Reboot Microsoft Culture? Why That Seems Unlikely
The Wall Street Journal has a smart article today on what’s needed in a CEO to replace Microsoft's (MSFT) outgoing chief Steve Ballmer: an outsider, the Journal surmises, who can change the software concern’s stodgy, risk-averse culture.
The thinking here, however, is that transformational change is far easier contemplated than achieved. True, some great companies have prospered because a strong-willed CEO was able to perform a culture transplant: International Business Machines (IBM) beginning with Lou Gerstner; General Electric (GE) under Jack Welch; what is today Wells Fargo (WFC) under Carl Reichardt and its merger partner Norwest under Lloyd Johnson and Dick Kovacevich; and of course Apple (AAPL) after the return of Steve Jobs.
By the way, Gerstner, Johnson and Kovacevich were outsiders. But Welch and Reichardt, arguably two of the greatest culture-transformers in modern business history, worked their way up through the ranks. Sometimes the blow-up-the-company person resides inhouse.
In any case, these are the notable exceptions. More often, a new CEO seeking to make wholesale change is ground down and worn out by the culture he or she inherits. Few executives have the willpower to inflict such tumultuous change on an organization. It’s unpleasant work, often terrorizes employees (they can resists and even undermine) and plenty of wholesale-change efforts – hello Ron Johnson and poor J.C. Penney (JCP) – are bad ideas.
Microsoft employs about 100,000 people. Many of them long-term workers who’ve settled into routines and likely become good at avoiding new tasks and challenges, like at any large organization.
On a more cheerful note, if a new CEO, from outside or insider, is instead fabulous at spotting tech trends, Microsoft has the money to buy other companies. Even though Ballmer made a succession of acquisitions, quite a few that didn’t work out, the company’s cash and short-term investments grew rapidly in recent years.
No good ideas, or an aversion by those possessing good ideas to join what's seen as a moribund company? Or everything costs too much? Microsoft, if it buys into its future as a slow/no-growth company milking legacy software, has the capacity to greatly increase payouts to shareholders.
Either way, expectations are high.
Jeff Bailey, The Editor of YCharts, is a former reporter, editor and columnist at the Wall Street Journal and New York Times. He can be reached at firstname.lastname@example.org. Read the RIABiz profile of YCharts. You can also request a demonstration of YCharts Platinum.