Another well-done Wall Street Journal article by Rachel Feintzeig on Microsoft CEO, February 4, 2014:
So, you’re the new CEO of Microsoft: a sprawling tech company that critics say missed the mobile and social revolutions, losing crucial market share to Google and Apple. And your two predecessors—one of whom is Bill Gates—are hovering over your shoulder.
Where to start? Former executives and management gurus have a few ideas for incoming chief Satya Nadella.
Sydney Finkelstein, a management professor at Dartmouth College’s Tuck School of Business, said departing CEO Steve Ballmer, who will now sit on the board, represents Nadella’s greatest challenge.
“I think that’s the single biggest problem with respect to change. [Nadella’s] got to be able to manage a very, very strong personality who’s just stepped aside, who’s even on record [saying] he wish he could have been the one to make the changes,” Mr. Finkelstein said.
“Be aware that anything you’re going to do, it’s almost like there’s an implicit veto by Ballmer,” he said. “I think Ballmer is the third rail in any sort of change effort.”
Winning over Microsoft’s board members should be another priority for Nadella. “They’re beholden very much to Ballmer and Gates,” Mr. Finkelstein said.
He recommends Nadella focus his energy on gaining allies internally and demonstrating his own track record as CEO for a year or two before he makes any big changes.
“With things going in the right direction, you gain more power,” he said.
Michael Useem, a management professor at the University of Pennsylvania’s Wharton school, disagrees. As a Microsoft veteran, Nadella needs to move fast, he said. New executives typically have a honeymoon period of 90 to 100 days to get to know the organization and develop their approach. But Nadella should only take 50 days to get up to speed.
“He knows the personalities. He knows the issues. He knows where value’s being created and destroyed and he knows where are all the skeletons are,” he said. “He will not be allowed to have that luxury of a full year to take charge.”
“What’s going to happen in the next 90 days is people throughout the organization and the industry are going to come to him with their proverbial ball of problems and ask him to solve that problem,” she said. “He’s got to not buy into that framework, because his job is to figure out how to get other people to solve problems.”
“So instead of telling, controlling, directing, he’s got to…figure out how to get them to know how to solve the problems themselves,” she said. “It’s all about getting the team at Microsoft to understand what to do, not that he tells everyone what to do.”
And if Nadella wants to take cues from other tech companies, he should look to IBM, not HP, she said. The latter company’s chief, Meg Whitman, is intent on protecting core businesses, Ms. Merchant said, while IBM has devoted itself to reinvention every few years.
William George, the former chief executive of medical device company Medtronic Inc. and a professor at Harvard Business School, said Nadella’s first course of action must be to establish a team that’s his own. Veterans – including those who wanted the job Nadella won – have to make a choice, he said.
“They’re either going to be loyal and committed to Nadella or they should move on,” he said.
Nadella should promote his internal favorites or bring in outside talent to fill out his inner circle. Then he has to turn his sights to the board of directors.
“The next step is to work with John Thompson,” the new chairman, George said. “Nadella’s got to work with him to upgrade the board. They need a newer board, a fresher board. [They] need to bring in sitting CEOs, recently retired CEOs, to add wisdom and insight.”
After a lengthy and public search process, Nadella also has to set forth his vision for the business more quickly than most.
He should lay out his full strategic plan in about six months – or at longest, a year – George said. If Nadella wants to make dramatic changes, it will take five to seven years to make that transformation. And George, for one, hopes Nadella thinks big.
“They really have to go from becoming the fast follower to being a leader in innovation,” he said of Microsoft. “That’s where I think the vision should be.”