I’ve been trying to decide how to approach this topic, because in truth I want to write about the future of Microsoft and not focus so much on Steve. But I might as well put the past to bed first and then write a blog entry on the future.
I hope when historians look back on Steve Ballmer’s tenure at Microsoft they focus on all his positive contributions to the company rather than just his mistakes. Steve was a key contributor to the success of the company, certainly prior to being CEO and one can make the case that he did a lot of good during his CEO tenure as well. Ultimately he didn’t return Microsoft to its pre-DoJ glory, and that will always dominate the discussion.
For employees and ex-employees, our biggest beef with Steve will probably turn out to be that he made a great, if sometimes brutal, place to work a lot less great. And that, particularly in the second half of his CEO tenure, it became a lot more brutal yet cruelly random in how it measured and rewarded employee contributions. It wasn’t always this way. In his first few years as CEO Steve went overboard in trying to keep employees happy. At some point he sensed they’d become complacent, many of us noticed how the parking lots were surprisingly empty at times employees would previously have been working, and sought ways to re-motivate people. His efforts here seemed to be like grasping at straws, eventually degrading into fear as the primary way of motivating people. I don’t think Steve really intended this, but that’s how it worked out. I’m not sure who this bothered more, those who lived through Microsoft’s glory days or new hires who only experienced Microsoft at its fearful worst.
By the time I left in 2010 I couldn’t find any employee, executive staff included, who wasn’t down on Steve. One thing that is surprising about his retirement announcement is that employees (particularly senior leadership) seemed to be getting more positive. The recent reorganization, and the new leadership made up of a new generation and how they were working together, was a positive. There are also some indications that the era of fear as motivator was coming to an end. Now we’ll never know if Steve would have regained favor with the employee base.
Steve made plenty of mistakes on the product front, many of them clearly of his own design but not necessarily the worst of them. Longhorn. Steve didn’t craft the Longhorn plan, Bill did. Steve has to take responsibility for it since he was CEO, and he obviously bears responsibility for not making sure the company executed. Longhorn was a bold plan and Steve took a huge risk in agreeing to it. Had it succeeded he probably would have gotten the kind of credit regularly attributed to that other company head named Steve. Instead it doomed his tenure as CEO. The management distraction in recovering from that debacle, along with the efforts to make up for lost time, led Microsoft to miss the critical transitions of the last decade such as the emergence of consumer smartphones and tablets.
The other big overhang in Steve’s tenure as CEO were the U.S. and European antitrust actions. Steve’s move from running sales and service to President and then CEO was largely the result of these actions. Steve was one of the few senior executives who was not a central figure in the legal proceedings and thus had the cycles and energy to run the company. And after the DoJ settlement, he had to spend a good chunk of his tenure finding a way to settle with the E.U. And then run the company under the terrible burden of complying with both settlements. Between the actual restrictions from these settlements and the general caution about antitrust that then pervaded the Microsoft culture, Steve was essentially running Microsoft with one hand tied behind his back.
The truth is, I don’t think Steve gets enough credit for saving the company. Without him Microsoft probably would now be a footnote in tech history. Like Digital Equipment Corporation in the 90s, an industry titan that became irrelevant and then quickly faded away. It would have been easy for Microsoft to turn itself into a cash cow. Or break up the company. Or become a niche player. Or be absorbed into another tech industry giant. Can you imagine the irony of IBM having purchased Microsoft?
Steve took over Microsoft at its low point and kept it going and growing. He made a lot of mistakes and then fought the company back from both his own and the mistakes of others. And from the horrors of living under government imposed restrictions that none of Microsoft’s competitors faced. When you look at it this way Steve is a hero. Period.
Steve’s biggest crime is that he’s never gotten Microsoft out of purgatory. He kept it from sliding in to the depths of hell, but failed to return it to the heaven of industry leadership. He’s never gotten vision, strategy, tactics, execution, employee engagement, collaboration, communication, etc. to all line up at the same time. This dwarfs any individual mistakes he’s made, big or small, in terms of how to look at his tenure. No matter how brilliant the vision or strategy, if you can’t communicate and execute against it then you’ll fail. And no matter how good the execution, if it isn’t taking you to the right place then you’ll fail as well. Microsoft under Steve was guilty of a lot of both of these.
I was somewhat surprised by the announcement of Steve’s retirement, largely because I hadn’t heard any recent rumblings about his future. Two or three years ago I heard something from a very well-connected source that lead me to expect something like this, but as time went by I assumed it was a false positive. Was Steve forced out? Probably not. Was he encouraged to consider leaving earlier than his original timeline? Perhaps so.
Let me offer a somewhat different perspective on this. Steve just rebuilt Microsoft’s senior executive team with the next generation. All functions are now led by individuals that were either middle management or outside the company when he became CEO. The dinosaurs have all died out, with one exception. Perhaps Steve looked at this and realized he was the only one left and it was time for him to join the other First Ones beyond the rim. The future belongs to the next generation, now let’s see what they do with it.