Microsoft Investors Want a "Turnaround" Expert for New CEO
There's talk that a special Microsoft committee is eying Ford Motor Company CEO Alan Mulally and Computer Sciences Corp CEO Mike Lawrie.
With current Microsoft CEO Steve Ballmer gearing up to take an early "retirement" within the next twelve months, twenty of Microsoft's top investors are now seeking a "turnaround expert" to fill his shoes. Included in this shortlist of potential candidates are Ford Motor Company CEO Alan Mulally and Computer Sciences Corp CEO Mike Lawrie.
A special committee of the board was formed after Ballmer's public announcement last month. Sources told Reuters that it's currently in charge of conducting the search, and its advisers have held regular meetings with company shareholders. In one of these meetings, Microsoft supposedly had a list of around 40 candidates, and has been narrowing it down ever since.
Sources claim that this special committee could name the new CEO as soon as the end of the year. They also say that Microsoft's investors are highly attracted to Mulally and Lawrie because both have had success in turning around companies. The 68-year-old Ford CEO is more widely known thanks to his "dramatic reversal" of the #2 North American car manufacturer.
Last November Ford announced a succession plan for Mulally that revealed the current CEO would stay on at least until the end of 2014. However, sources close to the plan told Reuters that the executive could possibly step down before that if the right opportunity came along. Naturally, a follow-up with Ford denies such a possibility, stating that he will "continue to serve as Ford's president and CEO through at least 2014."
Reuters believes choosing Malally would be a "radical choice" for Microsoft given he resides outside the technology sector. But perhaps this is the radical move Microsoft needs to make as it transitions into a devices and services company. Furthermore, perhaps he can bring a more consumer-side approach, meaning he hasn't been knee-deep in the backside of Microsoft's software or the PC industry itself for decades.
IBM made a similar move back in the 1990s. The company hired Louis Gerstner, a manager from the financial industry who saved the company from going out of business. Between 1993 and 2002, he pushed the company into refocusing on the IT services business, which grew to nearly 50 percent of the company's revenues. He also pushed IBM to embrace the Internet as a business.
Microsoft hasn't fallen to those IBM lows, but the company has some ground to gain in regards to the smartphone and tablet markets. The company is also trying to save face with the upcoming Windows 8.1 update after a lackluster Windows 8 launch provoked OEMs to blame Microsoft and the new interface for the rapid decline in PC sales. The CEO Microsoft's board will eventually elect to steer not only Microsoft but the industry itself over the next decade.
The other high-profile candidate for the CEO throne, Lawrie, is a long-time IT executive who spent nearly three decades at IBM working alongside John Thompson, Microsoft's lead independent director who is currently heading the special committee. He worked for UK-based financial software company Misys Plc. before joining Computer Sciences in 2012, which is currently undergoing its own turnaround plan under Lawrie.
Sources claim that Microsoft chairman and co-founder Bill Gates will likely have a veto on the new CEO choice. He's still the company's largest shareholder, and part of the four-member special committee. To this date Gates has not specified what kind of CEO he's looking for.