I tweeted the thought in the title months ago but never followed up with a blog entry. If you want to know why Bill was so emotional at the recent shareholders meeting it was probably because this was likely his last as Microsoft Chairman, not just Steve Ballmer’s last as CEO. The founders era at Microsoft is coming to an end. Let me lay out my reasoning for you as well as some of the implications.
First, this is not about pressure from a couple of investors as was reported a while ago. I believe Bill has come close to giving up the Chairmanship on more than one occasion over the years and now the timing is right.
The timing is right for a new CEO because he can’t have the founder hanging over his head. Bill’s personal connection with employees, even those who joined long after he ceased being CEO, is strong. And his influence amongst investors holding a large percentage of Microsoft stock is also strong. A new CEO can’t have Bill undermining him as he seeks to change the company. Sure Steve had that same problem, and he struggled to establish the right balance between his own direct authority and Bill’s moral authority. A new CEO, particularly an outsider, could not succeed under similar conditions. In fact an outsider will almost certainly insist that Bill phase out of any role at Microsoft before he takes the job. An insider might have a different take if he had a long time connection to Bill. Only Satya Nadella probably fits that situation, and even Satya would be better off without Bill as Chairman.
It’s also right for Bill. His interests have moved on, and while Microsoft is still his child it is now a grown child. There are times that his heart must have been breaking over things Steve did that he disagreed with. The pain level associated with a new CEO and the changes they will institute is going to be even higher. And although Bill is still Microsoft’s biggest shareholder, it no longer represents the majority of his assets. He no longer needs to keep his finger in the mix.
Bill’s leaving the Chairmanship will probably be orchestrated in some seamless way. Perhaps he will become Chairman Emeritus for a while, followed by his leaving the board but remaining a “Strategic Advisor” before fading into Microsoft history. Bill would probably nominate someone, perhaps Jeff Raikes, to the board to represent his interests. Assuming he doesn’t accelerate divestiture of his Microsoft stock.
Now the obvious question is, who becomes Microsoft Chairman? There actually is an obvious candidate, and this is a scenario I’ve mentioned to a number of people: Alan Mulally! I have never seen Mulally as a good choice for CEO, but he’d be an excellent choice for Chairman. It’s the right thing for the next stage of his career. It gives the investment community someone who they want to oversee their interests. It fits all the scenarios that have previously called for Mulally as an interim CEO before turning that over to Satya Nadella. Basically you end up with Mulally focusing on shareholder value and Satya (or Tony Bates or…) focusing on the business both short and long-term.
And you want to know the kicker? It totally fits with all the non-denial denials we’ve been hearing out of Ford. Alan Mulally can join Microsoft’s boards, and even be its Chairman, while finishing out his term as Ford’s CEO. Game, Set, Match.
Ok, I may be way out there on the Mulally thing. But I’d put money on Bill leaving the Chairman position within 12 months of a new CEO being named.