Better to Quit While You’re Ahead // Leadership Lessons from Microsoft’s Steve Ballmer

If you are the CEO of a large public company and the news of your exit causes your company’s market cap to swell by $24 billion on the morning of this announcement, you’ve made the right call.

On 23-Aug-2013, Microsoft’s shares gained 8.9% in pre-market trading when the company announced that Chief Executive Officer Steve Ballmer would retire within the next twelve months. During Ballmer’s 13-year tenure as CEO, Microsoft continued its dominance over the traditional segments of computing, but could not grasp changing consumer preferences. Despite stellar profitability, strategic missteps have forced Microsoft to play catch-up as Apple, Google, and other competitors dominated the new world of mobile devices, social media, search, and internet advertising.

In interviews with Wall Street Journal, Ballmer admitted: “Maybe I’m an emblem of an old era, and I have to move on … As much as I love everything about what I’m doing, the best way for Microsoft to enter a new era is a new leader who will accelerate change.”

Successful professionals know when to make the move: While they are ahead

There is a time limit to success at any leadership position. If a leader is any good, after the initial rush of process improvements, business turnarounds, organizational transformations, and program initiations, familiarity sets into his job. At that point, diminishing returns set in: established routines, processes, and employee networks take over the execution of the change the leader might have initiated.

There is a natural cycle of rapid growth and sustenance to most leadership roles. Stay as long as you need to establish direction, put your ideas into action, and institute the momentum of change. Then, undertake new challenges in your existing job or explore new career opportunities. Plan ahead—the right opportunity may not emerge quickly.

Don’t Hang on

Another lesson from the imminent transition at Microsoft: when you find yourself in trouble and can’t seem to make an impact despite persistent attempts at change, do not wait to get the push. It may be difficult to let go, but don’t hang on.