The tech world is in upheaval right now: Steve Jobs is taking a (permanent?) vacation from running Apple (Nasdaq: AAPL) and Eric Schmidt is stepping down as CEO of Google (Nasdaq: GOOG). Nokia (NYSE: NOK) snagged a new leader out of Redmond, and you know all about the game of corporate musical chairs that Mark Hurd and others played around Hewlett-Packard (NYSE: HPQ) and Oracle (Nasdaq: ORCL) last summer. Even little Advanced Micro Devices (NYSE: AMD) is getting in on the action by kicking out the best leader it's had since Jerry Sanders III. There are serious changes going on at the top of some of the largest and most important tech shops in the world.

But the one leadership change that would do the most good is nowhere in sight.

Change where it's needed most
Steve Ballmer is still firmly attached to the throne at Microsoft (Nasdaq: MSFT), and I can't think of a single upheaval that would do more good for shareholders than replacing Ballmer as soon as possible.

Why, pray tell, am I so down on Redmond's anointed leader? Let me count the ways:

  • A great leader should be able to improve the business, but Ballmer's reign has taken Microsoft in the opposite direction. Despite having several cash-cow franchises such as Office and Windows generating massive amounts of income to fund new innovations, Microsoft has lost out on almost all the new technology gold rushes of the past decade.
  • During that span, Microsoft has seen some of its biggest successes (Windows XP) but also plenty of half-baked failures that seemed like rush jobs (Zune, Vista). There was a strong comeback with Windows 7, which actually looks a lot like a Vista service pack, or what Vista should have been to begin with. That only proves my point: Rushing never helps.
  • The company is bleeding talent. It's not because Google or Nokia or anyone else is necessarily looking for Microsoft's finest minds, but because Ballmer is actively getting rid of them. I don't know the complete back stories to the departures of Stephen Elop, Kevin Johnson, J Allard, Robbie Bach, or Bob Muglia, but it's starting to smell like Steve is getting rid of anyone who might question his authority or pose a challenge as a CEO candidate. It's not pretty.
  • All of this might be forgivable if only Ballmer would accept his failures with some humility. But no, the man clearly believes he's a rock star and perhaps invincible. He's known for dismissing serious competitors like Apple and Google, tossing office chairs across the room, and opening keynote speeches with YouTube-worthy chanting and dancing sessions. Would Bill Gates ever be caught dead doing any of these things? How about Steve Jobs? Those guys are rock stars of business and technology, but they don't have to act like it. And ignoring competition is the surest way to get run out of business, as Blockbuster learned the hard way.

Grab the Ballmer by the horns
Ballmer is supposed to be a great salesman, and few Microsofties have been around the company longer than he has. But those qualities aren't enough to make up for rampant arrogance, technical and business blind spots, and a general lack of vision.

I'm not the first Fool to say that Steve Ballmer needs to go, and I have a feeling I won't be the last. But the longer time drags on, the deeper Redmond becomes mired in Ballmer's shortcomings. Whoever might step in to take the reins next will have an increasingly messy and difficult job to clean up the fallout from the past decade (and counting), making it ever more unlikely that an actual suitable successor would feel inclined to meet the challenge.

Bill Gates is still the chairman of Microsoft's board, which ain't stacked with dummies. It would be in their best interest -- and shareholders' -- to make a difficult decision and send Ballmer out to pasture. But will they do it? I'm not holding my breath.

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Fool contributor Anders Bylund owns shares of Google and AMD but holds no other position in any of the companies discussed here. Google and Microsoft are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers choice. Apple is a Motley Fool Stock Advisor recommendation. The Fool has written puts on Apple. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, Microsoft, and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.