Rumours of the impending major Microsoft reorganization have been spreading around the Internet for weeks. One Thursday, 11 July, 2013, the reorganization was officially announced (see here, here and here). There has been a lot of analysis, almost like a Biblical word-parsing, but the raw text deserves some credit. Microsoft is (in)famous for its infighting among groups: server team vs desktop, Windows vs Office, Xbox vs Windows Phone, etc.
Steve Ballmer feels that the current culture, exacerbated by the previous divisional organization, is hampering the company in its attempts to remain relevant in an era of Apple and Android phones and tablets, as well as growing open-source and/or mobile-driven gaming systems.
Along with others, I question if the new organization will work. In some ways, the old organization, competitive as it was, at least kept the individuals focused on products that generated revenue for the company. An engineer in Exchange might fight with a product manager in Windows, but at least each was focused on maximizing their own product. Now, an engineer working on Exchange will fight a product manager for Exchange, since they are in different divisions and reporting structures. The former mode would somewhat hinder both (and very much hinder the company); the new mode might cripple Exchange, and then each one independently.
The question, then, is how Ballmer could have reduced the infighting? I don’t work at Microsoft, never have, so all of this is based on what I have heard from peers who have worked there, my own interactions with them as a consumer and corporate customer, and news reports:
- Stop the Up-or-Out: In theory, Microsoft’s HR insistence that some percentage of employees are rated poor and thus canned or penalized every year gets everyone to be great; in practice, it creates fierce competition among employees in the same group, and encourages the creation of political groupings to cast blame (and hence the “outs”) elsewhere. Unhealthy rivalry between individuals extends to groups, and from groups to divisions.
- Cohesive Strategy: It has been years since Microsoft has had a known and cohesive vision and by extension a strategy. When Microsoft was small and growing, the vision of a “a computer on every desk” unified the company, and the fast growth provided lots of fat to keep everyone happy. Yet for years, Microsoft has tried to be everything to everyone, and seems opportunistic: buy Hotmail, sure; buy Skype, why not; browsers, mobile phone software, mobile phones, tablets, search, social, you name it. And while each of these was rational in the short-term view of the moment – ancillary business opportunities, respond to threats – taken together they have not provided a single coherent vision for the company. No number of reorgs will get employees to work together if they don’t have a common vision of what they are after.
I am sure Ballmer had lots of intellectual horsepower to come up with the new organization, including plenty of highly-paid consultants (personally, unsurprisingly, I prefer small boutique consultants as much more effective). But the organization structure is secondary. It is meant to serve a purpose. Until the strategy and culture are fixed, the organization structure will be largely irrelevant.
As a closing note, I have always liked visualization and mapping to capture complex ideas and bring new insights. That is why I like Osterwalder’s Business Model Canvas and Wardley’s Strategy Mapping. BonkersWorld has a new version of organizational mapping, intended to be humourous, but insightful if used before selecting an organization. Here is the original, and the org map reproduced. A picture is worth a thousand words.