Microsoft CEO drumbeat picks up for Nadella as CEO

Microsoft CEO drumbeat picks up for Nadella as CEO

Summary: The good news about naming Nadella CEO would be that he knows Microsoft's culture well.


The saga that is Microsoft's CEO search appears to be pushing Satya Nadella, the company's enterprise and cloud leader, as a front runner to succeed Steve Ballmer.

According to Bloomberg and Re/Code Nadella is the front runner to take over as CEO. No one is citing named sources, but Microsoft did say it was expecting to name a new CEO early in 2014.

Microsoft won't comment on the reports. 

Leading Microsoft is apparently the job that no one is jumping for. Microsoft has looked at its own execs such as executive vice president Tony Bates and Kevin Turner, operating chief. The company also apparently wooed Ford CEO Alan Mulally as well as Qualcomm CEO on deck Steve Mollenkopf.

Also: CEO candidate Nadella: Here's what Ballmer taught me

The good news about naming Nadella CEO would be that he knows Microsoft's culture well. He also knows Microsoft's enterprise business and that unit is what carries the company despite the software giant's love affair with Xbox, Bing, Surface and now Nokia.

What's unclear about all of these CEO stories is what happens with Bill Gates. Gates' future involvement with Microsoft is likely to be a sticky issue with any new CEO. Bloomberg said Gates may step aside. In any case, who wants to run Microsoft looking over his or her shoulder to see what Gates thinks? Perhaps Nadella won't mind. 

Topics: Enterprise Software, Microsoft

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  • CEOs don't like it when their bosses check up on them?

    "In any case, who wants to run Microsoft looking over his or her shoulder to see what Gates thinks? Perhaps Nadella won't mind."

    I'm sorry, but isn't that what all bosses do? You do realize that the board is the shareholders' representatives, and that the CEO is beholden to the board, are the CEO's boss? I've never been to a job without my bosses periodically checking up on me, particularly when I first arrive.
    P. Douglas
    • Micrososft needs CEO, who understands what is missing...

      ... what the company has so far achieve and what it needs to in order not be become the IBM of 1990s.

      I think the best person, who can do the above, is only someone, who worked for Microsoft, whip is technological advanced and has done has executed his responsibilities very well. Hence, Nadella has all these abilities and more.

      Never overlook the reality that Microsoft 0 and 1. It does not sell cars.
    • Yeah, but...

      It's one thing to have your boss looking over your shoulder. It's another to step into the CEO role and have Bill Gates, the founder and spiritual leader of the company, looking over your shoulder. If he still owned a substantial share of the company, it might make sense (he's still marginally the largest shareholder, but he's sold off so many shares, it's far from "substantial").

      If I was going to take that job, I'd have no problem answering to the board, but I'd probably say "I'll only take it if neither BillG nor SteveB is chairman".
      • That's okay

        Fine. So then don't take the job. There are so many internal candidates at MS, far greater than you, who would be happy to take the job.
        P. Douglas
      • If there is to be a new direction...

        ...and I think there needs to be, then the old-time Microsofties that worked for Gates are the very people who will need to buy into it. So for political reasons alone, it would be useful for the new CEO to have Gates serving as chairman so that he can help plot a new direction that will be acceptable to both the stockholders and the employees (especially the old guard). And the institutional memory provided by both Gates and Ballmer will be useful going forward, no matter what direction MS takes (and with Gates in the chair, it's more likely that Ballmer will behave himself in the boardroom).

        It used to be said that nobody ever made money by trying to outsmart Bill Gates. I think any CEO worthy of the job would find the presence of such a man on his board to to be a relief, rather than a threat.
        John L. Ries
        • There are already on the new direction

          It will be up to the next CEO to execute what has already been layed out.
      • Two ways to see things

        The half empty view is: Bill Gates watching over your shoulder.
        The half full view would be: having access to people people that have been directly in your shoes for advice.

        Being at the top all alone can be difficult. Having two former CEOs that can share their direct experiences in what worked or didn't can be helpful to a new leader.

        Though it isn't like Ballmer spent the last 13 years running the company with Gates on the board. If he can do it, so can the next person.
      • Bill is a great mentor

        Bill has mellowed a lot in the past 30 years. He listens more & is likely to give the new CEO much more freedom to formulate a path.
        That said, his Bullshit radar is very accurate. He forces you to do your homework. He argues a counter position, often just to see if you really believe in your position & have considered all angles.
        If you prepared well & understand where he is coming from. You often left those meetings on an emotional high.
        Bill would be a great mentor & friend for anyone with the calibre to take on that role.

        The people who paint Bill differently typically tried to "wing it". For them the outcome was pretty brutal. He didn't need to call them an idiot, they usually just proved it to themselves & everyone else in the room. They rarely got an audience with Bill again. It was easier to paint Bill as "really tough" than to admit that their ideas were flawed & they were not prepared.
      • MSFT Shareholders

        Major Direct Holders (Forms 3 & 4)
        Holder Shares Reported
        GATES WILLIAM H III 357,990,173 Nov 18, 2013
        TURNER BRIAN KEVIN 1,400,309 Sep 19, 2013
        SINOFSKY STEVEN J 1,176,195 Sep 10, 2012
        RUDDER ERIC D 919,624 Sep 19, 2013
        SMITH BRADFORD L 906,914 Nov 6, 2013

        Top Institutional Holders
        Holder Shares % Out Value* Reported
        Vanguard Group, Inc. (The) 366,593,433 4.42 12,200,229,450 Sep 30, 2013
        State Street Corporation 331,861,175 4.00 11,044,339,904 Sep 30, 2013
        Capital World Investors 251,826,813 3.03 8,380,796,336 Sep 30, 2013

        Top Mutual Fund Holders
        Holder Shares % Out Value* Reported
        Vanguard Total Stock Market Index Fund 109,116,097 1.31 3,631,383,708 Sep 30, 2013
        Powershares Exhg Traded Series 1 93,646,384 1.13 3,503,311,225 Dec 31, 2013
  • "who wants to run Microsoft..."

    If you're confident that you're right, then who cares who's second guessing you?

    In a publicly traded corporation, the CEO should give his best advice to the Board, which should then do what it thinks is best. If one or more members of the Board (which may include retired executives, as well as outsiders) disagree with the CEO, then they should have the privilege of saying so and saying why before the board makes a decision. It may even be that the CEO will end up agreeing with the points made.

    It seems to me that a CEO would would feel threatened by the presence of his predecessors on the board, or of others who might disagree with him, has no confidence in his own ability to lead in the face of dissenting opinion and should therefore probably not be a CEO at all.
    John L. Ries
    • The other problem is...

      ...that a board of directors that routinely rubber stamps whatever the CEO decides is doing a disservice both the CEO and to the stockholders, as it means that there is no real consideration of the proposals made, which means that the CEO is deprived of alternate viewpoints, which means that he probably won't find out when he's wrong (in which case, why bother with a board?).
      John L. Ries
    • The CEO works for the board, not the other way around

      The board should be saying to the CEO candidate, "This is what we do, this is the general direction we want to go, do you think you can come up with a plan which takes us there?" It is not all that different from when a captain runs a ship for a shipping company. Given the fact it is not the captain's shipping company, he is constrained to act according to the shipping company's general policies and direction. The only time a CEO can act any way he wants, is if he has a controlling interest in the company.
      P. Douglas
      • I agree

        Though our business culture expects the boss to make recommendations and lead the discussion.

        The bottom line is that the Board has a job to do and so does the CEO. If the CEO just passively follows orders, then he's not doing his job. If the board passively ratifies the proposals of the CEO without consideration or debate (or even if it limits itself to advising the CEO), then the members aren't doing their jobs. The Board (as the principal policy making body of the company) has the right to win the argument, but that presupposes that there will be disagreements from time to time and that everybody feels free to say what he actually thinks.

        Groupthink is bad no matter where it happens.
        John L. Ries
        • Right

          Generally the CEO comes up with a plan that is consistent with the goals of the board, and then executes it. It is then the board's job not to get in his way, but to make sure things are going kosher. But like with all bosses, the board has the right to work closely with the CEO, and pull back more and more, when it is satisfied that things are working out.
          P. Douglas
          • I'm not all that certain it needs to pull back

            The responsibility for making policy still lies with the board. Ergo, the board should always be following its own judgement, informed by the CEO's recommendations, but never governed by them, unless, of course, the members concur.

            A CEO who would feel threatened by a board looking over his shoulder doesn't belong in the job.
            John L. Ries
          • Clarification...

            ...a CEO needs the freedom to decide how he's going to do his job, consistent with the policies laid down by the board. The board gets to decide whether the CEO's ways of doing things actually get the job done.
            John L. Ries
      • P. Douglas: "The CEO works for the board, not the other way around"

        In most, if not all, cases, the CEO is a *member* of the Board of Directors. In many cases, the CEO is the Chairman of the Board of Directors.

        Thus, the CEO is always involved in discussions involving strategy, tactics and operations (even if there is a COO, the CEO will have discussions with the COO regarding operations). Sure, the CEO can be overruled by the other members of the Board of Directors.
        Rabid Howler Monkey
        • Yes the CEO is usually a member of the board

          Yes you are right. The CEO is usually a member of the board. But when he gets hired by the board of a company, he agrees to follow the general direction of the company laid out by the board. He is also beholden to the collective will of the board. It is possible for the CEO to convince the board to go in new directions, but again, it is ultimately the board's collective decision he must follow. Also, a CEO is usually the chairman of the board, when the CEO starts the company - not when he gets hired by the board.
          P. Douglas
        • The CEO as chairman used to be standard procedure

          It's not as common any more, as many boards have reached the conclusion that a non-executive chairman works better.
          John L. Ries
          • John L. Ries: "It's not as common any more"

            Here's a relevant link on the subject:


            It's certainly not uncommon ...
            Rabid Howler Monkey