Will removing the organizational silos fix Microsoft?

Will removing the organizational silos fix Microsoft?

Summary: Ballmer and Co's restructuring is all about removing the silos that stifled innovation and cross-product working groups. But will removing them let them build better products?

TOPICS: Microsoft
Silos - Silos
Microsoft doesn't have a slogan anymore. This is my contribution.

We now know how Microsoft's re-org is going to shake out. The principle, as my ZDNet colleague Mary Branscome details, is to remove the silos that prevented effective cross-team cooperation across the organisation.

You don't reorganise an 97,000-employee organisation without having some pretty clear motivation for doing so. Ballmer and the other senior management obviously think that they course they are on is going to head into some impressively static rocks, presumably whilst they watch Cook, Page/Brin, and a flotilla of a thousand little rookie upstarts sail off into calmer, warmer, and more fish-enriched waters.

This gives some credibility to my view that the post-PC products that Microsoft have been doling out over the past three or so years have been poor in comparison to the competition. If you look at search, social networking, advertising, and of course smartphones and tablets, everyone else has been eating Microsoft's lunch. Ballmer and Co clearly feel they've been putting out ropey products too.


It's always nice to realise you've made a mistake, learn from it, and adapt.

But what I can't shake the re-org is this general feeling of "so what?" How is taking the silos out going to make any difference?

Take Windows RT. We know this product hasn't been selling (Microsoft aren't crowing about the sales, and they've reduced the price so much they've made a new Bargain Basement under the original Bargain Basement). We also know OEM partners aren't grabbing at it with both hands.

In my own view, Windows RT and Surface RT as products are both awful and almost entirely without merit compared to the iPad and good Android tablets, like the Nexus 7.

But for Microsoft there is another problem in that Windows 8 tablets need to be a thing as well regardless of whether Windows RT set the world on fire. And to a Redmondian, that means one thing -- it has to have a keyboard, and it has to run Office.

It appears that not one of the 97,000 employees of Microsoft actually understands why people buy iPads and Android tablets, because it sure as mustard is not to run Office on them.

(Curiously it appears that a growing number of them do understand why people buy smartphones, which is why Windows Phone is taking a decent shape.)

If we can go to a parallel universe where Ballmer's re-org happened five years ago, a parallel universe where the silos are gone, are Windows RT/Windows 8 tablets any better?

Imagine you're starting with a blank sheet of paper, and your job is to build a tablet that competes with the iPad. If you're following, you copy and improve. If you start to irritate Apple, they'll start copying and building on you. This is how innovation works, and if you look at iPad and Android, you can see that happening.

Windows hasn't started with a blank sheet of paper -- Microsoft's engineers have had to go off half-cocked. They've had to protect the revenue from Office and "fix" their perceived problem that the iPad is basically broken because you can't run Office on it.

So if we have our parallel universe with no silos, what would have been different?

Probably nothing. Microsoft would have been strongly motivated (and a little obsessive) about getting Office running on a tablet. The execution of Office on Windows tablets is suboptimal because Office had to run on Old Windows desktop mode, not New Windows Metro-style mode. Thus Windows tablets still needed to be presented to the market as two mismatched operating systems duct-taped together. It wasn't the silos that did that, it was time. Removing the silos may have led to some efficiencies, which may have made a marginally slicker execution.


In May 1995, Bill Gates sent his now-famous "Internet Tidal Wave" memo, the intention of which was to get the company to get hold of the opportunity of the internet. (In 1995, Microsoft was one-fifth of today's size 18,000-odd people employees.)

Incidentally, here's an interesting quote from Gates in his memo:

I think that virtually every PC will be used to connect to the Internet and that the Internet will help keep PC purchasing very healthy for many years to come.

Eighteen years separate those memos, both are about keeping the PC market alive.

The "Internet Tidal Wave" and "One Microsoft" memo are likely to go down in Microsoft's history as similar documents. Both identify a risk, and both set out a plan. ("One Microsoft" has a structural reorganisation with it; "Internet Tidal Wave" did not.)

The computer industry shifts through separate eras. About once every 15 years, everything changes. We've gone from mainframe, to minicomputer, to PC, to internet-connected PC, and now to post-PC.

Gates's memo signalled a shift within Microsoft that the PC era was ending and the internet-connected PC era was beginning. Microsoft did a bang up job of handling this shift.

Ballmer's memo signals the next era shift -- PC to post-PC.

I've been skeptical about the ability for Ballmer to pull off this reorganisation. Forcing a cultural change in an organisation that's comprised of almost one-fifth of a million individuals seems a logical impossibility. Or at least, it seems impossible to do it in any sort of appropriate timescale. But having re-read Gates's memo and remembering back to the NIH ("not invented here"), locked-in/walled garden mess that Microsoft was trying to create in the MSN v1, I'm much more optimistic. They fixed that, right?

If you look at this as not a reorganisation, but a refocusing, specifically one modelled on what Gates did with the internet tidal wave even I, as skeptical as I am, does have some glimmer of belief that they can make it.

The point of removing the silos is that in isolation -- as illustrated in the thought experiment above -- won't fix it. Removing the silos simply provides an environment where change can happen. As the silos are removed, a new way of looking at people and their relationships with computings needs to be allowed to bubble up from society, into the organiastion, and out into their products.

It's essential, absolutely essential, that Microsoft's employees learn to understand what Apple's, Google's, BlackBerry's, and even Amazon's employees understand. This wave of computing -- I call it "post-PC", some people don't like the same -- this wave is all about connections, relationships, passion, and sociological factors. It's this change that explains why Microsoft is struggling and being destroyed in the market. It's not about work-focused, Office-running PCs anymore.

It's about life.

What do you think? Post a comment, or talk to me on Twitter: @mbrit.

Image credit: Wikimedia

Topic: Microsoft

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  • What's The Opposite Of "Synergy"?

    Microsoft's problem up to now is they keep trying to use their newer businesses to prop up their existing ones. Thus, their mobile OSes are crippled to avoid encroaching on the territory of desktop Windows, and Office isn't allowed to exploit the fast-growing Android market in the vain hope that it will somehow attract customers to Microsoft's OSes.

    The reorg looks like going in completely the wrong direction to fix this problem.
    • New Label, Same Culture Mindset

      You can change the labels, make it look new, but unless you change the entrenched mindset it is still "business as usual"; it just looks different from the outside.
  • I think not ...

    ... therefore MSFT, like Descartes, will not be.

    I've mentioned before the parallel between MSFT and Tom Hank's character in BIG. TH plays a boy who is magically transferred to an adult body overnight. He finds natural employment as a designer in a toy store, where he is a huge success ... because as a boy he really knows what customers want and how to sell toys to kids. Unfortunately he grows up ... and with an adult's mentality becomes a disaster at his job, losing touch with his customers.

    So it goes with MSFT: initially a flexible, cheap platform providing toy computers to the adults competing with the likes of IBM. But now MSFT has grown up ... and wishes to replicate a copy of the the insidious, greedy, silo ecosytem designed by APPL. No more hardware choice and reconfiguration (Surface + METRO); no more open application development platform (30% cut please); expensive devices (gold-plated dustbins like Surface RT) ... and can you pay us forever for the privilege of using the software you could once buy as we move to the cloud.

    "It appears that not one of the 97,000 employees of Microsoft actually understands why people buy iPads and Android tablets, because it sure as mustard is not to run Office on them."
    Complete rubbish. I believe the vast majority of engineers at MSFT - were their creativity to be unleashed - would blow competitors out of the water. But corporate management culture at MSFT is 'adult': profit-driven, technology limitation after technology limitation forced upon customers following inept sales and marketing. The hubris surrounding the START menu is the sublimation of customer malcontent ... and MSFT haven't got the culture to implement the necessary change to this trivial customer requirement.

    Adults like Sinofsky need to be excised from the company. But it is very difficult to change a corporate culture.

    Leave you with one thought: given that Windows, Office and (say) Photoshop are the most popular 'applications' in the world ... what kind of idiots have to be in charge for them, and their subscriptions, to received with hostility by customers?

    MSFT needs to fire some people and undertake a HUGE change management programme. Maybe the reorg. is a sign that it's happening?
  • Hail Mary Pass

    Ballmer could have sold the losing silos like Online Services but instead he chucks a hail mary pass. Ballmer insists that he can make a profit with online services.
    Tim Jordan
    • Horizontal and Vertical Structure

      I read an article years ago about how a company should change its organization every 5 years. In reality we work in a matrix. When one organizational structure is used for too long the lines become so politically embedded that matrix does not work. Also people find corners in that structure and are able to get by without being productive. When you change the main lines every 5 years you keep organizational lines from becoming too rigid and keep people working more in a matrix. Also when the lines change it breaks up the dead corners and flushes the dead wood.
    • You mean Hail Mary Post

      That what your post is considered, a "Hail Mary Post"
      William Farrel
      • Re: You mean Hail Mary Post

        Ad hominem--you lose.
  • "It's not about work-focused, Office-running PCs anymore. It's about life."

    If that's true, Microsoft is light-years away from "getting it". Just look at the comments from the Microsoft faithful---if a tablet doesn't run Office, it can't do "real work", which is what differentiates the Surface from the rest of the pack of "toys".
    They're trying to ride two horses at the same time--consumer and enterprise, and that's why their marketing is so screwed up. Showing people dancing and clicking in the work environment isn't going to sell well to either side. Why don't they just admit that the enterprise is where their heart and fortunes have always been, and concentrate on that market?
    • Nailed it

      Oh man, so right. They have always had to be all things to all people, which is a sort of unique constraint that no one else has. I will never understand the logic behind forcing people to use a conventional laptop or desktop as if it is a touch screen device. And as you point out, they are trying make a "toy" and a "workhorse" out of the same product. Now that I think of it, calling the early Apple computers toys is the same mistake that IBM made at the time.

      I agree; they need to pick what they want to be and go there. Likely, that would be in the enterprise because they are getting their heads handed to them in retail.
  • not one of the 97,000 employees of Microsoft ...

    That's an insulting and demeaning offense. AFAIK most companies are not run like a democracy instead a few dudes have the say.
    How dare the editor to allege that all MS employees are plain stupid and willfully ignorant.
    • Not a problem. Especially since MS started out by refusing to hire

      people with experience in how operating systems work, applications done, and security.
      • ROTFLMAO!

        This may be the dumbest twat yet. So Microsoft doesn't know how operating systems work, doesn't know how applications are done, and doesn't know about security?

        You are dangerously stupid. For God's sake, don't have any children. The world is already filled with too many stupid fools like you.
  • Will removing the organizational silos fix Microsoft?

    There is nothing broken about Microsoft that would need fixing. They are just keeping up with the times to stay ahead of the game.
    • "They are just keeping up with the times to stay ahead of the game."

    • ZD NET

      Please fix you comments engine.
    • Microsoft

      is broken, it needs to be fixed. I doubt Baller can do it, but we will see.
    • I second that "Huh?"

      I think MS is going to have to fire the paid posters like you as part of this reorg. You represent the 'old MS' denial mentality.
      • I've found those quick to label others as

        paid posters or shill, are in reality paid posters and shills themselves.

        It like that saying goes, sock puppet, that "criminals trust nobody"
        William Farrel
        • Re: I've found those quick to label others as

          Pot ... kettle ...