Microsoft's Nadella Presides Over Exec Shake-Up

Early into his tenure as Microsoft's CEO, Satya Nadella gives new meaning to office politics by making some high-profile changes at the top.

Satya Nadella

Satya Nadella took the reins at Microsoft Feb. 4, in a move that also marked the return of Bill Gates to Microsoft as a technology advisor. "We need to prioritize innovation that is centered on our core value of empowering users and organizations to 'do more,'" said Nadella in a statement following his appointment as chief executive.

"And with every service and device launch going forward, we need to bring more innovation to bear around these scenarios," added Nadella. To help usher in those innovations, he is embarking on a tried-and-true method of pushing the corporate reset button: an executive shake-up.

Following reports over the weekend that Tony Bates, the former CEO of Skype, and Tami Reller, who served as both the chief marketing officer and chief financial officer at Microsoft, were leaving the company, Nadella issued an update on the company's new leadership. In an email to staffers, he said that after asking the company's Senior Leadership Team (SLT) for their "all in" commitment as the company embarks on its next chapter, the company needs "to drive clarity, alignment and intensity across all our work."

Confirming the departures of Bates and Reller, Nadella said he decided that Microsoft needed "a single leader running marketing for the company." That role falls to Chris Capossela who will report directly to Nadella as the company's new executive vice president and chief marketing officer.

He remarked that Capossela is a "strong organizational leader," and having worked with retailers and OEMs has imbued him with "visibility and insight into how consumers are buying and using our products." The move aligns with Forrester CEO George Colony's assertion that the software giant's new CEO "must drag Microsoft into the age of the customer."

Nadella, Colony argued in a blog post, "must shake the culture free of its controlling, monopolistic tendencies and make it customer-obsessed—vibrating to the subtle market demands of a newly powerful and dynamic customer base. It can no longer dictate the market—it must anticipate it, respond to it, and move at the speed of its increasingly fickle and unpredictable customers." Capossela's promotion may help put the company on that path.

It's Microsoft's new chief strategy officer that is raising eyebrows, however.

Nadella tapped Mark Penn, whose "focus on using data to quickly evaluate and evolve [Microsoft's advertising] campaigns has driven new insights and understanding." Penn's team was responsible for the current slate of "Honestly" TV ads and the recent Super Bowl spot, which "were widely cited as examples of high-impact advertising across the industry," said Nadella.

Penn also worked in politics, most notably as an aid in Hillary Clinton's 2008 presidential campaign. A Feb. 3 report in The New York Times describes Penn as a "divisive figure among Clinton loyalists" as well as within Microsoft.

The executive's penchant for negative advertising, a tactic he employed during Clinton's failed presidential bid, has earned him critics within the tech giant. "Feelings about Mr. Penn within Microsoft run hot, partly because of an attack campaign he initiated against Google after he arrived at the company. The 'Scroogled' campaign, which included a Website and various commercials, sought to conjure consumer concerns about Google by highlighting its privacy practices," reported The New York Times' Matthew Ryan Williams.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...