Steve Ballmer knew Microsoft needed more speed and simplicity
The Wall Street Journal scored an "exit interview" with Steve Ballmer, in which the retiring Microsoft CEO lays out his reasons for stepping down several years earlier than he originally planned.
According to the story, it was Ballmer himself who decided that Microsoft needed a radical transformation last fall, and he and the board of directors have been driving through major changes like the May reorganization into "One Microsoft," the decision to buy Nokia, and the end of Microsoft's "stack ranking" employee evaluation system, in which every group had to choose a set percentage of low-performing employees to receive bad reviews. The board pushed him to change things even faster, but there is no hidden actor. Bill Gates isn't playing puppet-master.
The story has some great anecdotes drawn from multiple interviews with Ballmer, including how he he met Ford CEO Alan Mulally with a sack of smartphones at a Starbucks last Christmas Eve to discuss simplifying Microsoft, and how Ballmer secretly drafted more than 40 retirement letters.
But perhaps the most telling part comes when Ballmer tries to change the way he works with his senior reports. Instead of setting one-on-one meetings as he had done for years, he gathers them in a circle and has them summarize their recent activities. Qi Lu, who was in charge of Bing and now leads up all Microsoft's online services, gave him a 56-page report, full of the kinds of charts and data that Ballmer usually liked. Ballmer made him take it back and do a three-page version. Lu said, "But you always want the data and detail!"
Soon after, Ballmer realized his own larger-than-life presence was standing in the way of change. Even if he said he wanted people to do things a new way, they weren't sure they believed him.
Here's the thing: Ballmer's approach was well-suited to the way Microsoft did business for decades. But now, consumerization is in the middle of transforming the tech industry. Products from consumer-first companies like Apple and Google have fewer features and fewer adjustable settings than older software, particularly enterprise software. They hide complexity. They aim to please users, sometimes at the expense of features IT departments want. They update themselves frequently, and often silently.
Now we're starting to see a whole new breed of enterprise companies, from Box to Workday, taking the same approach. Even Yammer -- which Microsoft acquired in 2012 -- draws its approach to software development from consumer web companies like Facebook, trickling out updates on a weekly schedule and doing real-time user testing rather than saving everything for a handful of service packs and one humongous release every three years.
In short, the industry is changing in a way so that Ballmer's strengths -- like an amazing grasp of complexity and reliance on detailed data -- are no longer what the company needs. Instead, it needs a leader who can simplify, and move fast -- echoing the simplicity and speed of change that characterize the products challenging Microsoft's years of tech industry dominance.
As Simon Bisson wrote for CITEworld in August, the big changes happening in technology made it the right time for Ballmer to step down. The question now: Who among the rumored candidates -- or even the wild-card contenders nobody is mentioning -- can apply this kind of speed and simplicity to a huge and complicated organization like Microsoft?
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