In what I view as to not be a surprising development but a disappointing one for Microsoft shareholders, Ford (F) CEO Alan Mulally has announced that he won’t be taking the CEO position at Microsoft (MSFT). Mulally could have come in with a fresh set of eyes and ideas to help Microsoft compete more effectively in this vicious and constantly changing technological business environment. Microsoft has lacked financial discipline and I believe that the company could really benefit from a better capital allocator taking the position. The COO or CIO can head the actual technology parts but Microsoft needs to demand better returns in how it is spending money both through R&D and acquisitions. The company needs to move up the value chain in a similar way in which IBM has done over the last decade. This might mean divesting businesses such as Bing to focus on areas where Microsoft has competitive advantages. I’m sure that the fact that Bill Gates and Steve Ballmer are still on the board and are having a big impact on the hiring process didn’t help the chances of landing Mulally. I understand Gates being involved as the founder but honestly Ballmer has done enough damage at this point and is too boisterous of a presence in my opinion to be productive at this stage of the game.