Here’s Why Bill Gates Would Step Down as Chairman of Microsoft
Yesterday, Re/code first reported that Microsoft enterprise head Satya Nadella was the likely choice to be the CEO of the software giant and that a board vote on the new CEO would be made within the week.
That was followed by a confirmation by Bloomberg on Nadella as the choice of the Microsoft board. But its report also included an intriguing bit of news that Microsoft co-founder and tech icon Bill Gates would step down as chairman in favor of the director John Thompson, as part of the changes.
As many know, Thompson, the former CEO of Symantec, has been leading the search effort for a new CEO — which has been a rather messy and noisy circus so far. He has gained a lot of prominence in doing so and also has not been shy about grabbing the spotlight either, making public comments to media, doing blog post update and generally casting himself as a key decision maker in the process.
While that’s true, it is still Gates who has largely driven the search and Nadella has always been his favored candidate.
So what gives in what could be easily construed as a pushing out of perhaps the most famous man in tech from the company he co-founded and dominated for decades? Why now? Is this his choice? Or is it some kind of backroom trade with Thompson to get Nadella in (a popular conspiracy theory inside Microsoft, by the way)?
And, most importantly, what is the benefit of doing so?
There is obviously a lot to unpack here. But, according to a number of sources inside the company, the possible move — it is still not a done deal, although it seems likelier than not — is predicated on the fact that Gates will be spending a lot more time at the company once Nadella is approved. Re/code had previously reported this Bill-is-back notion.
Sources said that Nadella has asked Gates to do so, helping specifically with technology and product problems, and the pair have been scoping out what that would mean and how much time such an arrangement would take.
A lot, apparently, and time is not something Gates has a lot of. Since he left Microsoft, he has been devoting most of this time to philanthropic efforts at the Bill & Melinda Gates Foundation and that, too, still requires his focus.
So what gives? Apparently, the chairmanship of Microsoft.
In the move, Gates — who still owns four percent of the company — would remain a first-among-equals director, but he would shed the myriad of duties of running the board to Thompson.
In a piece in the Wall Street Journal today, an unnamed source — hello, John! — noted that Thompson was not “keen” to take the job and that “directors ‘would have to twist his arm'” to take the role.
As if! Translation: He’s very keen and it is Thompson doing the twisting here by feigning reticence in a major media outlet.
In many ways, the change is still not a bad idea, because Gates has been pretty ill-suited to the tasks of the job. I’ll say it if no one else will — he’s a terrible schmoozer of investors, is not someone who cottons to kissing up to Wall Street and, well, he’s still awkward around the niceties required in such a job. (By the way, this is the part of Gates I like!)
Thompson’s rep with investors is much better, although still not perfect either. But he certainly has the chops to do the job, having been a public company CEO.
Perhaps more significantly, having Gates in the chair seat also maintains some of the dysfunction clearly present in the board, due to his history at Microsoft, his massive wealth from his ownership of the company and — for lack of a better way to say it — the Bill Gates of it all.
That dynamic combined with the continued presence of outgoing CEO Steve Ballmer on the board — who may remain in the short term, but seems set to go when his latest term is up — obviously has to change.
Also not helping: Gates and Ballmer have a complex and difficult interpersonal relationship — imagine anyone in a long-term marriage and you’ll quickly grok what that means — that adds to the board issues.
Thus, a new chairman with a power base away from Microsoft’s origins, while moving Gates to a much more productive role, seems like a pretty good idea to many.
It’s also clear that Nadella will need Gates around to solidify himself with other leaders at Microsoft and to get them on board and into line. And, given Nadella’s nice-guy-but-not-inspiring rep — I have heard him called the “safe bet” and “conventional choice” about 275 times this week — having Gates standing solidly next to him is a must.
Because while some inside say Gates is now out of touch with the fast-moving trends of tech, he still maintains a status among the troops of Microsoft that is, if not god-like, pretty emotionally gripping.
That can only help Nadella. Though he now runs a very big and successful division of Microsoft, where he has worked since 1992, he has never run anything this massive and complex and fraught with so many trapdoors and machinations.
Having a wingman like Gates, then, might be a very good way to start.