What does Microsoft need to reorganize?

microsoftThe new motto of Microsoft? “One Microsoft all of the time.”

Recently, Steve Balmer revealed the reorganization plan whose goal was to return Microsoft to the top and propel them into the future. The plan was to move away from product groups and toward more functional groups. This ideally allows the company to get product teams and the various technologies to depend on one another instead of existing in their own little fiefdom. The hope is that they can move more efficiently and reach Microsoft’s vision of being a complete company, having the devices, software and services that people depend upon.

Microsoft built its structure around individual products, or suites of products. Each of those groups were independent in many ways. Microsoft corporate would provide the corporate infrastructure: hardware, marketing, finance, facilities for each group but each group was almost independent of the other groups.

In some ways this was good: many of Microsoft’s packages are dominant in their industries. It also causes problems as well.

Separate product teams tend to form islands, as Ballmer described them. They were isolated and didn’t keep up with what was going on in other groups.

As a result, each group developed their own little kingdom.

The problem with mini-kingdoms in Microsoft’s world is that one kingdom always win. That kingdom is Windows. Microsoft’s core product is its Windows suite of operating systems. Everyone in Microsoft needs Windows. Windows needs no one. And since Windows is the core of its product line, it gets the attention and resources it needs.

Microsoft is slow. Their time to market is notoriously long. In their press release, it noted that one of their key values is being “nimble.” Microsoft goes on to say that “in a world of continuous services, the timeframe for product releases, customer interaction and competitive response is dramatically shorter. […] Each employee must be able to solve problems more quickly and with more real-time data than in the past.” In other words, we have to be faster because everything and everyone is moving at a faster pace.

So what is their main problem? Culture. Can it be fixed? That’s still up in the air. But in the next post, I’ll talk about what it will take, and the current success rate of organizational transitions.