Recruiters: Microsoft Should Seek Internal Candidate to Replace Ousted CIO

Stuart Scott had a stellar reputation when Microsoft recruited him in 2005 to be its CIO.

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Scott had survived—and thrived—for 17 years inside GE, a company known for forced ranking even its best managers out of the organization to make room for fresh blood, and for its associations with management discipline and Six Sigma quality process improvements. Scott himself is a Six Sigma black belt and a graduate of GE’s prestigious leadership development program. He was so well respected in the company that GE CIO Gary Reiner welcomed Scott back to the company after his brief stint with Webvan ended with the online grocer’s bankruptcy.

That’s why Reynold Lewke, an executive recruiter with Egon Zehnder International, was shocked when he heard that Microsoft had fired Scott. Lewke says he doesn’t remember ever seeing a statement about an executive termination from Microsoft like the one the company released about Scott.

“I’m surprised that Microsoft would publish that and that something like this would occur because it seems so out of character from everything I’ve ever seen from Stuart,” says Lewke, who has known Scott for seven years.

Given the unusual, unexpected and abrupt public event that Scott’s departure from Microsoft has become, and given the complexity of Microsoft’s organization, the management changes it has been through over the past two years and the strong personalities leading the company, executive recruiters say Microsoft may be best served by looking internally for a successor.

“I’m not at all certain that having an outsider who is not attuned to the history of Microsoft and its issues can come in and effect real change,” says Lewke.

“CIOs these days have to be great salespeople,” says Shawn Banerji, a recruiter with Russell Reynolds Associates. “They have to sell their vision and back it up with results. They have to influence people. That’s a tough thing to do when you come into an organization [as an outsider].” Especially at Microsoft, Banerji adds, which is known for its strong company culture and the strong personalities of its leaders, such as CEO Steve Ballmer, Chief Operating Officer Kevin Turner, research chief Craig Mundie and Ray Ozzie, chief software architect.

“If someone comes from outside, they’ll have to be a terrific listener,” says Banerji. “I don’t think someone could come in from outside and at the outset diagnose the organization.” If they tried to do that, Banerji adds, they’d likely lock horns with the willful members of the senior leadership team and possibly even get kicked out. “I would not short sell the intellect of the key stakeholders for one second,” says Banerji.

What You Need to Be Microsoft’s CIO

Executive recruiters say Microsoft’s next CIO needs to demonstrate excellence in these areas:

1. Interpersonal skills. The ability to listen to stakeholders and work with some very strong personalities.

2. Deep understanding of the complexities of Microsoft’s business and its organizational dynamics.

3. Ability to keep pace with and embrace a rapidly changing technology industry.

Advantages of an Inside CIO Candidate for Microsoft

There are several advantages to hiring an internal candidate. For one, filling the job from within takes a lot less time than conducting an external search. “Even if Microsoft moves at a breakneck pace, the earliest they can announce someone is January,” says Lewke. He recommends that Microsoft’s leadership team take three weeks to define the CIO role, identify what its leaders expect from a CIO, and assess the skill sets of internal candidates—rather than take three to six months to conduct an external search. If the company looks inside its walls for a candidate, he says they could have someone in the CIO role by Christmas.

Another benefit of appointing an existing employee into the CIO role is that he or she will ramp up quickly. An insider who has been accepted by the management team, who knows the power brokers and influencers and knows how to get things done inside the company can hit the ground running. By contrast, it could take an external candidate six months to get the lay of the land at Microsoft, says Lewke.

What’s more, promoting someone could improve the morale of an IT staff feeling disoriented from so much high profile and at times unexpected change. Lewke says Microsoft doesn’t want to create the impression that all of the good jobs get filled with people from outside the company.

“The interim person who’s there now is a very bright lady,” says Lewke, referring to Shahla Aly, a general manager who’s been appointed to share Scott’s responsibilities with corporate vice president Alain Crozier until a full-time successor is found. Lewke says Aly’s an example of the talent inside Microsoft.

Advice for Microsoft CIO Candidates

If Microsoft does consider external candidates, Banerji recommends that those outsiders in the running for the position find out exactly what they’re getting into before they accept the job. He says external candidates will have to identify during the interview cycle who the internal influencers are as well as the specific pain points they’re being brought in to address and where previous leaders have experienced pushback so that they’re not trying to figure these things out when they come on board.

Whether Microsoft hires someone internally or externally, says Banerji, “it’s making a decision that balances what someone from the outside brings in terms of broader been-there-and-done-that experience with someone who doesn’t have that been-there-and-done-that experience but who understands the organizational dynamics and relationships.”