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Ballmer Realized He Was a Problem at Microsoft

By - Source: The Wall Street Journal | B 32 comments

Microsoft CEO Steve Ballmer realized the company would change faster without him.

The Wall Street Journal has a very long, if not moving, article about Microsoft's Steve Ballmer and his decision to step down as CEO. In the interview, he admits that perhaps he's an emblem of an old era, and that he needs to move on. The best way for Microsoft to enter a new era is to seek out a new leader that will accelerate change.

"At the end of the day, we need to break a pattern," he says. "Face it: I'm a pattern."

Microsoft's board didn't push Ballmer to step down. Both agreed that Microsoft, while maintaining its software business, must reorganize its management structure and refocus on mobile devices and online services. The company must also reduce its dependence on the fading PC market and allow those new services to take the center stage, enabling future profit growth. Thus the board was pushing Ballmer to go faster with change, not asking him to step down.

"At this critical juncture, Wall Street wants new blood to bring fundamental change," says longtime Microsoft analyst at UBS AG, Brent Thill. "Steve was a phenomenal leader who racked up profits and market share in the commercial business, but the new CEO must innovate in areas Steve missed—phone, tablet, Internet services, even wearables."

The beginning of the end seemingly began with a conversation with long-time friend Ford CEO Alan Mulally at a Starbucks near Seattle. Ballmer dumped a bunch of devices on the table and asked how Mulally turned around Ford, who spent the next four hours detailing how teamwork and simplifying the Ford brand helped to reposition the company. Taking that information, Ballmer decided to develop a new reorganization plan and approached the board. They liked the idea, and demanded he expedite it.

But Ballmer didn't want to "shift gears" until he shipped Windows (8.1). So he began drafting a management reorganization plan in March 2013. He also began changing the way he interacted with others within the company, consulting with unit chiefs together in a circle in his office to bring everyone closer together; previously, he consulted with them individually. Baller said that the senior team struggled with the New Steve, some resisting large matters like combining engineering teams. He asked for smaller reports to encourage simplicity, and saw some resistance there too.

In May, after seeing that he had essentially trained everyone to "see the trees and not the forest," he began to wonder if he was capable of meeting the pace that the board demanded. He finally decided that Microsoft would change faster without him after winding down from a run one morning. Thus he secretly began drafting retirement letters, and a few weeks later began planting the idea that it was now time for him to go.

The board wasn't shocked or surprised by the news. In fact, they believed that "fresh eyes and ears might accelerate what we're trying to do here." Chairman Bill Gates reportedly said that he supported Ballmer's early retirement only if it ensured that Microsoft remains successful.

On August 21, the board held a conference call to accept Ballmer's retirement: the procedure took less than an hour. Then during his final annual employee meeting in September, Ballmer gave high-fives and then ran off the stage while one of the songs from Dirty Dancing was playing in the background:

(I've Had) The Time of My Life.

Steve Ballmer Farewell

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  • -1 Hide
    robax91 , November 24, 2013 3:19 AM
    CEO steps down, cashes out. Cha-ching.
  • 0 Hide
    spentshells , November 24, 2013 3:44 AM
    Late to the game for mobile, it won't be long before that market starts a decline, just like the tech bubble before it.
  • 0 Hide
    wemakeourfuture , November 24, 2013 5:00 AM
    Quote:
    spentshells , November 24, 2013 3:44 AM
    Late to the game for mobile, it won't be long before that market starts a decline, just like the tech bubble before it.


    There is NOTHING similar to the current market with the tech bubble market. Nothing at all. From earnings, guidance, evaluations, any metric you can find. Completely and utterly different states between the 2 markets.
  • Display all 32 comments.
  • -1 Hide
    SteelCity1981 , November 24, 2013 5:07 AM
    Gee he thinks.... but you know what they say the first step to realizing you have a problem or in Ballmers case were the problem is to admit it.
  • 3 Hide
    spentshells , November 24, 2013 5:14 AM
    Quote:
    Quote:
    spentshells , November 24, 2013 3:44 AM
    Late to the game for mobile, it won't be long before that market starts a decline, just like the tech bubble before it.


    There is NOTHING similar to the current market with the tech bubble market. Nothing at all. From earnings, guidance, evaluations, any metric you can find. Completely and utterly different states between the 2 markets.


    Overvalued companies, an obvious limit to expansion, lack of actual growth only perceived growth..
  • 1 Hide
    Shin-san , November 24, 2013 6:22 AM
    I could see a company like Microsoft getting a bunch of dead weight over time, and that weight can actually make it very difficult to get things done. Do you think that the Internet Explorer team enjoys making a mediocre web browser? The engineers on it probably want to kick Google Chrome's ass.

    They have gotten better scores than Chrome for a short time, but they probably can't keep that momentum going for long
  • 2 Hide
    iamadev , November 24, 2013 7:27 AM
    @Shin-san

    They actually regularly out perform other browsers for periods of time. IE is certainly not a terrible browser any more. The problem they have is the almost yearly cadence they have which means it only improves roughly once every year whereas the other browsers have smaller incremental improvements throughout the year.

    The IE team are making a very decent browser, the bad image it has is just that; an image.
  • 0 Hide
    JD88 , November 24, 2013 7:53 AM
    Internet Explorer needs a new name.
  • 0 Hide
    coolitic , November 24, 2013 9:29 AM
    So it was Ballmer and Gates that made Microsoft good? So it was he that opposed all the changes that made every human being hate microsoft?

    If ballmer supported the old ways, then I support him.
  • 0 Hide
    Gurg , November 24, 2013 10:03 AM
    W8 was a complete blunder and he should have been fired far sooner.
  • 2 Hide
    brandonjclark , November 24, 2013 10:55 AM
    Not sure if that last "crying" video was a shot but I found it inspiring. Most people would love to be led by someone with such passion.
  • 3 Hide
    eklipz330 , November 24, 2013 11:02 AM
    IE nor WIN 8 are bad. IE has improved a lot since the XP days, and it my browser to go to just in case chrome acts funky. i dont appreciate the built in bing engine though, never seems to work as well

    the problem with windows 8 is not necessarily the OS. it's VERY stable. the problem is that people do not like change. and windows 8 was a very dramatic one. they should have eased in the metro UI, possibly made it an option over shoving it down people's throats. the appstore is also pretty laughable. windows was close to perfection as it was. they should/need to incorporate new technologies into their future OS's, maybe something like the kinect or leap motion. that's the only way to continue moving forward IMO. nowadays computers are so jam packed with resources that we are peaking when it comes to productivity. now we just need new input methods to make it even better.
  • 1 Hide
    Innocent_Bystander , November 24, 2013 12:08 PM
    "There is NOTHING similar to the current market with the tech bubble market. Nothing at all. From earnings, guidance, evaluations, any metric you can find."

    I have one thing to say to that... Twitter goes IPO and explodes to 1.7x on opening day, never having made a single dirty cent in its miserable existence. Tell me it's not a bubble.

    the only thing different between today and '99 is today it's not click-throughs that replace earnings, it's registered users...

    it'll blow all the same though.

    IB
  • 0 Hide
    The_Trutherizer , November 24, 2013 1:35 PM
    Holy cow. This level of corporate indoctrination would make me puke if I was ever exposed to it.

    "Balmer up at 4:30. Be there! He's gonna cry. They will play the theme from dirty dancing. TV will be there. Be... There... Or else"
  • 0 Hide
    JOSHSKORN , November 24, 2013 1:37 PM
    Maybe if Windows Vista was actually Windows 7, and Windows 7 was actually Windows 8.1. Microsoft got too far behind in the mobile market. IMO, the Windows SmartPhone should've already been replacing the Desktop, but we still don't have that, yet. Part of that is Microsoft being sluggish to get Windows 8/8.1 out there and part of it is that the hardware in Smartphones still doesn't quite cut the mustard for something like that, yet. If the OS was out there sooner, we might have better hardware, nowadays for something like that.
  • 2 Hide
    brightsmith , November 24, 2013 1:48 PM
    IMO, the next Microsoft CEO should be separate operating system for example: Windows 7.1 for desktop/workstation (start menu+aero+desktop style+high DPI support+native USB 3.0 driver+etc), Windows 8.x for tablet/phone (metro+touch optimized). Then stop forcing users to use Microsoft services by default. Give space for the user the freedom to choose, and make sure that Microsoft protects user privacy by not cooperating with the NSA.
  • 1 Hide
    brightsmith , November 24, 2013 1:48 PM
    IMO, the next Microsoft CEO should be separate operating system for example: Windows 7.1 for desktop/workstation (start menu+aero+desktop style+high DPI support+native USB 3.0 driver+etc), Windows 8.x for tablet/phone (metro+touch optimized). Then stop forcing users to use Microsoft services by default. Give space for the user the freedom to choose, and make sure that Microsoft protects user privacy by not cooperating with the NSA.
  • 2 Hide
    Stevemeister , November 24, 2013 4:15 PM
    So now we see a classic corporate blunder . . . ignoring or de-emphasizing your core business to chase other areas where they will be trying to displace numerous incumbents in a market that itself is getting close to saturation.
  • 0 Hide
    vaughn2k , November 24, 2013 5:04 PM
    HAHA! What took you so long?? :D  :D  :D 
  • 1 Hide
    boytitan2 , November 24, 2013 6:35 PM
    Your making it hard for me to hate you Ballmer.
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