For Microsoft, Devil Is in the Details of Company Reorganization

The real work of making a success of Microsoft's biggest reorganization since 2002 will take many days after the band stops playing.

Here's what I've learned from covering big corporate reorganizations and being on both sides of media reorganizations: The real work starts the day after the stump speeches, PowerPoint slides, and salutes to the new bosses and good-byes to the old.

Unless the reorganized employees can answer the question, "What does this mean to me and what are my new business duties and priorities?" a new organization can quickly fall into a morass of business uncertainty and resume (now Linked-In) updating.

Microsoft missed the boat on cloud computing, smartphones, tablets and 99 cent apps, and now CEO Steve Ballmer is in a hurry to catch up. This is not as dire as it might sound. The company also missed graphical user interfaces, office suites and—yes—even the Internet before acknowledging the mistakes and playing big-time catch-up. Microsoft is one of the best catch-up players in the technology game.

The reorganization Microsoft announced on Thursday potentially provides much tighter control on making sure all the varied pieces of the company work and play more efficiently together. In an era when your apps and data exist in the cloud and you access that information on browsers, tablets and smartphones, it makes eminent sense to have all the pieces playing in concert.

Yes, you could say that vision sounds a lot like what Steve Jobs used to champion and what Google has championed for years. However, Microsoft has been a cheerleader for that vision since the days of Windows Everywhere and a PC on every desktop. But where Apple had Jobs to enforce his vision and Google had search as the centralizing function, Microsoft was a loosely allied confederacy of frequently warring states and smart, but often frustrated techies who found catch-up ball an exhausting and somewhat unrewarding game.

In broad outline, the Ballmer memo (actually a series of memos, which really needed an editor's red pencil to cut the fluff and move the news to the top) outlined a functional-based company centered on a "Microsoft One" theme with engineering divided into four buckets.

You might remember when Steve Ballmer reorganized the company in 2002, creating seven groups with the intention of creating somewhat autonomous division heads, but autonomy can lead to independence and feuding. Times change, and Ballmer is now engaged in playing the biggest catch-up game in the company's history.

The pace of technology change is as rapid as any I have seen. The Internet is fulfilling its current, although not originally intended, function of providing a level playing field for new companies to challenge the old. It is not happenstance that on the day Microsoft announced its reorganization that both the Gartner Group and IDC research organizations detailed the ongoing decline of the PC industry upon which Microsoft built its fortunes.

While there has been a lot of news leaks leading up to the "One" reorganization, little is known yet about whether Microsoft has thoroughly planned and revealed the nitty-gritty details to the company rank and file. At this stage for Microsoft, confusion is a much bigger competitor than Apple, Google or Amazon. The company has the size, money and customer base to find successful footing in this new world of technology—although I doubt that even Microsoft should be taking on those big three, let alone all the newcomers.

Big changes at a company should include a big vision statement, and even the typically hyper-enthusiastic Ballmer should be excused for forgetting to add a verb and predicate (Our incredible people, our spirit, our commitment, our belief in the transformative power of technology—our Microsoft technology—to make the world a better place for billions of people and millions of businesses around the world.) once in a while.

It will be Day 2, 3 and much more before it becomes apparent whether or not the "Microsoft One" reorganization will succeed in marshaling all those forces in one coherent direction. Lots of questions remain unanswered.

There are simple customer questions regarding product life cycles that need to be addressed. There is the question whether such a big change was needed. Why didn't the company also go out and hire some change agents instead of shuffling around the existing staff? The real work starts after the band stops playing, and that work will determine the fate of Ballmer's new vision for Microsoft and his legacy.