Why Steve Ballmer Should Resign

Remind me again why Steve Ballmer is CEO of Microsoft? He's got no vision, no charisma, no engineering cred and no outside experience running a company. Ballmer himself admits to not being good at negotiating. And now his deal-making and decision-making skills are being questioned. (Plus, he looks like an 80s-era "Spider Woman" comic book villain and is more famous among Microsoft customers and detractors alike for his "Dance Monkeyboy" videos than his achievements as CEO of Microsoft.)

Ballmer even made Business 2.0 Magazine's 2006 list of "10 People Who Don't Matter" -- quite a feat for the CEO of the world's largest software company.

Ballmer's only work experience before joining Microsoft in 1980 was as an assistant product manager at Procter & Gamble for two years. He headed various divisions at Microsoft for two decades before being named CEO in 2000. It was understood at the time, however, that founder, Chairman and former CEO Bill Gates was still actually running the company. This year -- 2008 -- is the first time in his life Ballmer has run any company all by himself.

The Yahoo Thing

Ballmer’s failed Yahoo acquisition was designed as a $47.5 billion fix for Microsoft's failed Web strategy. Ballmer has said that he likes Microsoft’s strategy but doesn’t like its position – #3. But the relative “positions” of Google, Yahoo and Microsoft are the direct result of their respective strategies. Microsoft shareholders shouldn’t like Microsoft’s Web strategy.

When Yahoo rejected Microsoft’s offer, Ballmer chose to neither increase the bid nor go hostile. He wimped out and walked away. The failure of the Yahoo deal shows weakness on the part of Ballmer. He talks tough, but when actual toughness is required he backs down.

One executive who left Microsoft for Google claimed that Ballmer's response to his defection included a tantrum punctuated by the claim that he (Ballmer) is "going to $#@!ing kill Google!" Nobody was surprised by the tantrum. The trouble is that Ballmer is not, in fact, going to $#@!ing kill Google. He just says he will.

Microsoft needs the opposite of a tough-talking wimp as CEO. Microsoft needs a sweet-talking killer, one who charms rather than intimidates, then pulls the trigger when required.

The Vision Thing

Steve Ballmer's net worth last year ($15 billion) was far more than Google CEO Eric Schmidt's ($6.2 billion) and Apple CEO Steve Jobs' ($5.7 billion) combined! Is that disparity justified given the degree to which each CEO has realized the potential of their respective companies?

The product visions of Google and Apple are so clear and strong you can "feel" them when using their products. This is why customers leave Microsoft and choose Google and Apple.

Microsoft doesn’t get the “vision thing,” which isn’t necessarily fatal. But in lieu of vision, the Microsoft’s CEO needs some other quality beyond skill with numbers and bombastic blowups – something that affects products. Bill Gates, for example, had the “technology thing.”

In order to stop bleeding market share to Google and Apple, Microsoft needs a leader obsessed with product quality. Ballmer’s Microsoft is all about acquisitions, and reorganizations and alliances and strategies. Building products customers love is a secondary concern. That needs to change. But can the Microsoft board do anything about it?

Continued: The Governance Thing