The high level exodus from Microsoft (MSFT) continues with 23 year veteran Bob Muglia the latest casualty. In the past 9 months three division presidents and Chief Software Architect Ray Ozzie have resigned. CFO Chris Liddell also left the company a while ago. There have been other high level division head resignations over the past few years including Kevin Johnson and Jeff Raikes. Is there a pattern here?
Thousands of employees have been laid off or fired over the past two years. But these guys are the highest level execs at Microsoft, all of whom reported to CEO Steve Ballmer. Is it possible that the presidents of all these divisions messed up so badly in the past 9 months that they were asked to leave? Given the reported financial results this seems inconceivable. There is something else going on here.
Who will run the business? - Microsoft has always been loaded with talented people and has a deep bench. Finding capable people to run these divisions will not be difficult. In fact, these juggernaut businesses are so powerful that they will generate billions of dollars no matter who is running them. There are already plans in place for the next version of every product, and thousands of people working on them as we speak. However, whenever a company loses top management talent like this...there are serious impacts.
Vision - The bigger questions are who will lead the vision for the future, and who will be ready to succeed Steve Ballmer when the time comes? Ray Ozzie was a talented visionary and architect of the future. Bill Gates selected Ray Ozzie as his successor as Chief Software Architect. But they are both gone. Who else at Microsoft has the gravitas and vision to lead the product direction for entire company? This is probably the single most important job in the company over the long term. Yet, Ballmer has already stated he will not replace Ozzie or fill the position. Hmmm....
Succession Plans - CEO succession plans are important for a company with nearly 100,000 employees and over $60 Billion in revenues. Steve Ballmer has been CEO of Microsoft for 10 years and can continue as long as he wants. Steve is just 54 years old. He has the support of Bill Gates and the Board of Directors, and is one of the largest individual shareholders. Steve also has a net worth of more than $13 Billion...so its not like he is working for the salary, or would leave for a better job. OK, but what happens if Ballmer gets in a plane crash or is struck with with cancer? It is these unpleasant and unexpected events that make succession planning a requirement at large companies. Wall Street cares about these things, even if we don't.
Steve Sinofsky is one of the few experienced Microsoft execs left standing. Sinofsky was promoted to president of the Windows division, the largest division at Microsoft. Is he the heir apparent?
Billion dollar questions - Losing a seasoned exec like Bob Muglia is a big, but recoverable loss. Losing Muglia, Robbie Bach, Steve Elop, Ray Ozzie, Chris Liddell, Kevin Johnson, Jeff Raikes, and other senior execs is devastating. The effects aren't visible yet. It takes years to unfold. Each individual business division will get a new leader, and revenues will continue to chug along.
But, who will be the visionary for the future? And, who will be ready to step in as CEO when Ballmer leaves? Those are billion dollar questions.
Disclaimer: This is my personal blog. The views expressed here are my own and do not reflect those of my employer. I was an employee of Microsoft for 5 years. I no longer have any connection to the company and do not own any MSFT shares.
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