Report: Microsoft Investors Pushing Ford's Mulally, CSC's Lawrie As CEO Candidates5:28 PM EST Tue. Sep. 10, 2013
Some of Microsoft's biggest investors want the company to pick a "turnaround expert" to succeed outgoing CEO Steve Ballmer, and Ford CEO Alan Mulally and CSC CEO Mike Lawrie have emerged as candidates, Reuters reported Tuesday.
Mulally has overseen a dramatic turnaround at Ford since joining in 2006, leading the company from a $12.6 billion net loss that year to $6.6 in profit in 2010. He's expected to stay on as Ford CEO until the end of 2014 as part of the company's succession plan.
In 2009, when Mulally was picked for the Time 100 list of the world's most influential people, Ballmer himself wrote the description, noting that Mulally "understands the fundamentals of business success as well as any business leader I know."
Daniel Duffy, CEO of Valley Network Solutions, a Fresno, Calif.-based Microsoft partner, believes Mulally would be "an exceptional fit" for the CEO job at Microsoft. "He's got a proven track record of success, and he's technical," Duffy said in an email.
Some industry watchers think Microsoft will choose a new CEO from outside the company. But if it picks a CEO from outside the technology industry, that might not go over well with employees.
Microsoft's top leadership wants a CEO "who can gain the respect of the engineering teams. They really do not want to accelerate the loss of talent there," a source with knowledge of the matter told CRN last month.
If this is indeed the case, Lawrie might be the more logical pick.
When CSC named Lawrie to succeed retiring CEO Michael Laphen last March, it hired executive search firm Heidrick & Struggles, which is helping Microsoft's special board committee look for Ballmer's replacement.
Lawrie also spent a year as a general partner at ValueAct Capital, the activist investor upon which Microsoft has seen fit to bestow a seat on its board of directors, presumably to avoid a messy proxy fight.
Lawrie started his career at IBM in 1977, and spent 27 years there, working for many years with John Thompson, CEO of Virtual Instruments and lead director of the special committee that's been tasked with finding Ballmer's successor.
NEXT: Why Lawrie Would Make Sense
At IBM, Lawrie worked his way up the ranks to senior vice president and group executive of sales, overseeing the company's worldwide sales and distribution efforts. He left in 2004 for a CEO job at Siebel Systems, which at the time was one of IBM's top ISV partners.
This move puzzled many industry watchers, who wondered why Lawrie would leave a top post at IBM to join a struggling company that had seen its market cap drop by some $20 billion in the three years prior to his appointment.
But, Siebel fired Lawrie after less than a year for failing to execute on corporate goals, and the following year he joined U.K. based IT vendor Misys, where he remained until January 2012.
Lawrie joined CSC amid sagging financial results, layoffs and an SEC investigation into its accounting practices.
Since joining, Lawrie has streamlined CSC's management structure and cut the number of vice presidents from around 370 to 75, the Washington Business Journal reported last month.
While some Microsoft investors are likely anxious to see big changes at the top, it's tough to argue that the problems Microsoft is facing are anywhere near as severe as those Mulally and Lawrie have faced.
Microsoft has been hit hard by dwindling PC sales and hasn't managed to stem the bleeding with a coherent mobile device strategy. But, Microsoft has 16 separate billion-dollar businesses, which helped it generate $77.85 billion in revenue and earnings of $2.58 per share in its fiscal 2013.
But in Duffy's view, Microsoft needs a fresh set of eyes at CEO -- he's of mind that a "turnaround CEO" is exactly what Microsoft needs right now.
"If they don't hire some fresh blood, to get a new perspective, they are doomed to mediocrity," he said in an email. "They need someone who can reinvent the company and culture."
PUBLISHED SEPT. 10, 2013