How Microsoft’s Global Search Ended at Home

microsoftWith the announcement of Satya Nadella as its new chief executiveMicrosoft‘s global search for a new leader ended in its own backyard.

During the five month long search, the board was said to have courted candidates including Ford Motor Co. chief Alan Mulally and former Nokia Corp. leader Stephen Elop before tapping Nadella, a popular executive who started at Microsoft in 1992 and leads the division that makes technology to run corporate computer servers and other back-end technology.

When Nadella’s predecessor, Steve Ballmer, announced he was stepping down last year, he told The Wall Street Journal that the company needed profound changes, and he was not the executive to make them. Although companies often go outside for transformative leaders, by picking Nadella, board members are signaling that they believe an insider is up to the job.

More often than not, a company’s next CEO is already working there. In 2012, the last full year for which data is available, 73 percent of S&P 500 companies with outgoing CEOs selected an internal candidate as successor. This continued a slight downward trend – as recently as 2008, according to the research, 83 percent of companies chose to promote from within.

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Bill George

Bill George is professor of management practice at Harvard Business School, where he has taught leadership since 2004, and the former chairman and chief executive officer of Medtronic. He is the author of four best-selling books: 7 Lessons for Leading in Crisis, True North, Finding Your True North, and Authentic Leadership. With co-author Doug Baker he recently published True North Groups. Visit Bill online at http://www.billgeorge.org

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