Ford to Microsoft: Can Mulally make the transition?

by Sohini Bagchi    Sep 30, 2013

alan mulallyford

Last month, when Microsoft CEO Steve Ballmer announced his exit from the company, analysts and industry experts were keen on anticipating ‘who would be the next CEO of Microsoft’? Perhaps they have got an answer to their queries. The software giant itself may also heave a sigh of relief, with sources reporting that Alan Mulally, Ford’s CEO, is likely to become the leading candidate to run Microsoft.

However, for some in the industry, it is a bit of a shock. The immediate question that follows is – Is Mulally, a 68-year-old non-tech executive, the right choice as CEO for a tech company like Microsoft? Prior to running Ford, Mulally was the chief executive of Boeing’s commercial airplanes division. In fact, he started his career with Boeing right after his graduation, and spent nearly four decades in the company.

Others believe, Mulally can be the answer to what exactly Microsoft needs at this point in time. There are reasons for some analysts to consider Mulally for the top slot.

The right fit?

Even though Mulally’s lack of expertise in the tech industry has caused some apprehensions in the business circle, Mulaly is known to be one of the most highly respected CEOs in the industry today. Brian Johnson, a Barclay analyst told The Wall Street Journal, “Alan has fundamentally transformed Ford both in simplifying its brand portfolio and developing a system that coherently exploits scale while generating interesting, exciting product.”

Experts have also observed that Mulally is known to be a more transparent decision-maker and it was under his leadership that Ford became the only US-based auto company that did not go for a bailout. Instead, Mulally restructured the company through private markets.

Analysts like Johnson believe that this is exactly the kind of ‘energy’ Microsoft needs to become more relevant in the business world today.

Mulally an old pal

At a time, when Microsoft was going through an internal crisis and there was a greater need for collaboration, Ballmer realigned the company for greater efficiency and for this premeditated strategy, he consulted with Mulally.

Some of the reorganization plans worked out effectively, even though rivals such as Apple and Samsung started to get more innovative taking over a greater share in Internet connected devices market, an area where Microsoft faltered eventually. As a report stated in 2009, Microsoft controlled nearly70% of all Internet-connected computing devices. By 2013, it was down to 24%. As Android, and Apple’s iOS became dominant forces, Microsoft got less relevant.

It would be unfair to compare the technology market with the auto market and when Mulaly joins the tech major, it is expected that he would focus on the business of technology with efficiency. 

Moreover, Microsoft has already come up with a refreshed plan for its future. Although Windows Phone, Windows 8, and the Surface tablet, came as a mixed bag, analysts believe they are still in the right direction. As a San Francisco Chronicle report state:  “Mulally, with a fresh set of eyes, can help Microsoft get back on track…”

Sources state he is already aware of Microsoft’s way of working as he helped the company restructure, this changeover probably would not be very difficult. 

Mulally vs. Others

Although many believe the non-tech CEO Mulally may not be a perfect candidate for the role, but a closer look at the other contenders reveal that others also have their set of flaws, and in fact, more when compared to the Ford Chief. For example, Stephen Elop, who is rejoining Microsoft from Nokia and also a top contestant for the post, but has got a lot of flak as a job hopper. Skype’s Tony Bates, as some thought as a top choice also does not have the experience to run a massive company like Microsoft? That leaves one with Mulally as a deserving candidate.

Insiders state that Mulally may lack tech skills but he’s an engineer by training. Moreover technology companies are also going through a transition. The focus is on innovation, just the way Apple and Samsung are surging ahead. As for Mulally, he had already transformation once from planes to cars and falls in the category of being ‘the most innovative CEOs’. So investors believe, another transition to the world of technology should not be ruled out.