Steve Ballmer Goes to College: On Campus With Stanford's New Professor
The public knows only one version of Steve Ballmer: the blustery salesman, sweating and booming away and trying to rally Microsoft employees or win over investors. It’s not our fault that we think of Ballmer in this way; it’s his. He put on so many of these performances that he turned into a caricature. Yet, when you hear Ballmer reflect on his cheerleader persona, you know the public image of the man is incomplete.
“What’s the old existentialist saying?” he asks me while we talk in a small office at the Stanford Graduate School of Business. “A man is the sum total of his actions. Even back through high school, when we first started to study this, I began to really believe it. This wasn’t ‘I think therefore I am,’ like the Cartesians. You’re accountable for what you do. You’re not accountable for what you thought. You’re not accountable for what you recommended. You’re accountable for what you actually got done.”
“So, you know,” Ballmer continued, “would I do some of those things, if I could, back? Would I run around quite as silly as I used to? Probably not. Some of that is age. But I’m not embarrassed by it. I stand up and say, ‘Hey, it was part of what was important.’ It’s the way I felt. It’s part of what was important for my job. No, I stand behind it.”
The truth is that Ballmer is a thoughtful man who operates not in one mode but four or five modes. Most of us oscillate among different flavors of our personalities, depending on the situation. Ballmer, I think, has more extreme shifts.
There’s the bombastic guy everyone knows: He’s the Ballmer now running the Los Angeles Clippers, the guy we profiled in this week’s cover story. Then there’s the man in the Stanford office–much more on him below–who paces around and tugs at the window shade chain and pokes me in the shoulder and makes wild gestures, all while speaking in mostly measured tones. That Ballmer showed up at a lot of Microsoft meetings. There’s also the guy at the steakhouse who is calm, analytical, fun to talk to, and deft at hopping from subject to subject. And, of late, there’s Professor Ballmer, more self-aware than people would imagine and contemplating his future with the same vigor his students bring to mulling theirs.
Professor Ballmer shows up on Tuesday and Thursday mornings to teach 80 or so MBA hopefuls. His class, Leading Organizations, runs two hours to covers topics ranging from accountability to time allocation. I popped in recently for a class dubbed “storytelling,” which mostly hit on the thinking that went into marketing products at Microsoft—and whether or not the various approaches worked. Ballmer teaches the class with Susan Athey, a well-regarded economics professor, and they were joined on this day by Mark Penn, the pollster and political strategist who has done work for the Clintons, Tony Blair, and Microsoft.
The kids in the class serve as a reminder of everything Ballmer got wrong during his 14-year run as chief executive officer of Microsoft. Most of them use Macs and iPhones, Gmail and Google Docs. They’re direct about what they think Microsoft messed up over the years. One student critiqued the recent roll-out of the Xbox One, saying that Microsoft failed to cater well sufficiently to its core gamer base. A number of students panned Microsoft’s initial Surface ad–the clicky one–and said the company messed up by not making it clear that the computer could run tried-and-true applications such as Excel and PowerPoint. None of this rattled Ballmer. He seemed to enjoy being challenged. He conceded that the students were right on most accounts.
Professor Ballmer conceded a lot. He tried to paint a picture of the ebbs and flows that come with managing a massive organization and emphasized that he didn’t succeed or fail by chance. Lots of thinking went into everything. Of particular note: Microsoft became “preoccupied” by the threat of Linux years ago, to the company’s detriment. “It didn’t end up being the broadside we expected,” he said. As for Apple, Ballmer wished he could go back in time and run a counter-offensive to the “I’m a Mac” campaign. “In 20-20 hindsight–poosh!–we should have pounded away,” he said. And he wished Microsoft had figured out how to fetishize seemingly trivial features in new products the way Apple does. “They take something like fingerprint swiping and make it seem like the most important thing on the planet,” he said. “I’m in admiration of that.” He pointed to the pen on Microsoft’s Surface Pro 3 computers and said the company needed to find a way to make it seem crucial.
A few months ago, Baller cried his eyes out during a goodbye event with Microsoft employees. No person will ever care about Microsoft as much as Ballmer, and it seemed he would really struggle letting go. During the class, though, the relief in his voice was obvious. Ballmer has been set free of Bill Gates’s shadow and Microsoft. He’s off the company board and running a basketball team … in Los Angeles … and it’s fun.
Free Ballmer could now admit out loud that Microsoft was a big ole monopoly and that this worked well for it. “For years that was our great strength: We had the strongest company story,” Ballmer said. Every product that Microsoft released was made stronger simply by people believing “these are the smartest guys around, these guys are the hardest working, these guys are the toughest competitors.” A monopoly? Well: “That helps float a lot of boats,” he said.
Sticking to the storytelling theme, Ballmer then explained how a couple of product flops turned Microsoft’s narrative on its head. The company whiffed on a new version of Windows and then whiffed on mobile. “What happened then? The model shifted to something where we didn’t have a piece of success,” he said. “Chinks in the armor appear. Now you have to reconstruct what the company means and how it dovetails with the products.” Ballmer then uttered something that I never expected to hear. “If you want to tell a new story about Microsoft, you need leaders that are not Bill or I,” he said. Many people would argue that Ballmer and Microsoft’s board came to this conclusion far too late.
Back in Ballmer’s office after class, there’s the guy who is trying to figure out what he wants to do with the rest of his life and his billions of dollars. Owning the Clippers is very nice, but it’s not enough. One of Ballmer’s friends has a daughter who is enrolled at Stanford. She’s taking a class on education policy and the history of school reform and she sent Ballmer the course’s reading list. “I’ve been reading the books,” Ballmer says. “Then there is another guy who teaches an overall public finance course—a professor here named Keith Hennessey, who was in the Bush administration. I have been reading his curriculum materials. I found this website, too, and I think it’s really cool. If you want to understand government taxation and government spending, the best thing is this website, which turns out to be done by this lone wolf in Seattle. I love this guy. His name is Christopher Chantrill.”
Ballmer pulls up the USgovernmentspending.com website on his Surface tablet and gets downright giddy as he pokes at the screen and hops from one batch of statistics to the next. “OK, there is federal,” he begins.
“There’s state. There’s local spending. There’s transfers. That’s the total amount that gets spent on pensions, including government pensions plus Social Security. There is the total amount that gets spent on health care, education, defense. Social welfare is only $0.5 trillion out of $6.6 trillion spent. That shocked me—shocked me! You want to drill down on taxes? He’s got another site where you can drill in on the revenue side. You know, I find it pretty damn neat. You want to see what the pension spend is? Boom!, he lets you. Income taxes are only $2.1 trillion. Would you have guessed that. I’ll show you some things which will blow your mind.
“How did I not know that state and local raises almost as much money as the federal government, yet the federal government is the one that’s always in the newspaper? How did I not know the expression that everybody in D.C. knows, that what we really are is a—they would say we’re an insurance company with an army. How would I know that even if we could get Social Security to pay for itself, Social Security at best will pay for two-thirds of what it takes to live in 10 years? How did I not know that 50 percent of Americans have zero savings? Did you know that?”
This goes on for a while, and Ballmer explains that in addition to the websites, he’s hitting up one Stanford professor after another and mining them for information. His teaching partner, Athey, has been setting up dinners and coming away amazed as Ballmer grills experts in a number of fields, often managing to stump them. This is all part of a quest that Ballmer doesn’t fully understand yet. He doesn’t want to go into government, but he wants to perfect it somehow.
“I’m a centrist,” he says. “I’m not trying to have a doctrine or an opinion. But the fact is that there is not a coherent theory that the government seems to be working on. What is our value proposition as a government? Are we trying to give people consistency and coherence? Are we trying to give you a high stock market in the short run so things look good and people spend money and then it crashes? I’m not saying we shouldn’t help people in the short run, but how do you balance the help in the short run vs. what it does in terms of getting stability, that lets people invest for their own savings, and how much is that personal responsibility.
“Try this. If you have an employee, what you would talk to the employee about is: Here is what I pay you. You would actually show them. Here are the benefits you get. Here is the health-care benefit. Citizen—if you had to talk to a citizen and say, ‘Citizen, these are the benefits you got last year from the government,’ do you think most citizens know what they get?”
Some of the inspiration for Ballmer’s new quest came during a visit to Oxford and a tour there of the Bodleian Library, which dates back to the 14th century. As the story goes, the English diplomat Thomas Bodley wanted to improve the library near the end of the 16th century and declared to the chancellor that he was the man for the job, saying, “To put a library together that is deserving, you need a man with some time, some intelligence, a network, and some money.” As Ballmer says now: “He found his civic calling, and I was moved by that. I am 58 and I’ve got some time, some money, a network, and some intelligence. I just don’t know how to make a difference.”