The retirement of Steve Ballmer has got me thinking about the balance of a founding team.

Over the 12 years or so since Ballmer took over from Bill Gates as Microsoft’s CEO their share price has decreased by around 40%. The company was worth $400bn in 2000 and today is worth less then $300bn. And this is all during a period of transformational change and growth in the IT industry with companies like Google, Apple and Amazon enjoying fantastic success.

Prior to taking over as CEO Ballmer had been Bill Gates’ right hand man. As far as I know, he was responsible for sales, marketing, client services and pretty much all ‘market facing’ activities. Together they built the most valuable business on the planet.

So what went wrong? My thinking is that a leadership team at the very top of a company needs a ‘visionary’ or long-term thinker working alongside a ‘doer’ who is more operationally minded and just gets shit done. This is why Gates and Ballmer worked so well together.

As soon as Ballmer took over I believe the writing was on the wall. The on-going operations of the business remained solid and reliable. Ballmer did a great job driving sales and profits from the products they already had. But he completely missed the train on mobile, cloud computing, search and other services. These trends were reshaping the IT industry. But they required a longer-term thinker to understand that. Especially when you have one of the most powerful and profitable product franchises in history to attend to.

This graphic (taken from Benedict Evans blog) nicely captures the huge changes in the PC/devices market that Ballmer failed to appreciate or act on:

I think any company can learn from this. You need to have someone thinking well beyond the day to day operations of the business. This person generally needs to have a technology background and a natural instinct for where the future is heading. But you also need someone who is making things happen in the short to medium term. Someone who is thinking about individual steps rather than the destination.

And both these people need to be at the highest level of the company where they have a voice at the top table. You want to see a healthy tension between these voices rather than one entirely subservient to the other.

It seems simple but my experience is that the majority of companies do not have this in place and are therefore reducing their chances of success.