I’m not going to have a lot to say on the reorg for a few days as I want to let it sink in. Besides, my analysis in the previous two (pre-announce) blog entries hit pretty close to home. But I have to say my first reaction is “Wow!”
For the twenty years that I’ve been paying attention to Microsoft’s structure and management philosophy, often from the inside, it has been focused on product groups. The product groups had both engineering and marketing responsibilities. They were organized around clusters of products that were targeted at particular customer segments. Before that they were organized around two broad groupings, Apps and Systems; A notion whose tentacles continued to influence the product groups through the last decade. Microsoft moved products between groupings, moved the groupings around, shifted responsibilities between the product marketing and field subsidiary marketing groups, and made other modest (sometimes significant) changes. The 2005 reorg was the most dramatic I’d witnessed but retained the essentials other than creating President’s with greater authority over far more independent business units (nee, product groups).
From where Microsoft has been the last twenty years there are three directions one could have taken. The first would be to break up the company, a direction I don’t believe the leadership has ever given serious consideration except under duress (i.e., when it looked like the courts might force it). The second would be to shuffle things around once again to refocus the company, but maintain the basic philosophical underpinnings of product groups. The third would be to swing completely away from the idea of independent customer-segment focused product groups to a single integrated company. One could look at the 2005 reorg and see it on a path to the next step being breaking up the company. Well, for this reorg they went in the opposite direction. In fact, pretty much as far in the opposite direction as is possible.
This reorg is a risky proposition. Microsoft’s leadership knows how to navigate a product group-focused world. Much more modest changes, such as when marketing programs responsibility were moved from the product groups to the field subsidiaries (e.g., Germany) took over a year to figure out how to actually make them work smoothly. So conceptually the reorg is brilliant. In practice it could lead to some very painful ball-dropping mistakes in its first year.
Besides the structure itself I want to point out how much of a refresh of the senior leadership has taken place the last few years. Terry and Julie are long-time Microsoft veterans who have only recently broken into the top-tier of the management structure. Qi and Tony were external hires who came in at the top-tier, Tony very recently as part of the Skype acquisition. Tami is at this point a veteran of the company, but again is new blood at the Senior Leadership Team (SLT) level. Satya is another long-time veteran who is still relatively new at the SLT level. I left Microsoft at the end of 2010, and almost the entire SLT has turned over since my departure.
I’m pretty excited about the new SLT. It’s new blood, new dynamics, lots of experience both internally and externally. Some of the leaders are proven in roles of the scope they have, while others are stepping up to the next level in their career development and have a lot to prove. All will be challenged by the radically new (for Microsoft) structure. It’s going to be fun to watch.
As far as the engineering leaders go let me give one personal vote of confidence. If I were still at Microsoft I’d happily work for any of them.