Step on it, Already

Microsoft’s Board moves its CEO search towards the end

Bloomberg is reporting that Microsoft’s CEO search is nearing an end.   The company’s board of directors will narrow its previous list of candidates (set at 8) to 3 to 5, according to the news outlet. That meeting, scheduled for  2013-11-18  takes place one day before Microsoft hosts its annual shareholders meeting not far from its headquarters, in Redmond, WA.

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In a bid to keep or improve the momentum its stock saw since Steve Ballmer announced his departure within 12 months,   Microsoft will quickly advance its search forward.   Microsoft’s stock has jumped 17% since that announcement in August 2013. The company’s board would be negligent to allow it to fall off or stagnate.

There’s also been a great deal of criticism that many of the recent changes that Ballmer has enacted over the recent months, including the company’s focus change from boxed software to devices and services, its recent reorg – which was extensive – as well as its acquisition of Nokia’s handset business and the abandonment of its “stack ranking” employee evaluation system, would box the new CEO in and narrow their choices.   The fear is that this would effectively make them a replacement and not a successor.

The intent is to get a replacement in place by the end of the year.   If the selection process moves into 2014, then ValueAct’s president, G. Mason Morfit, a newly appointed board member, will have a more active voice in the choice of CEO as part of the recent agreement ValueAct and Microsoft entered into in August 2013. ValueAct Capital instituted a potential proxy fight and as part of the agreement to avoid that, Microsoft and ValueAct entered into an agreement that included a board seat for Morfit. The “more active voice” clause is also part of the deal, according to a filing with the SEC.

My friend Preston Gralla   had some  interesting ideas  on who that person might be. His take, and I agree with much of it, is that Microsoft needs a complete remake. That would kill nearly every internal candidate (Satya Nadella, Kevin Turner, and my speculation on a third internal candidate – Julie Larson-Green) as well as Stephen Elop.   Elop may be coming directly from Nokia, but he’s a former Softie, and was once part of the culture that needs to so drastically change. If I were a member of the MS Board, while Elop may institute change, I would be afraid that it wouldn’t be a big enough change.

That leaves just two real candidates – former Skype CEO Tony Bates and Ford’s Alan Mulally.   I honestly like both. While Bates may have the tech experience and the entrepreneurial drive that might be needed, I think Mulally is the better choice.   He has the corporate experience with a larger organization in Ford and has brought about the kind of rapid change that the MS Board wants. Mulally can always tap Tony Bates for COO, too; which would give the organization the best of both worlds.   It just may be the winning combination that Microsoft needs at this time.

I don’t want to push Kevin Turner out of a job, but in the end, it may be the right choice for Microsoft. If there isn’t another good spot for Turner within the organization, I’m certain he and his family won’t starve to death. Microsoft would likely take care of him if that scenario came about.

I’ll have more on the CEO developments at Microsoft as they become known. Please watch Soft32 for more on this developing issue.

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