Hope.
That was the word that stuck with me after reading Bethany McLean’s excellent exposé on the future of Microsoft, a piece that digs deep into the personalities that have shaped the company in the past — namely Bill Gates and Steve Ballmer — and the man charged with leading it forward — Satya Nadella.
McLean certainly does not sugarcoat things, noting how Microsoft’s culture of confrontation worked well when it was younger but “carried the seeds of future problems.” She also points out how far the company has fallen behind in mobile.
McLean also spends time on some of Ballmer’s well-known missteps (Mobile, Search and Windows Vista) and writes that Microsoft lacks relevance in today’s tech industry despite its enormous cash pile and profits. It even draws comparisons to IBM in 1990, the once dominant tech giant that was knocked off its pedestal by a young whippersnapper by the name of Microsoft.
The story — titled The Empire Reboots — also features new insights from Ballmer, Gates and Nadella. (All were interviewed for the piece). For example, take this passage in which Ballmer talks about his greatest mistake, later admitting that he never felt fully in control of Microsoft until Gates left the company for good in 2008.
“The worst work I did was from 2001 to 2004,” says Ballmer. “And the company paid a price for bad work. I put the A-team resources on Longhorn, not on phones or browsers. All our resources were tied up on the wrong thing.” Who shoulders the blame is a matter of debate, but the fact is neither Ballmer nor Gates stopped the failure from happening, even as almost everyone else saw it coming.
Much of the piece is spent on the complex relationship between Gates and Ballmer, which McLean compares to a marriage, with one person saying it is similar to a couple that gets divorced and then connects again.
But the story also digs into the sudden decision by Ballmer to step down from the CEO post at Microsoft, noting the importance of the Nokia acquisition in the departure.
McLean writes about a June 2013 board meeting — a pivotal meeting — in which the board changed course on the Nokia acquisition after initially agreeing to Ballmer’s plan.
McLean writes:
Ballmer thought he had it and left before the post-board-meeting dinner to attend his son’s middle-school graduation. When he came back the next day, he found that the board had pulled a coup: they informed him they weren’t doing the deal, and it wasn’t up for discussion. For Ballmer, it seems, the unforgivable thing was that Gates had been part of the coup, which Ballmer saw as the ultimate betrayal.
Ballmer erupted in a fit of rage. He told the board in no uncertain terms that if they didn’t approve the Nokia deal he was out. “That was my best idea,” he says today. “If we’re not going to do it, then you need to get someone else who will have the next big idea.”
That seemed to be a seminal moment in the Ballmer-Gates relationship, with the story going on to detail the poorly orchestrated CEO succession plan that Microsoft instituted after Ballmer announced his retirement.
The piece ends on an upbeat note. It details how Nadella’s poetry-reading and friendly style (he’s actually described as looking the “modern tech CEO part,” and compared to the cutting-edge cool Apple figure in the famous Mac. vs. PC ads) could set Microsoft on a new course. McLean writes that it is still too early to say whether Nadella can reverse the company’s treacherous path, and doubters do remain given how far Microsoft has fallen behind. She describes the Microsoft CEO post as perhaps “the toughest job in business” — something that GeekWire co-founder Todd Bishop also has frequently noted. McLean writes:
But as well respected and well liked as Nadella is—and as different as his style is from Ballmer’s or Gates’s—there are still questions about how radically different his Microsoft will be. Within the company, it has almost become a cliché that he was the “safe pick”: that he will stick with the status quo, whether in keeping the consumer businesses or in reshaping Microsoft’s executive ranks, which, as several people point out to me, are filled with employees who thrived under Ballmer. “He’s not Genghis Khan when you might need Genghis Khan,” says another former Microsoft executive about Nadella. There’s a Game of Thrones- like feeling inside Microsoft right now as people wait to see who will stay and who will go. But most of Ballmer’s senior executives still have their jobs.
This is a definite must read for anyone who closely follows Microsoft.
