One Microsoft: Company realigns to enable innovation at greater speed, efficiency – that is the name of the press release formalizing the expected revamp of the software and hardware giant.
This has been rumored for some time now and is made official with an email from Microsoft CEO Steve Ballmer to the companies employees.
This company has always had a big vision — to help people realize their full potential. In the earliest days, it was by putting a PC on every desk and in every home. We’ve come farther than we could have imagined. The impact we have collectively made on the world is undeniable, and I am inspired when talented new hires say they chose Microsoft because they want to change the world — that’s what we do today, and that’s what we’ll do tomorrow.
According to the reorganization memo the company will focus on what they are labeling their critical competitive assets:
- A business model based on partner and first-party devices with both consumer and enterprise services
- Optimization for activities people value most
- A family of devices powered by a service-enabled shell
- Design for enterprise extensibility and enterprise needs
Here is how the new organization will layout, who will lead that division and their expected focus:
- Operating Systems Engineering Group. Terry Myerson will lead this group, and it will span all our OS work for console, to mobile device, to PC, to back-end systems. The core cloud services for the operating system will be in this group.
- Devices and Studios Engineering Group. Julie Larson-Green will lead this group and will have all hardware development and supply chain from the smallest to the largest devices we build. Julie will also take responsibility for our studios experiences including all games, music, video and other entertainment.
- Applications and Services Engineering Group. Qi Lu will lead broad applications and services core technologies in productivity, communication, search and other information categories.
- Cloud and Enterprise Engineering Group. Satya Nadella will lead development of our back-end technologies like datacenter, database and our specific technologies for enterprise IT scenarios and development tools. He will lead datacenter development, construction and operation.
- Dynamics. Kirill Tatarinov will continue to run Dynamics as is, but his product leaders will dotted line report to Qi Lu, his marketing leader will dotted line report to Tami Reller and his sales leader will dotted line report to the COO group.
- Advanced Strategy and Research Group. Eric Rudder will lead Research, Trustworthy Computing, teams focused on the intersection of technology and policy, and will drive our cross-company looks at key new technology trends.
- Marketing Group. Tami Reller will lead all marketing with the field relationship as is today. Mark Penn will take a broad view of marketing strategy and will lead with Tami the newly centralized advertising and media functions.
- COO. Kevin Turner will continue leading our worldwide sales, field marketing, services, support, and stores as well as IT, licensing and commercial operations.
- Business Development and Evangelism Group. Tony Bates will focus on key partnerships especially our innovation partners (OEMs, silicon vendors, key developers, Yahoo, Nokia, etc.) and our broad work on evangelism and developer outreach. DPE, Corporate Strategy and the business development efforts formerly in the BGs will become part of this new group. OEM will remain in SMSG with Kevin Turner with a dotted line to Tony who will work closely with Nick Parker on key OEM relationships.
- Finance Group. Amy Hood will centralize all product group finance organizations. SMSG finance, which is geographically diffuse, will report to Kevin Turner with a dotted line to Amy.
- Legal and Group Corporate Affairs Group. Brad Smith will continue as General Counsel with responsibility for the company’s legal and corporate affairs and will map his team to the new organization.
- HR Group. Lisa Brummel will lead Human Resources and map her team to the new organization.
Communications and cross team functionality will be critical in this new setup. For example operating systems and and hardware being handled by two different teams that means there has to be a strong cross division/team communication otherwise everyone will be in their own rice bowls doing their own thing. This would be disastrous to say the least.
However, it seems Ballmer is aware of how critical communicating across the business is and he addresses that and how he intends to deal with it later in the email:
Process wise, each major initiative of the company (product or high-value scenario) will have a team that spans groups to ensure we succeed against our goals. Our strategy will drive what initiatives we agree and commit to at my staff meetings. Most disciplines and product groups will have a core that delivers key technology or services and then a piece that lines up with the initiatives. Each major initiative will have a champion who will be a direct report to me or one of my direct reports. The champion will organize to drive a cross-company team for success, but my whole staff will have commitment to the initiative’s success.
Now I wish Microsoft nothing but success in this new way forward but I am also here to say it will not be easy.
While I was on active duty in the Navy we went through similar efforts to communicate more across the organization and in our commands but it was challenging. Despite the training we did in W. Edwards Deming’s methods of process improvement it was tough to learn new habits.
The leadership at at Microsoft must eat, live and breathe this new philosophy so that those they lead will see the example and exercise it as well.
I also recommend that they take a look at Deming’s Seven Deadly Diseases for an idea of where some of the challenges will be for them:
- Lack of constancy of purpose
- Emphasis on short-term profits
- Evaluation by performance, merit rating, or annual review of performance
- Mobility of management
- Running a company on visible figures alone
- Excessive medical costs
- Excessive costs of warranty, fueled by lawyers who work for contingency fees
One of Deming’s great quotes is “The worker is not the problem. The problem is at the top! Management!”
Bottom Line: This effort succeeds or fails on the shoulders of management.