Microsoft Reorg More About Culture, Operations

Microsoft CEO Steve Ballmer

Microsoft CEO

It’s no surprise the massive Microsoft reorg was announced yesterday. Microsoft Corp. has been steadily telegraphing for weeks sweeping changes were coming that would result in a more streamlined, collaborative organization.

Sure enough, the memo by CEO Steve Ballmer outlined just that. The company is realigning itself around three pillars: “Focusing the whole company on a single strategy, improving our capability in all disciplines and engineering/technology areas, and working together with more collaboration and agility around our common goals.”

Despite critiques, these are not hollow words. The Microsoft reorg is proof a business plan, operational alignment and outcome-based goals are critical to success. It’s not just a lesson Microsoft is learning, it’s something other vendors have already gone through and all solution providers can study to see how it can apply to their businesses.

Ballmer writes about how Windows, , Xbox, Surface, , Skype, Azure and other products (except Dynamics) will be integrated into a single operational framework to instill greater collaboration and productivity.

“All parts of the company will contribute to activating high-value experiences for our customers,” he writes.

This is a far cry from ’ famed memo, the 1995 “Internet Tidal Wave,” which got Microsoft working on the Internet Explorer browser, or his 2001 “Trustworthy Computing Initiative,” which got the company realigned to clean up vulnerable code and reduce attacks that exploited its applications. No, those were about technology.

While Ballmer writes at length about technology development and engineering excellence, his memo is replete with language on the need for changing the corporate culture to make operations more nimble, communicative, collaborative, decisive and motivated.

If there was ever an organization that needed more internal communication and collaboration, it’s Microsoft.

Microsoft is a giant. With more than 97,000 employees, operations in virtually every country in the world and more than 600,000 technology and go-to-market partners, it’s literally a hydra often in conflict with itself. A great example of this is Microsoft’s late entry to the tablet market, and how it could have beaten Apple and prevented the iPad from becoming a juggernaut.

In 2010, Microsoft had a revolutionary tablet called “Courier,” a two-screen, bi-fold device that had a touch-screen interface and a stylus for easier navigation. It was developed by the Xbox group and ran a modified version of Windows. But it wasn’t the only tablet experiment; the Windows group, under the direction of Steven Sinofsky, was developing a tablet that would take two more years to get to market.

Courier was truly revolutionary and potentially superior to Apple’s iPad. It never got off the bench because of internal conflict. Sinofsky and the Windows group worried about releasing a product not reliant on the core . Ballmer made the call; Courier was shelved.

The episode is indicative of the Microsoft corporate culture. To spur innovation, Microsoft long-ago created a meritocracy, in which different teams competed to get their applications and code into different releases. On paper, this system ensures the best of the best will get to market. In reality, it created bloated applications and stymied innovations. Moreover, it’s created competition and disjointed go-to-market strategies across the Microsoft spectrum.

It’s easy to think only big companies like Microsoft have this problem. Not true. Even the smallest of companies can suffer from communication issues, lack of direction and internal strife. The goal of every business owner and management team should be to set organizational goals and expectations, minimize internal conflict, ensure end-to-end transparency in operations and provide rewards based on outcomes.

It will take a lot to turn a ship like Microsoft, and there will be disruptions in the process. But Microsoft should be commended for more than just taking this step; it’s now serving as a role model for how every business should break down the walls that prevent true productivity and innovation.

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