CEO Leadership Analyses: Larry Page and Steve Ballmer - Assignment Example

? CEO Leadership Analyses: Larry Page and Steve Ballmer AFFILIATION: CEO Leadership Analyses: Larry Page and Steve Ballmer Introduction One of the irrefutable laws of teamwork, according to Maxwell (2007), is to develop its leaders. An organization that uses its resources to recruit good people and to help them develop into good leaders reaps the reward for years to come. This paper will focus on the leadership qualities of two renowned CEOs, Larry Page and Steve Ballmer, and compare and contrast their leadership styles. The following section provides insight into their CEO profile. CEO Profiles CEO Name Larry Page Steve Ballmer CEO Company Google Microsoft Years as CEO of Company 1 year 12 years Named CEO in April, 2011 Named CEO and President in January, 2000 Promoted from within: Was Co-Founder of Google Inc, President of Products at Google Inc and Assistant Secretary Promoted from within: Served as a business manager and supervised numerous Microsoft divisions CEO Compensation Data on CEO compensation is unavailable since he has been CEO for less than a year Total Annual Compensation (2010): $1,786 Received $1.38 million in 2011 - 2% increase in compensation from previous year ($1.35 million) Salary (Compensation for 2010): $1.00 Bonus: - Stock awards: - Ownership of Google: Stock owned= $15,773.4 million Salary: $682,500 Bonus: $685,500 No stock awards or option awards in 2011 Ownership of Microsoft: Stock owned= $8,264.7 million Stock Price When Hired $591.80 USD $53.91 Current $621.13 USD $32.85 Challenges/Initiatives Larry Page Ever since Page took control as the CEO of Google, there have been a number of changes made at Google. Page revamped the management structure at Google. The purpose for doing so is grounded in reforming decision-making processes and improving the efficiency of the company. Page and his fellow managerial colleagues at Google were cognizant of the approach Google was headed towards over the past few years. They feared that as the company progressed, it would become a victim to a bureaucratic system of leadership and management. Since progress and growth are naturally favored towards the development of a bureaucratic system, Page decided to revise many of the strategies followed by the company. This includes hiring 6000 more employees and clarifying their boundaries and responsibilities, giving more authority to subgroups for more efficient process execution, improving teamwork and coordination. He brought together experts from different specialties such as head of Android operations, YouTube and counter-strategist of Facebook to discuss their integration points and how to make processes faster (Sterling, 2011). Page has been able to successfully deal with the initiative, as represented by the positive responses that he hasreceived (Sterling, 2012). Another initiative that Page took was research on which Google operations were yielding profits. It remains a hallmark of his few months’ career as CEO that he introduced 20 new initiatives including the launch of a social network, Google Plus, along with Google TV and Google Wallet. Moreover, he closed operations such as Google Buzz and Google Health. The generated revenues are representative of the success of these endeavors. Third quarter of 2011 showed more than a 33% increase since the previous year’s third quarter. Seeing a huge potential in warding off legal issues, Page also acquired Motorola Mobility- a step that is of benefit to the company since it is already getting involved in several legal issues such as anti-trust regulations (Case Comp, 2012). Thereby, Page seems to do well at this initiative too owing to his ability to foresee the risks the company is likely to be exposed to. Steve Ballmer Ever since Ballmer held the CEO office, he has been engaged not only in polishing the image of the company but also in resolving a number of legal issues. However, Ballmer was seen to digress from these objectives when he made his users pay the maintenance fee for licensing 6.0 (Lee & Fan, 2011). After one of the Vice Presidents made a very emotional speech on feeling ashamed at this policy, Ballmer, instead of getting angry contacted Bill Gates who gave a motivational speech, explicating the philosophy of the company and justification for the policy (Lee, 2011). Given the fact that on its introduction, it was only able to garner the attention of 30% of its current customers, and its popularity remained low because of several reasons, Ballmer started to revise the policy. He appeased the cost concerns for most of the customers and drafted reasonable licensing paths for others (Rooney, Darrow, & Darrow, 2002). Ballmer admits that introduction of licensing 6.0 was a mistake. However, he dealt with the issue and instead of backing out and rolling up; he listened to people’s queries and took steps to satisfy them. Ballmer was able to rise up to the challenge that he faced with the introduction of the policy highlighting his leadership qualities. Recently, the company has faced several challenges that have made stakeholders question if Ballmer should remain CEO. The criticism being leveled against Ballmer resides in the inability of the company to get rid of a bureaucratic setup. Further concerns regarding the company include the intense internal competition between its departments and little autonomy for engineers. Microsoft is also considered to be caught up in the innovator’s dilemma and has not produced products that have yielded profits as much as Apple’s has (Seeking Alpha, 2011). Given these issues, a number of stakeholders are starting to feel that Ballmer should be replaced. When confronted with the rumors of being removed from the position of CEO, Ballmer brushed them off, reiterating his passion and resolve for the company. He asserted that Windows was the key driver of Microsoft’s profits and is the most pertinent to its success. He expressed his deep commitment to Windows, and remarked that sanguinity and perseverance would make the company succeed (Cook, 2011). As of now, Ballmer is still the CEO of Microsoft and he has the support of his board of directors. Moreover, majority of the analysts and investors are of the perspective that it would be a challenge to find someone equivalent or better than him (Warren, 2011). Thus, in this perspective, Ballmer has been able to wither off the criticisms well enough since he still has the support of 92% of shareholders (Warren, 2011). Leadership Style Larry Page follows a transformational leadership model. The model is typically representative of a style whereby the leader has interaction with his or her employees and works for increasing their morale. The process works both ways. Page is seen to fit this model because he is charismatic, and interacts with his employees individually. Such leaders initially take time to understand the culture of the organization, and subsequently modifying the structure to achieve the aim of the organization (Chen, 2008). Page demonstrates his strengths as a transformational leader when he communicates and instills work philosophy in his employees and gives them room to adapt as well as by restructuring the organizational setup. At Google, Larry Page provides its engineers with significant autonomy to develop products, motivating them to focus on the objectives of the organization (Seeking Alpha, 2011). The organization follows an innovation model that is balanced and the power is equally distributed to the engineers and higher members of the management, highlighting that a participative approach to leadership is followed as well. At Google, managerial decisions are not enforced authoritatively. Instead, production and decision-making encompasses a flat hierarchal setup (Agenda, 2012). He can further improve his leadership qualities by addressing the motivational state of employees in the context of Maslow’s need hierarchy (Chen, 2008). This is in direct contrast to the leadership style of Microsoft’s CEO. Ballmer follows a directive style of leadership. The style is characteristic of the leader taking decisions himself and expecting his followers to comply with them. The leader focuses on the accomplishment of the objectives and takes steps to remove any hindrances. However, such leaders often use an autocratic style of leadership, as has been the case for Ballmer. As a result of which, there has been a decline in his popularity amongst his employees. In a survey carried out in 2011, less than 50% of the employees favored him whereas the larger majority was not satisfied with his performance (Warren, 2011). The bureaucratic setup of the company also hinders growth and innovation. Ballmer has taken an aggressive attitude towards his employees, expecting high performance from them. In order to improve his leadership, Ballmer needs to tone down his autocratic tendencies. He needs to be engaged in a style that focuses on increasing motivation levels among employees and giving them more autonomy. Summing up, Page is a better CEO than Ballmer is. Page’s decision to intervene in the managerial structure of the company and to prevent it from becoming bureaucratic reflects his efforts to retain the traits and qualities of the organization; an element that Ballmer has failed to give much attention. He has also encouraged innovation and given his employees more autonomy and motivation. Page’s efforts have made numerous aspects of the company comprehensible. It is largely this quality, amongst many others, that Investor’s Business Daily newspaper has dubbed Larry Page as the CEO of the Year (Sterling, 2012). Conclusion It is pertinent for a leader to analyze the work environment and culture of the business and act accordingly. Higher motivation levels and greater subordinate autonomy has been seen to translate into higher returns, as is the case for Page. Therefore, it is important for a leader to employ a participative approach with his or her subordinates and to communicate and instill awareness of the organization and its work philosophy in them. References Agenda, T. G. (2012). Growth Champions: The Battle for Sustained Innovation Leadership. West Sussex: John Wiley and Sons. Case Comp. (2012). The Case. Retrieved from http://smgworld.bu.edu/casecomp2012/case/. Chen, X. (2008). The relationship between manager's leadership style and employee job satisfaction in selected Beijing computer software companies. ProQuest. Cook, J. (2011). Audio: Microsoft’s Ballmer gives a bellowing response to calls for his dismissal. Retrieved from http://www.geekwire.com/2011/steve-ballmer. Fontana, J. (2 Sep 2002). Throwing curves. Network World, 19(35), 58. Fontana, J. (4 Aug 2003). Linux Marches On. Network World, 20(31), 14-16. Lee, K. (2011). CHAPTER 9. VOICELESS IN SEATTLE. Retrieved from http://kaifulee.diandian.com/post/2011-11-28/7230829. Lee, K., & Fan, H. (2011). Making a World of Difference. Kaifu Lee. Maxwell, J. (2007). Ultimate Leadership: 21 Irrefutable Laws, Developing the Leader Within You, 17 Indisputable Laws of Teamwork. Tennessee: Thomas Nelson Inc. Rooney, P., Darrow, B., & Darrow, R. (2002). CRN Interview: Steve Ballmer, CEO, Microsoft. Retrieved from http://www.crn.com/news/channel-programs/18828573/i-crn-i-interview-steve-ballmer-ceo-microsoft.htm;jsessionid=Qz1L6-FgZZhK7Jn1gA1m6w**.ecappj02. Seeking Alpha. (2011). The One Reason To Avoid Microsoft Now And When To Know It's A Buy. Retrieved from http://seekingalpha.com/article/316451-the-one-reason-to-avoid-microsoft-now-and-when-to-know-it-s-a-buy. Sterling, G. (2011). Larry Page And The Reinvention Of “The Google”. Retrieved from http://searchengineland.com/larry-page-and-the-reinvention-of-the-google-62605. Sterling, G. (2012). Larry Page “CEO Of The Year” — Investors Business Daily. Retrieved from http://searchengineland.com/larry-page-ceo-of-the-year-investors-business-daily-106263. Warren, T. (2011). Shareholder support for Steve Ballmer drops slightly in 2011. Retrieved from http://www.winrumors.com/shareholder-support-for-steve-ballmer-drops-slightly-in-2011/. Read More