5 Ways Microsoft Can Get Back on Track in 2013: Steve Ballmer Steps Down

By Anthony Shields  JAN 11, 2013 3:00 PM

He's had a good 13 years, but perhaps it is time to make way for new talent.


Editor's note: This is Part 5 of a 5-part series that has been published over the course of this week.

I’ve got nothing against Steve Ballmer, but perhaps his time at Microsoft (NASDAQ:MSFT) has run its course. Ballmer has been at Microsoft since 1980, which is when he started as a business manager. From there, he rose to become the company's president in 1998, and eventually its CEO in 2000. In that time, he has built a legacy that would be envied by many corporate leaders. Although Microsoft would be hard-pressed to find someone with more passion for the company, its struggle to maintain relevance could be mitigated by a regime change, or hiring someone with a fresher take on the tech industry.

Although Microsoft’s finances have been pretty solid throughout his tenure, Ballmer's presence is becoming a deterrent to improvement in the company’s weakest area: its image. In researching this series, I came across a great deal of unflattering pictures and controversial quotes that indicate Ballmer’s overall negative perception by the media. It almost seems like a rule that every article insulting Microsoft has to have a ridiculous picture of Steve Ballmer in it, and his own aggressive statements against other tech companies haven't added much grace. In the past few years, he's vowed to kill Google (NASDAQ:GOOG) and has called Android a product for computer science geeks. Ballmer has also mocked Apple for charging $500 for a logo, and called Linux a "cancer that attaches itself in an intellectual property sense to everything it touches."

Ballmer hasn't been too popular with the business media, either. In May of last year, Forbes named him the worst CEO of any publicly traded company, and accused him of steering the company away from lucrative industries. The article may have been written in haste -- one of its premises was that Microsoft had given up on the tablet industry, which has since been revealed to be untrue -- but its reminder that Microsoft's stock price still idles in the low $30s, far from its $60 peak right before Ballmer started his term, was a well-made point. Perhaps worse, hedge fund manager David Einhorn has been on Ballmer's case since 2011, going so far as to say that "his continued presence is the biggest overhang on Microsoft's stock."      

While some might argue that a CEO’s public image is not relevant to his or her abilities, it’s important to remember Steve Jobs’ trendy genius personality was a big part of Apple’s brand until his death. Jobs’ public image and hip eccentricity played a big part in making Apple products cool. While Ballmer’s flamboyant stage appearances would be great if he was selling vacuums or cleaning products, he hasn't done a great job lately of reaching consumers about Microsoft’s value as compared to its rivals.   
If Microsoft wants to take back its position as the head of the tech industry, it may need to restructure its leadership with fresh talent that can reinvigorate its brand. A new corporate spokesperson or CEO could work wonders in inspiring consumer and investor confidence that Microsoft will continue to perform well into the future. The good news is that the company has a great reputation for attracting high level talent, and I’m sure that there are plenty of able candidates willing to take up the position. Over the next year, Ballmer should comb through the staff and groom a selection that possesses a sharp business mind and a great public presence. A CEO that could win over the media could do a lot in making consumers fall in love with Microsoft again.
If Ballmer were to step down, he could continue to serve Microsoft as a board member or an official advisor. Similar to how Bill Gates oversaw software development and technological guidance after stepping down in 2000, as a non-executive chairman Ballmer could provide counsel for the company's financial decisions. Overall, he has done a lot of good in helping the company stay afloat, but sooner or later, all good things have to come to an end. 

Be sure to check out the rest of this series here:

5 Ways Microsoft Can Get Back on Track in 2013:

1. Release the Xbox 720 Early

2. Break Up the Company

3. Build a Better Ecosystem

4. Stop Copying Apple and Google
No positions in stocks mentioned.