CEO Ballmer's reorg mail to the troops: 'One Microsoft all the time'

CEO Ballmer's reorg mail to the troops: 'One Microsoft all the time'

Summary: Microsoft employees across the world just got this e-mail from CEO Steve Ballmer about the company's latest reorg. Here it is in full.

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On July 11, Microsoft announced its latest cross-company reorg -- one designed to help the company realize its new devices and services charter. For more on who's in and who's out with this latest set of changes, check out my reorg post here.

onemicrosoft

CEO Steve Ballmer sent an email to all of Microsoft's approximately 100,000 employees first thing this morning (6 am PST) explaining the changes. Here it is in full.

From: Steveb
To: All Employees
Date: July 11, 2013, 6 a.m.
Subject: One Microsoft

Today, we are announcing a far-reaching realignment of the company that will enable us to innovate with greater speed, efficiency and capability in a fast changing world.

Today’s announcement will enable us to execute even better on our strategy to deliver a family of devices and services that best empower people for the activities they value most and the enterprise extensions and services that are most valuable to business.

This company has always had a big vision — to help people realize their full potential. In the earliest days, it was by putting a PC on every desk and in every home. We’ve come farther than we could have imagined. The impact we have collectively made on the world is undeniable, and I am inspired when talented new hires say they chose Microsoft because they want to change the world — that’s what we do today, and that’s what we’ll do tomorrow.

Sharpening Our Strategy

About a year ago, we embarked on a new strategy to realize our vision, opening the devices and services chapter for Microsoft. We made important strides — launching Windows 8 and Surface, moving to continuous product cycles, bringing a consistent user interface to PCs, tablets, phones and Xbox — but we have much more to do.

Going forward, our strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.

We will do this by leveraging our strengths. We have powered devices for many years through Windows PCs and Xbox. We have delivered high-value experiences through Office and other apps. And, we have enabled enterprise value through products like Windows Server and Exchange. The form of delivery shifts to a broader set of devices and services versus packaged software. The frontier of high-value scenarios we enable will march outward, but we have strengths and proven capabilities on which we will draw.

This memo shows you how far we have developed our thinking on our strategy for high- value activities based on devices and services delivery.

Driving Our Success

It is also clear to me and our leadership that we must do an extraordinary job to succeed in this modern world. We have delivered many great products and had much success in market, but we all want more. That means better execution from product conceptualization and innovation right through to marketing and sales. It also means operational excellence in cloud services, datacenter operations, and manufacturing and supply chain that are essential in a devices and services world. To advance our strategy and execute more quickly, more efficiently, and with greater excellence we need to transform how we organize, how we plan and how we work.

Improving our performance has three big dimensions: focusing the whole company on a single strategy, improving our capability in all disciplines and engineering/technology areas, and working together with more collaboration and agility around our common goals.

This is a big undertaking. It touches nearly every piece of what we do and how we work. It changes our org structure, the way we collaborate, how we allocate resources, how we best empower our engineers and how we market.

One Strategy, One Microsoft

We are rallying behind a single strategy as one company — not a collection of divisional strategies. Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands. We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders. All parts of the company will share and contribute to the success of core offerings, like Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers.

We will reshape how we interact with our customers, developers and key innovation partners, delivering a more coherent message and family of product offerings. The evangelism and business development team will drive partners across our integrated strategy and its execution. Our marketing, advertising and all our customer interaction will be designed to reflect one company with integrated approaches to our consumer and business marketplaces.

How we organize our engineering efforts will also change to reflect this strategy. We will pull together disparate engineering efforts today into a coherent set of our high-value activities. This will enable us to deliver the most capability — and be most efficient in development and operations — with the greatest coherence to all our key customers. We will plan across the company, so we can better deliver compelling integrated devices and services for the high-value experiences and core technologies around which we organize. This new planning approach will look at both the short-term deliverables and long-term initiatives needed to meet the shipment cadences of both Microsoft and third-party devices and our services.

This means we will organize the company by function: Engineering (including supply chain and datacenters), Marketing, Business Development and Evangelism, Advanced Strategy and Research, Finance, HR, Legal, and COO (including field, support, commercial operations and IT). Each discipline will help drive our overall strategy. Each discipline will also be charged with improving our core capabilities in its area. We must improve in all aspects of the business.

There will be four engineering areas: OS, Apps, Cloud, and Devices. We will keep Dynamics separate as it continues to need special focus and represents significant opportunity. We will consolidate our technologies coherently into these groups pulling together some things that have been spread out in our current BG structure like cloud infrastructure, operating systems, mail, and identity, to name a few. Some of these changes will involve putting things together and others will involve repartitioning the work, but in all instances we will be more coherent for our users and developers. We have resolved many details of this org, but we still will have more work to do. Undoubtedly, as we involve more people there will be new issues and changes to our current thinking as well. Completing this process will take through the end of the calendar year as we figure things out and as we keep existing teams focused on current deliverables like Windows 8.1, Xbox One, Windows Phone, etc.

To improve engineering pace and quality, we will increase focus on our engineering systems, processes, and tools to improve the productivity of every engineer and to facilitate engineering collaboration and contribution across the company. Our engineering culture and new structure will enable more cross- group contribution, while maintaining confidentiality of some projects as needed. We will improve the approach we use to get MSR involved in product development, building on and enhancing our significant strengths there.

Organizing for Speed and Strategic Alignment

Specifically, our teams and their leaders will be these:

Operating Systems Engineering Group. Terry Myerson will lead this group, and it will span all our OS work for console, to mobile device, to PC, to back-end systems. The core cloud services for the operating system will be in this group.

Devices and Studios Engineering Group. Julie Larson-Green will lead this group and will have all hardware development and supply chain from the smallest to the largest devices we build. Julie will also take responsibility for our studios experiences including all games, music, video and other entertainment.

Applications and Services Engineering Group. Qi Lu will lead broad applications and services core technologies in productivity, communication, search and other information categories.

Cloud and Enterprise Engineering Group. Satya Nadella will lead development of our back-end technologies like datacenter, database and our specific technologies for enterprise IT scenarios and development tools. He will lead datacenter development, construction and operation.

Dynamics. Kirill Tatarinov will continue to run Dynamics as is, but his product leaders will dotted line report to Qi Lu, his marketing leader will dotted line report to Tami Reller and his sales leader will dotted line report to the COO group.

Advanced Strategy and Research Group. Eric Rudder will lead Research, Trustworthy Computing, teams focused on the intersection of technology and policy, and will drive our cross-company looks at key new technology trends.

Marketing Group. Tami Reller will lead all marketing with the field relationship as is today. Mark Penn will take a broad view of marketing strategy and will lead with Tami the newly centralized advertising and media functions.

COO. Kevin Turner will continue leading our worldwide sales, field marketing, services, support, and stores as well as IT, licensing and commercial operations.

Business Development and Evangelism Group. Tony Bates will focus on key partnerships especially our innovation partners (OEMs, silicon vendors, key developers, Yahoo, Nokia, etc.) and our broad work on evangelism and developer outreach. DPE, Corporate Strategy and the business development efforts formerly in the BGs will become part of this new group. OEM will remain in SMSG with Kevin Turner with a dotted line to Tony who will work closely with Nick Parker on key OEM relationships.

Finance Group. Amy Hood will centralize all product group finance organizations. SMSG finance, which is geographically diffuse, will report to Kevin Turner with a dotted line to Amy.

Legal Group. Brad Smith will continue as General Counsel with responsibility for law and corporate affairs and will map his team to the new organization.

HR Group. Lisa Brummel will lead Human Resources and map her team to the new organization.

As part of these changes, Kurt DelBene will be retiring from Microsoft. Kurt has been a huge part of our success in evolving Office to be a great cloud service, and is a key member of my leadership team. I can’t express enough gratitude for the work he’s done for the company, and I will truly miss him. Kurt is a truly amazing leader and a special person. His contributions to Microsoft over 20+ years can inspire us all.

Craig Mundie will be stepping off the SLT to devote 100% of his time to a special project for me through the end of this calendar year. Beginning in 2014, Craig will continue as a consultant through his previously agreed upon departure date at the end of calendar 2014.

Also at this time, Rick Rashid will step away from running Microsoft Research and move into a new role driving core OS innovation in our operating systems group. Rick created MSR, the most amazing computer science research institution in the world. We owe him so much for that. He has a great team to assume the mantle, and it is exciting to have Rick return to his roots in OS to help propel us forward.

How We Work

The final piece of the puzzle is how we work together and what characteristics this new Microsoft must embody. There is a process element and a culture element to discuss.

Process wise, each major initiative of the company (product or high-value scenario) will have a team that spans groups to ensure we succeed against our goals. Our strategy will drive what initiatives we agree and commit to at my staff meetings. Most disciplines and product groups will have a core that delivers key technology or services and then a piece that lines up with the initiatives. Each major initiative will have a champion who will be a direct report to me or one of my direct reports. The champion will organize to drive a cross-company team for success, but my whole staff will have commitment to the initiative’s success. We will also have outgrowths on those major initiatives that may involve only a single product group. Certainly, succeeding with mobile devices, Windows, Office 365 and Azure will be foundational. Xbox and Bing will also be key future contributors to financial success. Our focus on high-value activities — serious fun, meetings, tasks, research, information assurance and IT/Dev workloads — also will get top-level championship.

Culturally, our core values don’t change, but how we express them and act day to day must evolve so we work together to win. The keys are the following:

Nimble

In a world of continuous services, the timeframe for product releases, customer interaction and competitive response is dramatically shorter. As a company, we need to make the right decisions, and make them more quickly, balancing all the customer and business imperatives. Each employee must be able to solve problems more quickly and with more real-time data than in the past.

Communicative

In the new, rapid-turn world, we need to communicate in ways that don’t just exchange information but drive agility, action, ownership and accountability.

Collaborative

Collaborative doesn’t just mean “easy to get along with.” Collaboration means the ability to coordinate effectively, within and among teams, to get results, build better products faster, and drive customer and shareholder value.

Decisive

As a global company with literally billions of diverse customers in an accelerating business environment, we must have a clear strategic direction but also empower employees closest to the customer to make decisions in service of the larger mission. This is tricky in a big company, but it is the key to higher levels of productivity, growth and customer satisfaction.

Motivated

In our industry, every day brings more challenges and more opportunities than the day before. But we have a unique chance to make the lives of billions of people better in fundamental ways. This should inspire all of us — those who love making products and services, those who love engaging with customers, and those who love planning and running our company in the most effective way possible. We want people who get up each morning excited to make Microsoft better — that’s how we come closer to fulfilling the potential of all people around the globe.

Our leadership team has discussed these cultural aspects a lot and is committed. In my own staff meetings, we are modeling these new characteristics yet also find ourselves occasionally slipping back. One strategy, united together, with great communication, decisiveness and positive energy is the only way to fly.

Seizing Our Unique Opportunity

Together, we have created great products and great success, but we all want more. That means a strategy to deliver a family of devices and services that best enable people for the activities they value most and the enterprise extensions and services that are most valuable to business. A new structure to bring these to market faster. Stronger centralized services so we can be more efficient and effective. Priority focus areas, short and long term. New characteristics of how we work together. In other words, better execution and innovation through strategy and goal and discipline and engineering coherence. One Microsoft all the time.

Across Microsoft, we are facing incredible new opportunities. As devices become further integrated into everyday life, we will have to create new and extraordinary experiences for our customers on these devices. We are going to focus on completely reinventing experiences like creating or viewing a creative document and what it means to communicate socially at home or in meetings at work. We are going to immerse people in deep entertainment experiences that let them have serious fun in ways so intense and delightful that they will blur the line between reality and fantasy. And as we develop these new experiences, we will also support our developers with the simplest ways to develop apps or cloud services and integrate with our products. We will help businesses that find themselves in a new world of ever-mounting information to manage that information through greater enterprise information assurance. We will make these high-value activities priorities in our strategy.

Lots of change. But in all of this, many key things remains the same. 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. It’s why I come to work inspired every day. It’s why we’ve evolved before, and why we’re evolving now. Because we’re not done.

Let’s go.

Steve

Topics: Microsoft, Cloud, Tablets, PCs, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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75 comments
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  • Poker

    Ballmer: "We are rallying behind a single strategy as one company"

    In poker, this is called Double or Nothing.

    Hope it works...
    JohnMorgan3
    • RE: Poker

      Actually, it's in "gambling" where you go "double or nothing".

      In poker, it's ALL IN!! ;)
      joecogan@...
      • Notice all the M$ shoe shine boys

        All lining up outside his office.

        bootlick...bootlick...

        bootlick...bootlick...

        bootlick...bootlick...
        CaviarRed
    • Like the movie

      It's like reorganizing the deck chairs as the Titanic sinks. ;-)
      Harvey Lubin
  • Reorganizing The Floaters in the Toilet Bowl...

    I don't see a bunch of exciting new names here. A better answer might be to pull the handle - although I'm worried about the Big Log plugging it up...
    drskywalker
    • They don't need new people

      just new strategy, which they have and are now implementing.
      grayknight
      • Yes they do.

        They need leadership that is smart enough to realize that putting the same UI on a phone and a desktop is stupid, which they don't have.
        GrumpyOldMan
        • Plus...

          they can't even get the drivers right for their own devices that were built by Microsoft - there is no hope, until Ballmer is fired or retired.
          JCitizen
      • New strategy?

        This strategy isn't new. They have been working for years to stabilize their income stream by shifting away from software release cycles toward monthly, fee-based services. They've already converted Office to a service. The move toward more frequent incremental OS releases is being set up specifically so that they can justify a move to a subscription service for all of your devices. This is all more of the same.

        This pseudo-reorganization is simply a gesture to show the stockholders they're even more serious about income stabilization. The heavy use of vague terms like "improve execution" and "core capabilities" are the typical air-filled blather we were taught to use in our MBA courses. As intelligent as the employees at Microsoft are, I'd be very surprised if they are taken in by this "rouse the troops" email.

        This email sounds a lot like the vague song and dance we hear during political campaigns. The tone and wording of the speech is carefully contrived to create a positive emotional response in the weak minded, while the specifics of how all this magic will happen are nowhere to be seen. Again, I doubt Microsoft employees are gullible enough to buy into this carefully-crafted rhetoric.

        The fact that Balmer talks about increases in "collaboration" and "agility" in the same sentence shows he has no clue about reality. When you increase collaboration, you add communication overhead, which slows down a process. That is the polar opposite of increasing agility. I feel sorry for the poor middle management who will now be expected to get both results simultaneously out of their people.
        BillDem
        • Well Spoke!

          - not as much fun as the bowl analogy, but a concise analysis.
          drskywalker
        • Ballmer's last stand???

          Before they drag monkey boy away kicking and screaming...

          I agree with you Bill, collaboration and agility are on opposite side of a balance, much like security and productivity. If one goes up, the other goes down. It will be interesting to see what happens once Ballmer is gone. That entire spiel is pure hogwash and cheerleading, it’s laughable at best.
          i8thecat4
          • Not so

            To be agile does not mean no collaboration but just being in the same wave length. As long as you share the same goals and attitudes there is no reason for being diffused or distracted. The actual process can lead to the synergistic creation of new ideas and inspiration. The future is all about collaborative efforts on a global scale.
            primartcloud
        • BillDem New Response?

          Your response is not new. ABMers have been working for years to stabilize their anti MS rhetoric and build a case against Steve Ballmer. They've already converted him from the CEO of the software company that has most impacted the IT landscape, ever, into their own description, only their minds could conjure up - MonkeyBoy.

          Your Pseudo-response is nothing more than to try and show your ABM troops that you believe you are intelligent and your heavy use of terms like "vague" and "song" and "dance" are the typical air-filler blather we were taught to use in grade school.

          The fact that you don't understand taht collaberation actually increases agility is beyond my ability to comprehend. You might try and understand why Sharepoint is so popular and used by a very large majority of all business around the world. Without collaboration and the tools they provide, the same attempt at agility would require meetings and tons of emails that need to be sortd through and hallway discussions and phone calls and on and on and on.
          It's typical that you woudl try and mislead your troops into believing that these things are opposite when indeed they work together better than any other method that has come before it. I think you should retract that statment, really, you know better than that and your troops are going to believe it.
          The one really smart guy that follows you....i8thecat (you can sense the intellect just by his nic! )....is aping your remarks and taking them further. You better nip it in the bud! Everyone listens to i8thecat.

          Thanks.

          btw, do you really think an email to all employees globally is going to detail every bit of the plan? You don't think that part of a CEO's job is to be a good politician when needed and in times like this, use general terms? Come on. The details will follow within the groups. This was not a time or place for elaborate details and you know that!
          please back off of the ABM rhetoric.
          xuniL_z
    • drskywalker. Were you looking for name like yours?

      Yes, anyone sporting "drskywalker" can be counted on for smart perspective.
      Thanks for reminding me to be thankful people like you are not running anything in the world.
      xuniL_z
  • PC sales fell...

    ...another 10% this last quarter. Wonder how many 10% drops there are before the market gets so low nothing matters?
    Tony Burzio
    • Still about 300 million units a year.

      Microsoft will get by just fine I am sure.

      It will still bee a little while for market stabilization in the PC marketplace to complete, but it will. hen things will return to a state of relative predictability and the whiners will have one less thing to whine about.

      Mobile market will also go through a market saturation then stabilization phase eventually as well. And that's bound to come along a lot sooner than it did for the desktop/laptop market.

      Give it a year or two.
      cayblex1
      • 300 million units a year

        According to Microsoft COO Kevin Turner that's about 17% of connected devices this year and 10% of the expected market for connected devices in 2017: http://news.cnet.com/8301-10805_3-57593090-75/microsoft-coo-kevin-turner-refuses-to-lose/

        This is not the dominant 90% share the company is engineered around. Additionally of the 14 Fortune-500 companies called out in that presentation as competitors to go on the offensive against, almost all are also customers. Well worth the read, taken in that light. The company is going to war against the entire tech world and not from a position of strength. Historically the company's handling of competitors is rough and tumble, "compete to win" style so these companies are on notice that the gloves are now off.

        By the way, in executive-speek "opportunity" is the accepted euphemism for "problem". We don't have "problems" or "challenges", we have "opportunities".
        Zendabecca
      • Re: Microsoft will get by just fine I am sure.

        Unfortunately, the OEMs it relies on to actually make those PCs are not doing so well.
        ldo17
    • Though PC sales used to be important

      They matter less to this new Microsoft (and have mattered less for awhile). Considering the enterprise business side, Microsoft still owns this market.
      grayknight
      • Re: They matter less to this new Microsoft

        So what exactly is its OS running on?
        ldo17