Steve Ballmer has delivered his final interview as Microsoft CEO, talking to long-time Microsoft reporter Mary Jo Foley.
The interview is complimentary, focusing on Ballmer’s successes, and cruising past his failures like mobile and tablet computing — the words “iPhone,” “iPad,” “Android,” and “Google” don’t appear.
But in celebrating Ballmer’s success, we see why Microsoft is flailing today. We see why the company wants to hire Alan Mulally, a CEO that is celebrated for his turnaround expertise. It’s strange to see a company expected to generate $US84 billion in sales for fiscal 2014, a 7.4% annual increase, need a turnaround expert.
Here’s the quote from Ballmer that pretty much explains how the company got in the position it’s in: “In the last five years, probably Apple has made more money than we have. But in the last 13 years, I bet we’ve made more money than almost anybody on the planet. And that, frankly, is a great source of pride to me.”
Ballmer explains that from day one, his job at Microsoft was to think about money.
He says he was “the business guy, whatever that meant,” when Microsoft was just starting out. And from that day forward, he thought about, “How do you make money? How do you make money? How do you make money?”
He adds, “That doesn’t mean nobody else ever thought about it, but ‘How do you make money?’ was what I got hired to do. I’ve always thought that way.”
This is the problem with Ballmer and his run at Microsoft. His starting point for any decision at the company centres on money. He thinks about how Microsoft will make, or lose money on a product.
At Google, the product comes first, then the company starts to figure out plans for making money. To be sure, Google has an overarching principle of protecting its lucrative search business, but it also builds products that aren’t obvious contributors to the bottom line like Android, self-driving cars, and Google Glass.
At Apple, money is obviously important, but it’s not ever going to be a source of great pride. When Tim Cook leaves Apple, and gives his exit interview, he’s not going to talk about how much money he made as CEO. His focus is going to be on the products Apple made, and the employees he worked with.
Ballmer does spend some time talking about Microsoft’s products. He says, “I feel particularly good” about having pushed Microsoft into the enterprise. He also mentions Xbox, saying it “was my decision, my accountability.”
In each case, though, Ballmer isn’t effusive in his enthusiasm about the actual product itself.
Perhaps this is just a matter of the format of Foley’s story, or perhaps it’s the questions she asked. Maybe he was actually bursting with excitement about Windows 8, and Windows Phone, and Excel, and Sharepoint, and Skype.
We doubt it, though. Ballmer has never been a product guy.
The success of modern consumer focused technology companies is all about the products. Facebook, Instagram, Google, Apple, and Amazon are all producing products that people love. Those companies are guided by CEOs that dive deep into the details of the product and have an ability to connect with consumer desires.
Ballmer dove deep into the details, but it was always the business details.
This is the problem with Ballmer’s tenure at Microsoft, and ultimately, this is why the company wants a turnaround expert to fix what Ballmer is leaving behind.
For an even better explanation, here’s Steve Jobs in one of his last interviews explaining what has happened to Microsoft with Ballmer in charge:
I have my own theory about why decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company. John Akers at IBM was a smart, eloquent, fantastic salesperson, but he didn’t know anything about product. The same thing happened at Xerox. When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft. Apple was lucky and it rebounded, but I don’t think anything will change at Microsoft as long as Ballmer is running it.