Good riddance, Mr. Ballmer!

Enrique Dans
Aug 24, 2013 · 4 min read

When the head of a company announces his or her departure, there usually follows an outpouring of panegyrics and hagiographies attempting to rewrite history, focusing on the great man or woman’s more prescient decisions rather than on their mistakes. It’s the same as speaking well of the dead: in the absence of anything nice to say about somebody who wasn’t very nice, we tend to say that the deceased had “character”, or was “good in their own way”, or emphasize their “sense of humor”.

Thus has been the aftermath of Steve Ballmer’s announcement that he is standing down as head of Microsoft. The media yesterday was awash with articles about how he “grew Microsoft’s profits” or “expanded into new areas”, or “maintained share value”, all of which are partially true. Between 2000, when he took over from Bill Gates, and this year, when he finally said he was leaving, Microsoft’s earnings grew from 25 billion dollars a year to 70 billion dollars, profits rose on average by 16 percent a year, and the company entered new territories such as video games, search engines, tablets, cloud computing, and cellphones, and the company’s share price did not fall… too much.

If you want a more objective assessment of Steve Ballmer’s achievements at Microsoft, go to the company’s a share price page on Google Finance, move the cursor under the graph for January 2000, and then compare the share price with companies like Amazon, Google or Apple: that will really put things in perspective. Between 2000 and 2013, the technology industry lived through one of its most turbulent periods, that included thedot.com bubble bursting, and then a period of high growth that is still ascending, linked to the popularization of the internet, the development on online advertising and commerce, and the mobility big bang. During this growth period, the Steve Ballmer’s main achievement has basically been to keep Microsoft on the sidelines and to make sure that the company that was a byword for technological development during the last decade of the 20th century missed the opportunity of being part of what was going on in the first decade of the new millennium. He did this while making an ass of himself in interview after interview, making ridiculous statements, laughing at his rivals’ initiatives as they went about changing the landscape, and instead focusing on maintaining an out-of-date business far beyond the advisable.

Under Steve Ballmer’s management, Microsoft arrived late and badly prepared to just about every trend, systematically failed to take advantage of its early advantages in areas such as cellphones, and virtually destroyed the company’s innovation culture by getting rid of anybody with any talent, so that he could hold onto his power.

In short, Steve Ballmer’s reign has meant a lost decade for Microsoft. Ten years wasted, during which time a company envied around the world sank into oblivion. Let’s be honest: the fact that Ballmer’s final years produced a few bright spots does not amount to a “classy exit” , but instead simply illustrates how some things got done in spite of his heavy handed presence. Steve Ballmer is the ultimate arrogant CEO, pushy, unable to see change if it bit him on the nose, and somebody capable of doing a lot of damage to a company. Promoting a man focused on finance to run a company focused on technological development has proved a big mistake: Microsoft has become a boring outfit, obsessed solely with short-term outcomes and with selling more shrink-wrapped boxes, even if this meant losing sight of each and every one of the upcoming trends that would shape the future.

The net result of Steve Ballmer’s term at the helm of Microsoft cannot be evaluated solely on the basis of its share price or profits, but must take into account the substantial damage he caused to the company’s value in strategic terms. His example will doubtless serve as the basis in business schools around the world as a lesson in how not to run a company.

Steve Ballmer has done a lot of damage to Microsoft. The sooner he sells his shares and leaves to spend his multi-billion dollar retirement fund, and the company is spared his woeful influence, the better for Microsoft’s employees, shareholders, and the market overall. Microsoft still has the capability to become a major alternative technology player, at a time when the scene desperately requires alternatives and competition. The market’s reaction to his going by boosting the company’s value by 18 billion dollars is not the result of some personal grudge: it is a harsh reflection of reality, and the send off he deserves: goodbye Mr. Ballmer, and good riddance.

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

    Enrique Dans

    Written by

    Professor of Innovation at IE Business School and blogger at enriquedans.com

    Enrique Dans

    On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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