Apple and Microsoft got CEO Succession Wrong, says HBR

gettyimages-522860906-compressorIn a provocative piece published Thursday, the Harvard Business Review argues that Microsoft erred when it replaced Bill Gates with Steve Ballmer, and, that Apple looks to have made a similar mistake.

Gates and Jobs were both visionary leaders who tended to surround themselves with world-class operating executives who helped them execute on their ideas. But what both companies may have really needed when each departed was another visionary to keep them ahead of the curve.

“If the purpose of the company is its long-term survival, then one could make the argument that he was a failure as CEO, as he optimized short-term gains by squandering long-term opportunities.”

In his 14 years at the helm of Microsoft, Ballmer tripled Microsoft’s sales and doubled its profits by consolidating the success of its existing software products such as Office, while launching the Xbox and acquiring Skype and Yammer.

But he also failed to understand the next big five technology trends: search, smartphones, digital media, mobile operating systems and the cloud.

“If the purpose of the company is its long-term survival, then one could make the argument that he was a failure as CEO, as he optimized short-term gains by squandering long-term opportunities,” HBR’s Steve Blank writes in the article, which can be viewed in full here.

Apple’s situation looks eerily similar. Since Cook took the reins in 2011, Apple has doubled its revenue and profits, but the only new product it has released has been the watch.

Cook would no doubt disagree: on a recent visit to Japan he said iPhone technology is only in its infancy, while the company presses on with the development of enhanced artificial intelligence features. Google and Amazon, however, are playing in the same space.

“The dilemma facing the boards at Microsoft, Apple or any other board on the departure of an innovative CEO is: Do you search for another innovator, promote one of the executors, or go deeper down the organization to find an innovator?” Blank writes.

“For long-term survival in markets that change rapidly, one is far more important than the other.”

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