Software // Operating Systems
News
11/20/2013
02:46 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Microsoft's Next CEO: Ford's Mulally As 'Caretaker'?

Microsoft directors want Alan Mulally to shepherd the company through its restructuring while an insider is groomed for the CEO role, reports say.

Speaking Tuesday at the company's annual shareholder meeting, Microsoft chairman and co-founder Bill Gates said he has met with "a lot" of CEO candidates, but that the selection committee will not be rushed into a decision. A new report published the same day reiterated rumors that Ford CEO Alan Mulally is the front runner for the job, but it added a twist: Microsoft directors want Mulally to shepherd the company for only two or three years, after which a Microsoft insider would take over.

If a two-step succession plan is in the cards, Gates maintained his poker face Tuesday. He confined his remarks to predictable topics such as the complexity the next CEO will face and the progress the selection committee has already made. He also choked up, in a moment more characteristic of retiring CEO Steve Ballmer, as he said Microsoft is unique because it has had only two CEOs in its 38-year history.

But according to AllThingsD, if the next CEO is Mulally, his tenure could be much shorter than that of his predecessors. Citing unnamed sources, the website said Microsoft wants Mulally to serve as a "caretaker" CEO while an internal successor is groomed.

If Microsoft followed this plan, candidates to eventually succeed Mulally could include COO Kevin Turner, executive vice president Tony Bates, and Nokia CEO Stephen Elop, who is joining Microsoft as part of its acquisition of Nokia's device business. But the report claimed Satya Nadella, who leads Microsoft's enterprise and cloud businesses, is the leading internal candidate.

[How will Nokia's device business benefit Microsoft? Read Microsoft-Nokia Deal On: What's Next?]

Forrester analyst David Johnson told us Nadella could be a galvanizing leader. Johnson praised Nadella not only for leading Microsoft's cloud and enterprise products to rapid growth, but also for his an energetic and charismatic presence. "That's the kind of leadership Microsoft needs -- people who can energize."

Ballmer recently revealed that he decided to retire upon realizing that, because he had instituted Microsoft's current management culture, it would take someone else to oversee its restructuring. On Tuesday, in his final shareholder meeting as CEO, he said the company is positioned to make strides in the mobile and consumer markets. It has the assets to place "bold bets," and the Xbox One, which will be released Friday, is an example of its "devices and services" strategy, with numerous divisions' efforts unified under a cohesive, common goal.

But the identity of Microsoft's next CEO hangs over its prospects just as much as the Xbox One. According to a recent Bloomberg report, if Elop got the job, he'd consider selling off not only Microsoft's Xbox business, but also Bing.

Steve Ballmer
Steve Ballmer

Microsoft CFO Amy Hood said Tuesday that the company hopes to announce a decision in the next few months, though some reports claim Microsoft board members want to name a new CEO as soon as next month. When Ballmer announced his retirement in August, he said he'd step down within a year.

If Mulally were to come on in a caretaker role, it would support the view repeatedly affirmed by CEO selection committee head John Thompson that the next CEO will pursue Ballmer's devices-and-services vision. The prospect is also interesting in that it's the second multistage succession rumor to pop up this month. The Chinese Windows Phone enthusiast site WPDang recently claimed (without citing sources) that Turner would preside as CEO for the next few years and would be replaced by Elop.

But if Mulally joined Microsoft for a short-term run, one would have to wonder what would be in it for him. The role of Microsoft CEO is among the most prestigious and impactful in all of business, but Mulally has already been hailed as a savior at Ford, which isn't a bad gig, either. If offered the job, "he'll have two choices," Johnson said. "He can lead Ford, a successful company, or he can do something he's really good at: redirect a company's culture and remake its competitiveness in the market."

Having stabilized Ford, Mulally might be eager for a new challenge, if not for a long-term job. Ballmer told The Wall Street Journal (subscription required) that Mulally helped him structure Microsoft's reorganization plan, which only bolsters this possibility.

Overall, though, Microsoft's CEO prospects ostensibly remain in flux. AllThingsD said that, even though Mulally, Elop, Nadella, and others continue to generate buzz among Microsoft directors, it's possible that a dark-horse candidate could charge into the conversation. Some Microsoft insiders are holding out for candidates who reportedly include a wide range of telecom leaders, as well as former Microsoft execs who have moved to new ventures.

Among nearly 900 qualified respondents to our 2013 Mobile Commerce Survey, 71% say m-commerce is very or extremely important to the future of their organization. However, just 26% have comprehensive strategies in place now. That spells opportunity. Find out more in the 2013 Mobile Commerce Survey report (free registration required).

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Thomas Claburn
50%
50%
Thomas Claburn,
User Rank: Author
11/21/2013 | 2:19:55 PM
Re: Technology first
I just don't have confidence that a skilled manager can innovate enough to keep Microsoft in the game without deep technical knowledge. Skilled management will make Microsoft's existing business more efficient, but it won't necessarily allow the company to make the leaps it needs to reinvent itself and capture new markets.
aditshar
50%
50%
aditshar,
User Rank: Apprentice
11/21/2013 | 7:22:52 AM
Re: Technology first
Mulally seems best fit, MS needs someone with fresh and new blood who can boost the engine again paralley if i look at Elop, What i can stand accounted for, beyond killing the Symbian operating system and lots of job cuts?
ChrisMurphy
50%
50%
ChrisMurphy,
User Rank: Author
11/20/2013 | 8:33:40 PM
Re: Technology first
Mulally faced the same questions going into Ford -- 'FORD really needs an AUTOMOTIVE visionary at its helm.' But what Ford really needed was someone who could nurture one of the industry's all-time great cash cows (the F-150 pickup), kill off its me-too products (minivans), and launch some successful new products while creating more of a one-Ford team culture. Sound like Microsoft's challenges?
melgross
50%
50%
melgross,
User Rank: Ninja
11/20/2013 | 7:39:47 PM
Re: Technology first
I can't agree with that. I remember that Gerstner was criticized for that very reason when he took over IBM. The truth is that being a technology leader can cause blindness in business, where the technology isn't always the reason why a technology company is having problems. With Microsoft, it's management. Let's face it. One major reason Microsoft got where it did was because of the nefarious leadership of Gates, and his skirting the law. After that was neutralized, Microsoft hasn't done as well. Perhaps we need someone who can lead this company without needing to bully other companies and cause another federal lawsuits. I see one coming up regarding the integration of Bing and IE in the Modern UI.
cbabcock
50%
50%
cbabcock,
User Rank: Strategist
11/20/2013 | 6:45:43 PM
Whither Microsoft? Consumer or data center company?
If Microsoft insists on trying to be the top consumer devices company (good luck on that), then Satya Nadella doesn't have much of a shot at the CEO's slot. But if Microsoft directors realize what a great position they have in the data center and potentially in cloud computing, Nadella in 2-3 years is a highly promising pick.
Shane M. O'Neill
50%
50%
Shane M. O'Neill,
User Rank: Author
11/20/2013 | 6:17:14 PM
Microsoft does not need a shepherd
I agree with Tom. Microsoft does not need Allan Mulally to hold its hand for a couple years. It's not as if the company is broken. It made $77.85 billion in revenue in fiscal 2013! It just needs a nimble visionary. Not in two years. Now!
Thomas Claburn
50%
50%
Thomas Claburn,
User Rank: Author
11/20/2013 | 3:48:56 PM
Technology first
I'm sure Mulally is a fine executive but Microsoft really needs a technology visionary at its helm. Yahoo lost its way under Terry Semel, a Hollywood exec rather than tech leader. Microsoft can't afford to make a similar mistake. It needs someone like Ray Ozzie.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Must Reads Oct. 21, 2014
InformationWeek's new Must Reads is a compendium of our best recent coverage of digital strategy. Learn why you should learn to embrace DevOps, how to avoid roadblocks for digital projects, what the five steps to API management are, and more.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A roundup of the top stories and trends on InformationWeek.com
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.