Being a celebrity CEO was tough role for Microsoft’s Ballmer to play

Contributing writerSeptember 1, 2013 

Quick quiz: Earlier this year Weyerhaeuser named a new chief executive. Name him.

Extra credit: Name his predecessor.

It’s no knock on either gentleman (they being Doyle Simons and Dan Fulton, to save yourself the trouble of cheating by looking it up on the Internet) to say that, other than those who work for the company or follow the forest products industry, most people wouldn’t have been able to recall the names or, if presented the names and asked their significance, wouldn’t have correctly identified their corporate affiliation.

Nor is it a commentary on the size or significance of Weyerhaeuser, which is still a big company ($7.1 billion in revenue last year). As significant as Boeing is to the region, for as many employees as it has locally and for as much talk as there’s been about the future of the company, the name Jim McNerney likely wouldn’t register with many.

It’s not a function of locality either. You could ask the man and woman on the street who runs such venerable, well-known regionally based companies as Alaska Airlines, Washington Federal (the largest financial institution based in the state) or Paccar and respondents would likely draw a blank (we won’t throw Nordstrom in there because you could guess it’s someone with the surname Nordstrom and be right).

And it’s not a commentary on the business awareness of the public. As crucial as many CEOs believe themselves to be to the existence of their companies, most people go through their lives without the need or desire to know the names of the executives running the companies they do business with and whose products and services they buy and use. To the extent they track business news, it’s to follow those stories that affect them directly, such as the price of gasoline or home prices.

Which brings us to the interesting case of Steve Ballmer, the current but not-for-much-longer chief executive of Microsoft.

Ballmer, you may have heard, has recently and somewhat abruptly discovered a desire to retire in the next year; his successor hasn’t been named. At this point it’s not even clear whether the next CEO will come from inside or outside the company.

Mysteries abound, such as how much encouragement Ballmer needed to jump or whether he was outright pushed, and what was the most significant motivating factor — the moribund stock price, pressure from investors, disappointing acquisitions and product launches, the company’s laggard market position in operating systems for tablets and mobile phones, the role of founder and still-chairman Bill Gates in the decision.

So here’s one more to add to the list. How much did Ballmer’s role, abilities or deficiencies as a celebrity CEO contribute to the premature ending of his tenure?

For decades, corporate CEOs were neither seen nor heard beyond the business press (which was far more limited in scope of readership), as blandly interchangeable as the suits they wore. That suited the CEOs well enough; no attention meant no one was especially mad at them at the moment.

There were exceptions, but the real shift came in the 1980s with Lee Iacocca as not just the chief executive but the highly visible spokesman for Chrysler. He was on TV commercials. He wrote a book. And when Chrysler recovered financially, he got much of the credit

Concurrent with the Iacocca saga was the rise of the highly visible tech mogul, people such as Steve Jobs and Bill Gates who were the public faces of the companies they built. People started paying attention to the formerly anonymous, faceless executives running big companies, and by extension running the American economy.

The Northwest produced its own celebrity CEOs beyond Gates – Howard Schultz at Starbucks, Jeff Bezos at Amazon, even Jim Sinegal at Costco.

The celebrity didn’t extend just from bigness but from success and growth, and that’s the pitfall of being a celebrity CEO — if you garner the credit when the company is doing well, you also get tagged when the company is struggling. Washington Mutual deliberately cultivated the image of Kerry Killinger as a celebrity CEO banker, which worked as long as profits and the stock price were growing. When they weren’t, he became the lightning rod for investors’ thunderous wrath to such an extent the somnolent board finally woke up long enough to give him the boot (too late, as it turned out).

Is that fair? CEOs, be they caretakers or dynamic leaders, reclusive or celebrity, set the strategies and the internal tone for the companies they run. The outsized compensation they receive is supposed to balance the responsibility they assume for success or failure. The fame and fortune that come along with celebrity CEO status also brings outsized attention to the record that executive has accumulated.

Ballmer may not have had celebrity status as one of his goals, but it was his nonetheless, since he followed one of the biggest celebrity CEOs in American business history and ran a huge company in an industry that leans heavily toward creating public names out of its corporate leaders. He certainly didn’t shy away from the role as spokesman and cheerleader for his company. On some of the metrics such as revenue and profit growth, Ballmer’s record is very good. But in the end Ballmer’s high public profile served to highlight and amplify shortcomings his critics were all too happy to document.

The next Microsoft CEO will have a lot of work to do. In choosing the man or woman to take on those tasks, the selection team and the board will also have to decide if they want someone who can be Microsoft’s public face and chief advocate, or if this time around they’d prefer someone who occupies his or her time on internal matters, leaving the speeches, books, political campaigns, interviews with headline-making quotes and the other trappings of corporate stardom to others.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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