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Microsoft Re-Org: Yay or Nay?
By Alvin Soon - on 15 Jul 2013, 11:45am

Microsoft Re-Org: Yay or Nay?

Microsoft just went through a Steve Ballmer 'One Microsoft' re-org. Now that the internet has had time to chew through the 2,700 word memo, does the new Microsoft get a 'Like' or not?

On Monday Note, Jean-Louis Gassée, writes that Microsoft is skirting around a fundamental issue:

Reshaping the culture of a huge organization (97,000 employees) is a qualitatively and quantitatively different task. Habits of the mind and, even more challenging, of the heart are extremely hard to change. And, certainly, Microsoft’s culture needs an overhaul. It has caused the company to miss or mishandle Search, Social Networks, Advertising, Smartphones, and Tablets, and to make a meal of the latest version of their iconic Windows product. 

Can a reorg suddenly bestow the vision and agility to regain lost ground, undo (at least) one bad decision, and also win the next land grab?

Despite its length, Ballmer’s pronouncement manages to avoid a fundamental question: What happens to Microsoft if PC shipments continue to fall?

And points to a hilarious take by the always funny Joy of Tech:

Image source: Joy of Tech

Ben Thompson, writing at Stratechery, thinks the re-org's a bad idea, and feels the move to a functional structure versus a divisional structure misses the point:

In my (very-biased) opinion, I believe collaboration is fundamentally broken at Microsoft. It is all about politics, not great outcomes, and that is absolute death in a functional organization, which has nothing but collaboration to hold together cross-functional product teams. At least in a divisional model all of the relevant team members have a common product and a common boss, meaning everyone has no choice but to work together. Unless the employee review and compensation model is significantly changed, this, along with the lack of mission and clear accountability, will grind progress to a halt.

Adam Lashinsky, senior editor at Fortune, doesn't seem optimistic either:

The under-appreciated part about how difficult this will be for Ballmer and his team to pull off is that taking a unified structural approach to a massive company requires inordinately good leadership. The Stanford business professor Charles O'Reilly was adamant with me when I was researching my book that the unusual way Jobs ran Apple would only work for him. It works when a dictatorial, feared, charismatic, respected, multi-talented workhorse like Jobs is able to more or less directly oversee every important facet of the company. It also worked for Apple because Jobs ruthlessly insisted on simplicity. He wanted to attack only a few things at a time -- a tremendous virtue for building Apple back from the abyss and for more than a decade after. But the act gets tougher when the company grows gargantuan and, critically, when the all-powerful wizard is gone.

The Verge offers a balanced viewpoint:

What ties all these challenges together is an idea of collaboration. Microsoft has traditionally been structured in a way that rewards individual units for succeeding. This used to work, and the software giant has built up huge individual businesses like Windows, Office, and Server & Tools as a result. But it's also caused infighting, delayed products, and even years of missed opportunities for Microsoft. The company had the Zune, the Kin, the Courier, and countless other devices and services that failed because they didn't get enough support across the organization. If Windows didn't benefit from the Zune, why would it help integrate its services? If Xbox didn't benefit from the Courier, why would it assist in any way? Ballmer and his leadership team need to put away the guns and replace them with open arms.

And also reminds us that Andy Lees was removed from the top of the Windows Phone totem pole:

First off, we're told that although Lees still reports to CEO Steve Ballmer, his ill-defined new role "focused on driving maximum impact in 2012 with Windows Phone and Windows 8" is, in fact, a demotion — the exact phrase that was used with us was that "he's been benched."

Ouch. Maybe Lees could give Don Mattrick or Steven Sinofsky a call?

Finally, Tom Krazit at GigaOm thinks the re-org is a warning shot across the bow of Microsoft's partners:

But what this reorganization makes clear is that Microsoft now thinks it will have to control its own destiny: no longer will it depend on Intel for the computing power, Dell for manufacturing expertise, or HP for marketing heft (and, lest we forget, all of them for its technical support) to get its technologies in front of the public. 

The cozy days of the PC industry are over. Much like Google’s purchase of Motorola put every Android smartphone and tablet maker on notice that one day they’ll probably have to take matters in their own hands, Microsoft’s reorganization reminds a wide variety of partners — from Dell to Nokia — that their longtime patron has decided they are part of the problem, and not part of the solution.

What do you think about the One Microsoft re-org? Yay or nay?

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