Preface

What we got here is . . . failure to communicate.

—Captain, Road Prison 36, Cool Hand Luke

On February 4, 2014, Microsoft concluded its extensive search to replace its retiring Chief Executive Officer (CEO), the easily excitable Steve Ballmer. On that day, the company named Satya Nadella as only the third CEO in its storied history. Given Microsoft’s stature and reach, one could argue that Nadella represented the most significant executive appointment since Tim Cook succeeded Steve Jobs as Apple’s head honcho on August 24, 2011.

Running a 50,000-employee corporation as powerful and culturally significant as Apple cannot be considered easy. In the whole scheme of things, though, few, if any, CEOs have inherited a company in better shape than Tim Cook did. He took over an extremely healthy organization with a record-setting hoard of cash,a a reportedly strong pipeline, a vibrant developer community, a favorable public image, and largely positive coverage from Wall Street.

The 46-year-old Nadella was not nearly as lucky. He had then and—has now—no small chore ahead of him. Many industry types, critics, ex-Microsoft employees, and activist investors have argued for years that the iconic tech company needs a drastic makeover. Ballmer’s exit was just the first of many notable moves that it would need to make to remain relevant.

Long a tech powerhouse, Microsoft now finds itself at a crossroads, a potential victim of The Innovator’s Dilemma, Clayton Christensen’s classic business ...

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