The uncanny familiarity with the two tech giants of yore’s search for a leader.
Jason Redmond / Reuters
The rapidly-changing machinations of Microsoft's board seem to be playing out in real time on the web as the company's dramatic CEO search drags on into 2014.
This time, Ford CEO Alan Mulally — who advised outgoing CEO Steve Ballmer during its major reorganization into "One Microsoft" — is backing off as a potential candidate for the job. The reason behind Mulally's decision is twofold, per a report in The Wall Street Journal: concerns over the dynamics of the board and Ballmer, as well as with founder and chairman Bill Gates; and the dramatic number of leaks that are basically giving a direct play-by-play of the boardroom drama.
At first, it seemed like Nokia exec Stephen Elop was a frontrunner when the company bought Nokia's devices and services segment. That didn't last long as other candidates gained popularity among the board, including the technically savvy enterprise executive Satya Nadella and former Skype head Tony Bates. Only one thing has remained constant — Microsoft can't make up its mind, and the search continues to drag on.
"It's not that it's a big enough beast to absorb the distraction, it's distracted because it's a huge beast," said Norman Young, a senior equity analyst at Morningstar. "They're in the middle of a huge reorganization, they just bought Nokia, they have a hundred thousand employees and are trying to get everyone lockstep into this company oriented around hardware and services — to do that and change the corporate culture and continue looking for a new CEO, is proving to be I would expect, pretty difficult."
But this is a familiar situation for many in the tech world that ran through a similar playbook in 2012, when Yahoo was searching for a new CEO after it ousted Scott Thompson under pressure from activist investor Dan Loeb. Distractions like this might not necessarily impact the bottom line for a company, but as the search continues to drag on, it certainly doesn't help morale — which leads to less productivity and, in the end, a more limited ability to execute.
"it's gotta be difficult in Redmond right now," Young said. "The longer this drags on, they probably won't take a bottom line hit, but the push to move faster and iterate things quickly — which it looks like they have been able to do recently — it may be a little more difficult to pull off."
Yahoo's drama started with Dan Loeb, who vehemently argued that the leadership at Yahoo wasn't up to snuff.
Steve Marcus / Reuters / Reuters
Loeb set off a huge debate, in particular when information about Thompson lying about having a computer science degree surfaced and led to intense scrutiny of the executive's job performance. Essentially, Loeb wasn't getting enough value out of Yahoo, and sought to have that changed.
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