Sinofsky Resignation Leaves a Big Hole at Microsoft

Microsoft (NasdaqGS: MSFT) fell 4% on Tuesday after Steven Sinofsky, the head of the company’s Windows division, abruptly resigned.

Sinofsky was a huge presence at the Redmond, Washington-based tech monolith. He joined the company in 1989 as a software engineer. His accomplishments include a significant redesign of the company’s Office suite of programs, but he’s mostly known for his role leading the Windows side of the business.

There, he was widely credited with spearheading the company’s recovery from the bug-riddled Windows Vista. He oversaw the launch of the far more successful Windows 7 and, just three weeks ago, Sinofsky and Microsoft CEO Steve Ballmer launched Windows 8, arguably the most significant refresh the OS has ever seen. In addition, he managed the development of versions of Windows to run on the Microsoft Surface tablet computer, which just hit store shelves last month.

Because of these accomplishments, Sinofsky was often touted as a potential successor to Ballmer.

Quick Exit Could Be an Indicator of Wider Problems at Microsoft

No longer. Not only is Sinofsky gone, but he’s gone immediately—with no transition period and no designated successor at the Windows division (his former duties will be shared by two other executives). That’s unusual in such a high-level resignation, and it prompted speculation of a wider rift at Microsoft.

“Something went down in Redmond, and it went down quick,” wrote InformationWeek editor-at-large Paul MacDougall. “Otherwise, the company, in deference to customers, shareholders and its own employees, would have announced a more gradual transition atop its most important business unit.”

The swiftness of the move could also be an indicator that Microsoft is unhappy with the early response to Windows 8, but that’s harder to fathom, given that it has only been out for a few weeks—although Ballmer has described Microsoft Surface sales as off to a “modest start.”

Sinofsky’s departure could also keep the stock under pressure, at least in the near term, until the leadership of the division—as well as the progress of Windows 8 and the Surface—become clearer.

Microsoft Is Taking a Page From Apple’s Playbook

Much has also been made of the fact that Sinofsky was allegedly hard to work with. His departure comes just days after Apple (NasdaqGS: AAPL) let Scot Forstall, executive VP of the company’s iOS mobile software division, go for similar reasons. Like Sinofsky, Forstall was deemed a CEO-in-waiting, but that apparently all came to an end when he refused to sign Apple’s “apology letter” for the failure of the maps app on the iPhone 5.

Microsoft now seems intent on following in the footsteps of Apple and building not only software but hardware, as well. The Microsoft Surface is likely the first step in this approach; the company is also thought to be developing its own smartphone. A more integrated philosophy will require greater co-operation among Microsoft’s divisions, something the company may have felt Sinofsky wasn’t suitable for.

Visionaries Are Often Tough to Get Along With

Yet the corporate history books are populated by highly effective leaders with abrasive personalities, with Steve Jobs himself a prime example. The former Apple CEO was known for pushing his employees hard and letting them know in no uncertain terms when they failed to meet his lofty expectations. One of these failures came in 2008, when Apple released the MobileMe service for the iPhone, which was supposed to synchronize all of a user’s email in one place.

However, MobileMe had problems syncing with users’ email accounts and frequently lost messages. Jobs reportedly tore into the development team for half an hour. “You’ve tarnished Apple’s reputation,” he told them. “You should hate each other for having let each other down.” He then named a new executive to run MobileMe—right then and there.

Forstall was apparently close to Jobs. After his firing, ex-Apple engineer Michael Lopp called him “the closest approximation of Steve Jobs that Apple had left.”

An example from outside the tech realm is Al Neuharth, the CEO of newspaper conglomerate Gannett (NYSE: GCI) from 1973 to 1986. Neuharth oversaw a period of strong growth at the company; his achievements include launching the company’s flagship paper, USA Today, which he built into the country’s second-largest daily by circulation within four years.

But he, too, had his dark side. Neuharth wrote employees who failed him “love letters” expressing his disappointment. That included one to USA Today president Cathie Black in which he rhetorically asked her: “Don’t you care how often you screw things up?”

Of course, there is no excuse for boorish behavior in the office. Successful companies make sure they have a good blend of personalities, as CNET’s Jim Kerstetter writes: “Apple and Microsoft are now celebrating collaborative types, and I’m all for it. But I hope both companies remember they need to balance the collaborators and the ass-kickers to thrive.”

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