Steve Ballmer was a good CEO, but a terrible leader

The “resignation” of Steve Ballmer comes as no surprise, but it should certainly come as a warning – short-term vision will always erode long-term gains.

Could Ballmer even be considered a bad chief executive? By many respects he improved Microsoft’s balance sheet, and oversaw the creation of entirely new divisions such as Xbox. Along with maintaining existing powerhouses like Windows and Office, Microsoft’s profit under Ballmer has soared.

In 2000, the company had a net profit of $5.8 billion. Just last year, the company had $21 billion in profit, from $77 billion in revenue.

Ballmer has created plenty of value for shareholders. By a pure financial metric, there should be nothing wrong with his performance.

But Ballmer’s tenure at Microsoft is a key lesson in what you should never, ever do as a chief executive – dismiss the long-term vision for the short-term gain.

Shortly after the iPhone was announced, Steve Ballmer was interviewed about Apple’s latest gadget and he was invited to give his response. He said this:

“Right now we’re selling millions and millions and millions of phones a year, Apple is selling zero phones a year.”

In 2012, the iPhone provided Apple with higher revenue than Microsoft’s entire operation. Just five years after it was introduced.

So, was Ballmer a bad CEO? From a financial perspective, you might say he was perfectly adequate. But it’s not what he did that was so terrible, but rather, what he didn’t do – all the opportunities he missed.

In that same interview, Ballmer says the iPhone lacks a keyboard and therefore won’t be adopted by business. He was wrong. Businesses love iPhones and have instead abandoned their BlackBerrys.

This isn’t even about the iPhone or Apple – he’s said similar things about Android . Steve Ballmer turned Microsoft down a dark path because he refused to see innovation when it was placed in front of him, and when he did recognise it, it was altogether too late. 

Being a good leader is about being flexible, being able to recognise change when it’s necessary and then delivering a vision that provides for you and your company not just now, but 10 or 20 years in the future. Because Ballmer failed to do that, you’ll find any number of analysts this week wondering: “Where is Microsoft going now?”

If Steve Ballmer leaving Microsoft can teach us anything, it’s that short-term vision may keep you alive. It may keep you employed, and it may even keep you busy. But it won’t pay off.

Was Steve Ballmer a good CEO? He may very well have been.

But a good leader? Definitely not.