Microsoft's Latest Reorganization Won't Work Without Culture Change

By Wayne Rash  |  Posted 2013-07-14 Print this article Print

That's especially true in the business world where hardware replacement budgets have suffered greatly at the hands of the worst economic downturn since the Great Depression.

Of course, people don't just resist having change forced on them by Microsoft. As Apple is finding out from the shrinking market share of the iPhone, they don't appreciate being told what they want by Apple either.

And that's the key factor. The IT market is mature now. There is too much competition; the computers are extremely powerful; and there is more corporate money at stake than ever. IT companies can't just decree what the market wants or tell their customers that it's time to buy a new operating system or even a new PC. Customers have to come to their own conclusions that they're being offered something they need and want. The days of major operating system upgrades are over forever. One of Microsoft's biggest slipups was that it didn't know this in time.

But of course, some of this lack of knowledge is due to a previous purge by Microsoft. A couple of years ago Microsoft had a shake-up of its marketing department and in the process decimated that department's work force. It's worth noting that it's the marketing team that figures out what customers want so that products and strategies can be molded accordingly. While Microsoft will never tell us whether or not it's the loss of so many of its marketing experts at that time that brought about the poor marketing decisions that led to Windows 8, it's likely it had something to do with it.

And therein lies the problem. Reassigning people might be good if you don't also lose the expertise and creativity they brought to their current jobs. But wholesale corporation reorganizations run the risk that the meat may be trimmed instead of the fat. When that happens, nobody wins.

That is especially true for maturing companies such as Microsoft that are struggling to discover some formula for success that will allow them to catch up with the competition that has overtaken them in their core markets.

And unfortunately, it's usually hard to tell whether a reorganization has worked until years later, when it's too late to do much about it. That is unless the reorganization serendipitously results in a rapid change in fortunes in terms of innovative new products and rapid sales growth. But those are rare outcomes.

Adding to that difficulty is that managers must be given the authority to get performance from their organizations and be held accountable for the results. At Microsoft, as in the case of many large companies, real accountability is hard to come by.

Worse, if you reassign managers frequently, as has been the case at Microsoft for years, accountability at the middle level vanishes. Instead, managers and their staff never get to see if their plans work out, and if they don't, they're also never held accountable for that.

While Microsoft's reorganization might be a good thing, without internal controls that actually work and decisive business results, it'll be impossible to tell for sure.


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel