Mark Ritson: Three contenders boot up for Microsoft prize

If you thought the tidal wave of speculation and analysis that engulfed Microsoft last month with the announcement that long-term chief executive Steve Ballmer was stepping down had ended, think again.

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There is growing debate about who should and who will become the CEO of one of the world’s biggest brands. Ballmer’s resignation left very few clues as to who would take over the mantle and Microsoft has repeatedly refused to even confirm who it is considering for the role. There now appear to be three established options.

First there is the anointed one. We’ve seen two major announcements at Microsoft in recent weeks. First that Ballmer would step down and second that the company would acquire Nokia’s handset business. The timing of these two announcements has led many to believe that former Nokia CEO, and soon to be Microsoft vice-president, Stephen Elop will assume the position in the next 12 months.

Elop has several key advantages. The Canadian has extensive experience of Microsoft, having run the business division of the company prior to his tenure at Nokia. He also has experience of being a CEO – at Nokia, thanks to his three years in the role in Finland. He gained significant plaudits for his “burning platform” memo which assessed Nokia’s perilous strategic situation in 2010 and impelled the organisation to change in order to survive. On paper, at least, he is the obvious choice.

But Elop’s case is looking increasingly unlikely for several key reasons. First, despite running Nokia for almost three years the results during his tenure were spectacularly bad, with the company’s market capitalisation dropping by some £16bn during that time. Equally damaging has been the nature of his switch back from Nokia to Microsoft. There was already ill feeling among shareholders and Finns (who see the Nokia brand as their most important national asset) that Elop was parachuted in to arrange the fire sale of the handset business to Microsoft. That tension only grew last month when Elop was paid a £16m severance deal for stepping down as CEO at Nokia. Despite pressure from both the Finnish government and Nokia’s chairman, Elop has apparently resisted requests to forgo some of this fee, citing his imminent divorce settlement. It might be a short-term cash win for Elop but it increasingly looks as if his actions will eliminate his chances of taking the top post at Microsoft.

On to candidate number two – the outsider. Whispers began a few weeks ago that Alan Mulally the feted CEO of Ford was being considered by the Microsoft board. At first sight the 68-year-old engineer would seem a big stretch for a tech company. He spent most of his career at Boeing and then more recently in automotive at Ford. His age alone would usually eliminate him from consideration and there has been speculation at Ford that he would soon retire from his role.

Look again at Mulally, however, and there is much to recommend him. First he is a turnaround specialist. When Mulally joined Ford in 2006, the company was on its knees. It was losing billions of pounds, had a gigantic portfolio of ill-organised brands and was seen as a corporate has-been. Mulally’s emphasis on simple strategy, brand rationalisation and a constant focus on the consumer turned Ford around in a remarkably short period of time.

It’s clear why Microsoft would be interested in him: he has a consistent record of success and he has fixed broken companies. But is Mulally interested in Microsoft? This is the week we might find out. According to Bloomberg, Ford’s executives are meeting this week in Michigan to discuss Mulally’s long-term plans and are aware that he is very much in the frame for the Microsoft job.

Which only leaves our third and most intriguing candidate: the founder. On Monday, the New York Times sensationally suggested that Bill Gates might be throwing his hat back into the ring for his old company. Despite repeated denials, there is a fervent hope among many Microsoft old-timers that Gates will return to run the business. The myth of the founder returning to save the business they built is an enduring one. More to the point, it often works. Recent history at brands like Starbucks, Dell and, of course, Apple suggests that founders often have the intrinsic expertise to save the day.

But whoever emerges victorious, they have one hell of a job ahead of them.

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