Education

Anatomy of a CEO Failure

Bloggerping / February 15, 2021
Anatomy of a CEO Failure

When Apple is disappointed, I cover the Apple event. One of the most frequently asked questions during its recent developer conference focused on Tim Cook. Was he becoming Steve Ballmer? The implication was that Steve was a failure at Microsoft, so the comparison did not reflect well on Cook.

I think this idea is wrong. Yes, Tim Cook’s position bears some resemblance to Steve Ballmer. However, when Ballmer failed, Cook is succeeding, and I think a lot of this failure is simply a result of overset expectations, and the fact that he never is and never will be Steve Jobs.

Given the similarity in their positions, and the fact that none of the common causes of failure are clear to them – no case, no misuse of company funds, no extra focus on compensation or benefits, industry knowledge.

Lack, no misidentification, and no indication that either man is a fool – why is Tim successful if Steve is not successful? I’ll share some thoughts on that and go a step further by connecting the dots with Microsoft’s Satya Nadella and HP’s Meg Whitman.

I’ll be off with my product of the week: the only wifi extender I’ve actually gotten to work. (It’s kind of a low bar, I know, but it tells you how crap this stuff is.)

Setting the stage

Both Tim Cook and Steve Ballmer lacked the ideal skill set to run their respective companies. Tim’s strengths are more oriented towards logistics and operations, and Steve excels in sales and problem-solving. Both spent most of their time as designated No. 2 in their firms, doing tasks that their bosses did not want to do, which would be a tendency to build the skill sets of those who were the polar opposite of the ones they replaced.

In short, neither man had a great chance of succeeding. Both men took off their butts, put in long hours and were pretty much living their companies, and both felt inferior to their efforts.

Jobs were far more harsh than Gates, and is due to his mistreatment of employees. Gates had a temperament, but he considered Ballmer to be his best friend and should have supported him more as a result.

On the other hand, Jobs had to suffer from early success due to Cook being ill. He apparently set Cook to fail, so that if he could recover, he could replace him. After Jobs died, Cook had no illusions about running the show. Because Gates remained a force in and around Microsoft, people avoided him and often requested that Ballmer be replaced.

Major difference

Cook had to learn that Jobs had set him up to fail, that he could not depend on any help from Jobs, and that people outside the company were betting on him for failing. Also I think Jobs’ abuses put the executive team together, much as an abusive parent would often run siblings together. Cook’s team wraps around him in a protective layer.

For Gates, the environment was aggressively competitive. Given Ballmer’s background, it was clear that many seniors felt that he should have been given a shot at the CEO job. Also, when friends work for friends, they give easy reviews – and Ballmer presumably stepped into the job, realizing that all he had to do was work hard.

So Cook stepped into the job knowing the odds and Jobs were against him, while Ballmer stepped into the job thinking it would not be as difficult.

Cook was armed for the bear – and with Jobs dead, the job was actually easier than he thought it would be. In addition, they had a ton of built-in support. Ballmer accidentally stepped into the job with confidence that it was going to be relatively easy, and the team he wanted was gone.

Even if jobs were equal, Cook had more resources and was focused on the level of warfare, while Ballmer was largely alone – in fact, Gates had more liability than an asset. Thi – and he did not know that he was at war until it was too late to save his job.

In the end, Apple was in far better shape as a company. Granted, Google had emerged as a major competitor, replacing Microsoft, but it was a replacement – not an addition. Ballmer was facing customer satisfaction as a result of focusing more on enterprises and users, and due to an effort to simplify pricing, which was terribly wrong.

Oh, and he was also under an antitrust cloud and was gaining authority in the war with the European Union. His only real personal mistake was trying to buy Yahoo, which was actually killed, but the effort reduced the stock so that it never recovered.

It was the kind of catchy one in which the stock depreciated when the deal was announced, but did not recover when the deal was struck – showing that the market effectively reintroduced the company. It is likely that this was also due to the move from a popular consumer company to an enterprise product provider.

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