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August 20, 2014

Ballmer Bids Fond Farewell to Microsoft Board


A lot has been written about how difficult it is for celebrities in all walks of life to leave the stage. In fact, knowing when it is time to go from the thing that has defined your life’s work is arguably one of the most difficult tasks all of us must do. Whether it is athletics, other types of entertainment, or in business - acceding power and glory to the next generation is hard. As we have seen time and time again, it is difficult to do gracefully. That is why former Microsoft CEO Steve Ballmer’s open letter to new CEO Satya Nadella about his decision to resign from the board effective immediately, and for that matter Nadella’s response, is so refreshing.

No matter what one thinks about the Ballmer and Ballmer/Gates years of running Microsoft, the fact that Mr. Ballmer now will have lots of time to spend on his newly acquired Los Angeles Clippers professional basketball team, teaching and his charitable passions, is the right way to go about leaving the driving to someone else. Nadella needs to be allowed to set his own course for the company. He needs to be able to without having an “old bull” looking over his shoulders or being in a position to possibly formally vote, other than through their stockownership, on how the company is run.

This does not mean former executives should be silent about their opinions about the company they left. It also is a bit naïve to believe that those opinions will not be shared in private with the board members who they have worked with over the years. However, it is to say that their direct influence will be diminished appreciably and that is a very good thing. This can be particularly valuable if the performance of a former CEO is the subject of controversy.

The thing that I liked the most about Ballmer’s letter was his third paragraph:

Microsoft will need to be bold and make big bets to succeed in this new environment. Writing great software is a tremendous accomplishment and selling software has been a fabulous business. In the mobile-first, cloud-first world, software development is a key skill, but success requires moving to monetization through enterprise subscriptions, hardware gross margins, and advertising revenues. Making that change while also managing the existing software business well requires a boldness and fearlessness that I believe the management team has. Our board must also support and encourage that fearlessness for shareholders to get the best performance from Microsoft. You must drive that.

The message is not just appropriate for Microsoft. This is something that should resonate with those running all of the large software companies whose businesses are in the midst of wrenching and accelerating change.  




Edited by Stefania Viscusi

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