Former Microsoft executive says Ballmer culls internal rivals to retain power | Hacker News Reader

Former Microsoft executive says Ballmer culls internal rivals to retain power

uk.reuters.com

146 pointsgebe116 comments

I am not sure why this is considered news. Guess just because this guy went on the record to state the obvious?

Every large company develops internal politics with various degrees of harm to itself and its performance. If the business is led by a non-founder, non-technical, non-performing CEO it is a given that he will always feel like an insecure usurper/impostor more concerned about protecting their job from rivals than actually leading.

This is yet another data point in support of Andressen Horowitz's thesis about backing founding CEOs. I might add that's also a strike against promoting a head of sales to CEO.

It's news because Joachim Kempin has got a book to sell and he or his publishers have hired sufficient PR talent to make it news.

  > I am not sure why this is considered news.

In what I'm sure is purely coincidence, the former exec speaking out against Ballmer has a book coming out today on this very topic.

Internal politics are one thing but I've yet to hear a story of anyone attempting to overtake Ballmer as CEO when he has Gates' backing. There were stories about the usually tight-lipped Apple and how Forstall was fired while attempting to gather more power within the software division.

The story that comes across to me is of a CEO that knows he's not doing a good enough job transitioning MS into a new era. His insecurity gets the better of him and he fires anyone who is conceived, by the media, of being a potential threat while losing major talent in the process.

This is not just some sort of non-innovative company well know for it's vicious internal fighting like EMC. This is Microsoft, an extremely important and, yes, innovative company.

I think that this really is news - peeling back the covers to see the mess going on at Microsoft seems to my mind quite interesting.

You can find/replace Microsoft with Oracle and many other companies though. Oracle is led by one of the founders and in many ways it's even a bigger mess there.

> Every large company develops internal politics with various degrees of harm to itself and its performance. If the business is led by a non-founder, non-technical, non-performing CEO it is a given that he will always feel like an insecure usurper/impostor more concerned about protecting their job from rivals than actually leading.

Not just large companies, but also small businesses, even open source software projects, and even those projects building a programming language.

There was a lot of speculation as to the reasons for Sinofsky's departure a few months back. For me, at least, this item provides a likely explanation from someone who was in a position to know.

Every call for Ballmer's ouster ignores two important points. He is the second largest shareholder. His college buddy is the largest.

No analyst has clout with the shareholders. Nobody inside does either.

What I see in Sinofsky's departure is a clear signal that the type of politics which this article assumes to be the proper way of creating succession is being deprecated within Microsoft. What I mean is that the argument is premised upon the idea that rivalries at the executive level should be acceptable.

Just because that is the way most public corporations work, doesn't mean it ought to be the way. Gates and Ballmer have been running Microsoft for thirty years. They've got real long term interest in creating a sustainable culture.

> Every call for Ballmer's ouster ignores two important points. He is the second largest shareholder. His college buddy is the largest.

This is an important point. These types of articles imply that he's running the company as an ego trip instead of a heavily-invested individual shareholder. Very key to keep in mind.

He was given founder's equity despite not being a founder because he was brought onboard to run the business side of the business.

> He is the second largest shareholder. His college buddy is the largest.

Being a college buddy of one of the founders hardly qualifies someone to run a multibillion dollar company.

Well, he has a dozen years experience doing it. He brought about the IPO. He's been the business partner for thirty years. Who would be more qualified?

It also doesn't disqualify someone. At the end of the day, it's the shareholders decision.

Well, if majority shareholders put in a crony that hurts the company as a whole but benefits those few shareholders personally (as could be argued to maybe be the Ballmer case) - then that is currently illegal and can be attacked in court by any minority shareholder.

No, but it's Ballmer's job to prove himself competent for the job he occupies. I'd be disappointed if he did that by voting for himself.

The company is still afloat and still profitable - he's doing a much better job than quite a few CEOs out there.

I'll give you he's not the most incompetent CEO out there, but turning the Microsoft he received from Gates into something that's "still afloat" is not that much impressive.

Microsoft is losing the new operating system war in a big, BIG way. Just because the boat is still afloat doesn't mean it's not rotting below the water line.

Sure but they have their R&D arm and they easily have enough cash to acquire upcoming companies. Granted of course, they will need to be smart enough to spin money out of those things but they aren't in a dreadful position like Kodak was.

I would not be so sure about that. I know a lot of people who like Windows 8 and others eager to get a Windows 8 tablet Pro(Intel). The one OS across different devices could turn out to be a powerful choice.

> I know a lot of people who like Windows 8...

My experience is the opposite. The reaction I see to Win8 is a lot more negative than the reaction to Vista. They are all power users though, or former power users considering that none of us can figure out how to do basic tasks in Win8.

Microsoft fired the guy who created Windows 8. That doesn't strike me as a positive move.

No it isn't, even if you feel like he doesn't deserve the position.

It would be nice for us if he were replaced by someone more competent, but unfortunately the world doesn't believe in fairness...

MS revenues have grown by 45 billion dollars under Ballmer (http://en.wikipedia.org/wiki/Steve_Ballmer). Without Ballmer .NET would not have existed and the XBox would not exist as it exists today. I have no great love for the guy but I've yet to read a convincing argument for his ouster. Just priggish former executives badmouthing the company that lifted them into the 1%.

Saying Ballmer is responsible for the existence of both .NET and Xbox is like saying Al Gore invented the internet.

There were lots of very smart leaders and engineers involved in the creation of both of those and their contributions far outweigh Ballmer's decision to "green light" those projects back in the late 90s.

"During my service in the United States Congress, I took the initiative in creating the Internet. I took the initiative in moving forward a whole range of initiatives that have proven to be important to our country's economic growth and environmental protection, improvements in our educational system."

I don't know, it seems fair to say that the person who made decisions about the direction of development that fostered the development has a claim on having caused said development.

I think the question you need to ask is whether the outcome would still be the same if the "decision maker" did not exist.

It's fair to say that Steve Jobs was a decision maker. Did he not take the "initiative"? Would Apple exist as it is today without him? Certainly not.

Also, President Bill Clinton ordered Selective Availability for GPS. Basically allowing for more precise GPS coordinates for civilian use. Do you think this decision did not help foster the use GPS system in cars?

My point is that decision makers cannot claim FULL credit for the development of a technology but they can claim credit nonetheless.

Up until 2008 Bill Gates was running MS. From 2008 to today, the period of time when Ballmer was in charge and on his own, MS's revenue has grown by only 17%, adjusted for inflation. That's only 4% a year.

Let's not forget their market share has dropped. A company is measured by it's today, and it's tomorrow.

imho, the biggest reason for his ouster was that he had no internet strategy - his plan A was buying Yahoo. No innovation, no imagination, no results.

Web strategy? Like media? Does a technology company need to have a content/media component -- which Yahoo basically is.

Azure is a decent extension to the MS development ecosystem. Xbox and Xbox Live seem to be doing well -- I don't use either. Bing, while not Google, has it's fans.

Where MSFT was late to the game is in their approach to the post-PC era. WinCE/WinMo were "ok" at the time, then the iPhone came along. Win8, Surface, WP8 are all relatively new - do I expect the same success as, say, XP or the like? Not really, but that path is still playing out for them.

Microsoft has lost; there's no getting back the head start they once had. It's not like Windows 8 is going to set the record straight and grow Microsoft to 10x the size of Apple and Google combined, like it once was. In part, this is because of their utterly flawed understanding of internet and the way humans (not businesses) work. Steve Ballmer is a joke of a CEO; a loud, screaming monkey that thought the iPhone was "cute". The guy is a moron.

>Microsoft has lost; there's no getting back the head start they once had.

Couldn't we have said the same thing when Apple lost to the IBM PC when they didn't "get" business computing? (the debacle that was the Apple III - a supposed "business" machine)

Yes, and Apple had to completely reinvent itself to get to the point where it is now. Apple then and Apple now are two very different companies.

Apple didn't reinvent itself. It cut products to a bare minimum, invested in an OS (and infrastructure) to move beyond MacOS, and then used that success to invest in and build new products.

It started with focus.

Ballmer has been filmed screaming developers and talked about throwing a chair. MSFT revenues have grown under his time, but the company isn't sexy. Have there been opportunities lost? Yes. To say it has lost? They have many years of mocking their cash cows before all is lost. MSFT has an odd habit of learning and adapting. We will see if that still exists.

It has been awhile but at one point MSFT spent more on pure research than AAPL did on their whole R&D budget. Research takes time, but AT&T and IBM aren't doing much of it these years. Investing in research is another plus, not in the near term.

Your comment seems pretty short sighted though, don't you think?

I think that it is only in the long term that Balmers mediocrity becomes clear. Short term analysis turns up that he really likes "DEVELOPERS!" and throwing chairs, but all the real criticisms (not amusing anecdotes) that I am seeing span several years.

I've been thinking for a while that Microsoft may have carved out a niche of letting others do the innovation, and then copying them and improving on it, not unlike Japanese companies.

Windows Phone/Mobile, Surface, Xbox, Search Engine, and Azure are all effectively this model. Hackers place a high value on innovation, but continuously increasing revenues with this 'embrace and extend' + kaizen model seems to work for them so far.

This is the definition of creating. Bringing other ideas together, and making them better.

Apple are exactly the same too. The stuff I love the most has come from elsewhere.

I meant Search and their media holdings. Not cloud services. Sorry for not clarifying.

This article is a piece of uninteresting, content-free, gossipy garbage and I'm not sure why it was voted to the front page. This guy doesn't like Ballmer and he writes a book about it and that's news?

Probably throws chairs at them...

To be serious, this is normal in most corporates. It starts when you let the MBA* with the personality disorder in, you're fucked. I've watched three companies fall at the hands of such people.

* This is not true of all MBAs, but I seem to see a trend where there are more borderline psychopaths.

> This is not true of all MBAs, but I seem to see a trend where there are more borderline psychopaths.

You "seem to see a trend"? On what is this observation based? On your detailed survey of the published clinical literature? Maybe on all the research you collated while assisting in the latest revision of the DSM? Perhaps on the personality assessments you've performed as part of a dissertation for your doctorate in psychology?

Or perhaps on nothing, and instead you are in no way qualified to make this sort of claim.

I'm not qualified to make that claim at all.

However, there is plenty of literature that backs up my claims by people who do have the qualifications. Someone actually posted a good reference in another reply:

http://www.amazon.com/Snakes-Suits-When-Psychopaths-Work/dp/...

Plenty of literature and the best example is a trade paperback? How about some journalistic publications? While I do not doubt that Hare and Babiak have the credentials, the linked book seems rather fluffy. It specifically does not discuss any actual psychopaths, merely fictional ones, nor does it seem to quantify any actual increase in the number of psychopaths in the business world. Rather, it seems instead to discuss how psychopaths can thrive in the business world, which is a very different question from how many. (I have not read the book, though, merely the previews and excerpts that I could find.)

And of course, let us not forget that an increase (if there is one) in psychopaths in business is not the same as psychopathy being "normal in most corporates". Nor should we pretend that all business people are MBAs or that all MBAs are even working in the business world.

In short, you've got little to no evidence for an increase in psychopathy, even less evidence for the jump to it being common, and basically no reason for the link to MBAs.

Steve Ballmer does not have an MBA.

To be exact, he dropped out of the Stanford Graduate School of Business MBA program to join Microsoft.

I should have made the more generic point "MBA types" (high business, executives etc). Not specifically MBAs.

The vast majority of MBA's are not executives, but work in either mid-management or finance-specialist jobs (accounting, audit, financing, etc).

Are you sure that MBA-typical people are really what you call "MBA types" ? In mass media you'd be seeing only a small, very nonrepresentative, very biased sample of them.

Yes entirely. I work in the financial sector and deal with ALL levels of management that you mention above. In fact, I regularly deal with an organisation that has 2500 managerial staff.

I've been on the end of management politics for 20 years as well so I know how it works. I've watched climbers and sinkers and the climbers are ruthless and have a statistically higher quantity of MBAs between them (it's amazing what you can suck out of linkedin).

No.

But I wouldn't rule the personality disorder out. Neither for him, nor his predecessor.

MBA programs attract borderline personalities? That's a new one.

In reality, the MBA provides managers with a framework to conduct business in a methodical manner. It gives them a process to use, so that their personalities don't have to be such a large factor.

I've never done an MBA but I know many who have; it's mostly case studies and common sense. If you ONLY have an MBA and no other particular expertise, then yes, you are just another talking head. But if you are an ME or EE or SWE with an MBA then you have a formidable set of skills to draw on.

People that rank on the Hare scale of psycopathy are over-represented (relative to prevalence in broader society) in corporate C-suites, controlling for age, gender, race, etc...[0] I am not sure what the representation of MBAs is in the C-suite but I assume it is also fairly high. I do not believe the book examines the representation amongst MBAs specifically, though.

[0] http://www.amazon.com/Snakes-Suits-When-Psychopaths-Work/dp/...

There are several orders of magnitude less people in C-suite positions than in MBA programs. If most needles are found in haystacks, it doesn't mean that haystacks consist mostly of needles.

"Over-representation" is also pretty vague and the leap to anything like "common" is completely unjustified. A paper co-authored by Hare (referenced below) cites a prevalence of 1.2% for "potential psychopathy" (couldn't find a number for strong psychopathy). So if 2% of C-level execs were exhibited potential psychopathy, then psychopathy would be way over-represented, but still quite uncommon.

http://www.hare.org/references/NeumannandHareJCCP2008.pdf

Just for completeness, another study found the prevalence even lower, at 6%.

http://www.sciencedirect.com/science/article/pii/S0160252709...

What's in a title? Imagine if you could come out of a computer science or design course with "Master of...[domain]" appended to your name.

The grandiouse title giving should probably be reigned in.

The MBA seems to attract a certain type of person, which is my point.

I'm an MEng myself but I don't see that type of person around the whole engineering scene.

I'm on my way to being a MASTER OF SCIENCE for my computer degree... Doctor Strange better look out...

You don't need to imagine; just look at any MSc or MEng.

There does seem to be a lot of own goals going on at Microsoft at the moment. But then again, some of the "talent" that has left is still making those own-goals.

Stephen Elop went to Nokia, and instead of using the one thing that I believe could have competed in the market - Maemo and then Meego - was dropped in favour of Microsoft's operating system. That's an own goal, if ever I've seen one.

So IMO, it's not really just Balmer who is at fault here, there seems to have been quite a lot of problems with even the executives leaving the company.

> instead of using the one thing that I believe could have competed in the market - Maemo and then Meego

I owned an N900 and I liked it, because it had a full terminal and could run a Debian desktop on it if I really wanted to, but normal people don't care about any of that.

If Nokia had stuck with Maemo and Meego they would be in the same position as they are now, except their "ecosystem" would have less apps, less Microsoft-marketing dollars behind it, and Nokia wouldn't be getting $250 million cheques from Microsoft every quarter.

I don't consider tightly coupling Nokia with Microsoft a particularly wise decision.

Aren't those checks essentially rebates on licensing of Microsoft products?

> Stephen Elop went to Nokia, and instead of using the one thing that I believe could have competed in the market - Maemo and then Meego - was dropped in favour of Microsoft's operating system. That's an own goal, if ever I've seen one.

SO because the new CEO adopts an OS that you don't agree with, that's automatically an "own goal"?

Remember the board and top execs at Nokia all were 100% behind the Windows phone switch, otherwise they would have brought in an exec who had a different strategy.

Elop: It's pretty common for a manager who made a splash at X with A to move to Y and impose A.

i was with you until you didn't say Android. they really should have picked Android and done what Samsung has done.

Ballmer probably knows it's his last executive position he'll ever get in this industry. So he's squeezing as much out of it as he can. Or he's just a fanboy of the "old Microsoft."

His net worth is $15.7 billion[1] so I doubt he's concerned about "squeezing as much out of it as he can".

[1]http://en.wikipedia.org/wiki/Steve_Ballmer

Good point, but on the other hand rich people have a weird habit of trying to get even richer. I'm not saying it's wrong btw.

It's the same drive that everyone has, to progress in their life. They see the money as a way to count up all their successes. Not an unheard of algorithm. Not my personal one but not unusual.

Ballmer is so rich and so old, he couldn't event spend it if he wanted to. This is really unlikely. Have you seen his office, it's not about the money.

It's an ego thing.

Edit: http://www.huffingtonpost.com/huff-wires/20121009/us-executi...

    > it's not about the money. It's an ego thing.

The two things are not always mutually exclusive. Society generally associates money with success. Thus money is the benchmark for ones ego.

Not just with CEOs as either. I often read online comments from warring zealots who proclaim "I get paid a i to do this stuff!", as if it somehow validates their claims.

Ballmer probably knows it's his last executive position he'll ever get in this industry. So he's squeezing as much out of it as he can.

You think he fears the high price of COBRA insurance maybe http://blog.seattlepi.com/microsoft/2011/03/11/steve-ballmer... ? Virtually any type of a job after MSFT, unless he was passionate about it (NBA team President for example) would be seen as a downgrade. Love them or hate them ...MS is minting cash and will continue to do so for a long time http://www.wikinvest.com/stock/Microsoft_%28MSFT%29/Data/Gro...

In a parallel universe: Gates returns, fires Ballmer and turns MS around. Reality: He's probably happier solving much bigger problems in the world.

But still, it sucks to see someone drive his company to the ground. Has Ballmer ever done anything right for Microsoft? I can't think of anything.

He's kept the ship afloat and is good at maximizing profits from MS's traditional businesses. The problem is that Ballmer isn't the person you need in a transitional phase for a company.

Gates was that guy.

Remember when they haven't shipped a web browser in Windows 95 and then they turned around and produced a kickass browser that killed Netscape Navigator? Or how MS Word took marketshare from WordPerfect like taking candy from a baby? Or how Win 95 won against IBM's OS/2, even though OS/2 was also binary compatible with DOS and Win3.11?

Gates used to be that guy. He doesn't care anymore. He's involved in something greater than even what MS was. Under current conditions, I'm not even sure that Gates could even do what he once did but he would drive a shot into the company and the perception of it.

There's no question Gates was as much of a skilled tactician more than a coder (which he was great at when he did it) but, while I'm sure he still loves MS, he is a man in the real world looking for a cause to drive him. MS is in the past.

I can't blame him. A good woman changes you and that's what Melinda did.

Ah, the MS OS/2 2.0 fiasco: http://yuhongbao.blogspot.ca/2012/12/about-ms-os2-20-fiasco-...

"Turns MS around" into what? Failure?

Microsoft seems like a successful company to me. I don't get it.

I hope he doesn't come back, and he keeps working for his foundation. What he is doing is much more important than a single for-profit company

I may be wrong, but I always had the impression on Ballmer as a weird (in a bad sense weird) and inadequate guy. I also usually give credit to him for all ”WTF MS?” moments.

Is Microsoft the last big company? They had to grow to that size to handle the marketing and distribution globally - their most obvious successor is Google who operate at a similar reach but something like 1/10 of people

It might be an inevitability - or it might be that giant companies are just of their time and giant will now be in the thousands not the hundreds of thousands

Anyway it's not news.

> Is Microsoft the last big company? They had to grow to that size to handle the marketing and distribution globally - their most obvious successor is Google who operate at a similar reach but something like 1/10 of people

Er... Google has about half MSFT's employees, Apple and Amazon have about 75%, Intel has slightly more employees than MSFT. And they're not huge companies in terms of employees headcount: retail groups are in the multiple hundred thousands (Walmart 2m, Tesco and Carrefour 500k), Automotive groups are also up there (VW 500k, Toyota 300k, GM and Daimler >250k), etc...

There are many companies that are much larger than Microsoft in terms of number of employees. Microsoft employs 94,420 people worldwide [1], but by this measure it isn't even in the top 100 of the Inc 5000 according to [2].

[1] http://www.microsoft.com/en-us/news/inside_ms.aspx#Employmen...

[2] http://www.inc.com/inc5000/list/top/employee-count

Probably worth looking at the Fortune Global 500 to see lists of really large companies:

http://en.wikipedia.org/wiki/Fortune_Global_500

e.g. Walmart has 2.2 million employees

Intel has more than 100k employees.

Interestingly enough, Larry Page is on record recently talking about the possibility of Google scaling up to a million employees:

http://www.sfgate.com/technology/businessinsider/article/Lar...

... and thus causing massive destabilization in whole economies. No thanks!

Think about it. If a corporation employs 1 million employees, and that company fails, then the economy will most definitely take a hit. On top of this, that company would hold far too much power and could use the power of the number of people working for it to force governments into doing things that it wouldn't do for the greater good. It happens already now with big business, but just imagine what it would be like with a million employee business!

Wal-Mart has over two million employees. What would you propose to do about this? Given that it didn't get to that point overnight, one might suspect that it grew because of its success, rather than it being any kind of threat (it is a threat to its competitors, to be sure).

I'm not sure I particularly consider Walmart to be a particularly positive influence in the U.S. economy...

I understand that. Retail jobs don't tend to be high-salaried positions, with superior benefits packages. They're not the six-figure jobs we read about here on HN all the time, with catered meals and other embroidery. Nonetheless, the company needs people to fill those jobs, and finds them.

Is there some kind of intervention that you'd advocate that wouldn't devastate the company?

You are sort of missing the point a little. Walmart frequently causes market imbalances with its massive buying power, forcing suppliers to make extremely low profit margins. A good deal of manufacturing went to China from the U.S. due to Walmart's practices. That's really not good for the U.S. economy.

On top of this, I'm not really sure I care if Walmart does fail. What I'm saying is that if it does, then that single participant will have suddenly massively increased unemployment simply by no longer being a going concern. Again, that's not healthy for an economy. Many smaller or medium sized players would probably be a healthier thing for the U.S. economy.

A good deal of manufacturing went to China from the U.S. due to Walmart's practices. That's really not good for the U.S. economy.

In a vacuum, no, but how can you be sure that the aggregate value of cheaper retail goods for Walmart's shoppers wasn't better for the U.S. economy?

And it's not as if U.S. manufacturing output has shrunk. It's still the greatest in the world, though obviously we're not making as many consumer goods as 20 or 30 years ago.

Many smaller or medium sized players would probably be a healthier thing for the U.S. economy.

There are at least half a dozen smaller or medium size competitors for Walmart shoppers' dollars. Take a look at the performance of Costco vs. Walmart, for example. The former has competed exceedingly well by playing the game very differently in some respects, while also being smart and efficient in a way that much of the pre-Walmart retail landscape wasn't.

Walmart plays the same game that its competition plays, it just plays it better. I am sure that if it were not them, we'd be talking about some other Big Retailer doing these things, some of which are indeed rotten. And there are definitely some concerns to be had for the amount of power that China, specifically, has via its economy. Not being an economic nationalist (and I'm in Canada), I tend to take it case-by-case.

Banks got retarded amounts of taxpayer money because of "too big to fail"

I don't think the banks got bailed out because of the impact of their employees suddenly being out of work, but because of the huge impact of not having a functioning banking sector would have on the wider economy and society in general.

You would probably lose more than just a few banks if they didn't get some sort of money. The financial markets need confidence to survive as well.

I appreciate you illustrating my point.

Microsoft is much more diversified than Google. If Google becomes as diversified as MS then there is a good chance they will catch up on head count.

MS is about a quarter the size of IBM in terms of employees.

Never happened before in any other company.

"They don't need this guy on stage with this fierce, aggressive look" ...yeah i bet Paul Allen would second that.

Kempin is of dubious character:

<http://www.theregister.co.uk/2000/07/04/ms_execs_hunting_tri...;

Whoops broken linky:

http://www.theregister.co.uk/2000/07/04/ms_execs_hunting_tri...

Well duh. Find one CEO of any Fortune 500 company who does not.

I think this is hillarious, Ballmers best moments. http://youtu.be/e8M6S8EKbnU

CEOs hardly matter in big corporations . I don't see hiring a 35-40 yr old CEO moving Microsoft in a new direction.

http://www.forbes.com/sites/giovannirodriguez/2012/08/15/do-...

http://money.cnn.com/2006/10/20/magazines/fortune/stats_CEO_...

for the down votters

That site is awful. Almost all links are broken.

M$ is a festering money hub of individuals with indy goals reeking to create beyond the bounds.

You know, that would make a brilliant Haiku...

  Microsoft

  A festering money hub
  individuals with indy goals
  reeking to create beyond bounds

Of course, I could be rubbish at Haikus.

Goddammit. I accidentally pressed the uparrow on this noise and there's no way of undoing it. Damn that is a big flaw in this software.

Careful now! You wouldn't want to get caught thinking bad thoughts about HN and get hellbanned to the cornfield! Happy thoughts!

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