, a group of tech journalists, myself included, was invited to join Steve Ballmer at a Mariners baseball game over at Safeco Field.

      I don’t remember the exact date, but it must have been after 1999 as that is when the team moved to Safeco. What I do remember is Ballmer’s encyclopedic knowledge of the game, the strategies and tactics taking place on the field and his enthusiasm (always part of his character) for everything he surveyed, including the ballpark.

      At that time, I remember thinking, “Why not just take your billions and go buy a team where fans will appreciate your over-the-top antics much more than CIOs or developers?” In any case, although he made a thwarted run at another team in another sport (NBA’s Sacramento Kings), he stuck with Microsoft through a tough era when there were more strikeouts than home runs.

      And now in a prime example of hedged corporate-speak, “Microsoft Corp. today announced that Chief Executive Officer Steve Ballmer has decided to retire as CEO within the next 12 months, upon the completion of a process to choose his successor.”

      He’ll be exiting a company with $68 billion in cash, revenues and profits that would be the envy of any company. But Microsoft is still struggling to update its product line to catch up with the social, mobile and cloud technologies sweeping the industry Ballmer helped create.

      There will be lots of analysts and consultants cheering the departure and also questioning whether or not Microsoft’s decision to find a new boss came too late. Corporate CEO departures are rarely well-timed and too many come after crises, but I’d argue Ballmer’s challenges were larger than even his outsized personality. Microsoft was and is by far (to the point of being accused of being a monopoly) the leader in desktop, laptop and enterprise computing.

      The company faced the classic tech dilemma of trying to maintain compatibility with past products while creating new products and services to match its competitors. For many large companies, it becomes a question of revenues versus innovation and often the revenue piece of the equation rules. Quarterly results are based on financial figures, not innovation statistics.

      The key question for Microsoft’s recently formed CEO search committee isn’t who should replace Ballmer, but what kind of company does Microsoft want to become. The company could have a very nice, highly profitable ride to becoming a smaller company, managing the decline of the PC business and exiting from businesses where it will never win.

      You won’t find many talented executives excited about managing the contraction of an aging company. If the goal is to outpace the cloud providers, mobile developers and tech service economy, the board and the company better get ready to open the bank vault, rethink the corporate structure and look outside the confines of Redmond for a CEO without fear of failure, coupled with the vision and determination to override a complacent corporate culture.

      Sports metaphors tend to get overworked in the business world, but in Microsoft’s case, they are apt. A team is only as good as the players it can put on the field on any given day. Past history makes for great stories, statues and memorabilia, but each season is a new game with new players, new rules and where tactics are required.

      Steve Ballmer along with Bill Gates is one of the original founders of the microcomputer technology industry. But the game has changed a lot since the start of Windows. The next CEO will have to show the same forward-thinking and relentless energy that Steve and Bill brought to the original personal computer space. Finding that CEO will be a tall order indeed for Microsoft’s board.

      Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008, authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm, which may at any time invest in companies whose products are discussed in this article, and no disclosure of securities transactions will be made.

      Eric Lundquist
      Since 1996, Eric Lundquist has been Editor in Chief of eWEEK, which includes domestic, international and online editions. As eWEEK's EIC, Lundquist oversees a staff of nearly 40 editors, reporters and Labs analysts covering product, services and companies in the high-technology community. He is a frequent speaker at industry gatherings and user events and sits on numerous advisory boards. Eric writes the popular weekly column, 'Up Front,' and he is a confidant of eWEEK's Spencer F. Katt gossip columnist.

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