Regime change at Microsoft

Less than 48 hours after announcing that Windows Vista is delayed - again - Microsoft has split the Windows division into eight groups and brought in a new top dog. One Microsoft employee asked the other day, "Where's the freakin' accountability?" This might be the answer.
Written by Ed Bott, Senior Contributing Editor

Various news outlets, including The Wall Street Journal (subscribers-only link) and News.com, are reporting that Microsoft is about to split its Windows division into eight groups and bring in a replacement for the retiring Jim Allchin, who is currently in charge of all things Windows. The most important of the eight divisions is the new Windows and Windows Live group. According to the Journal, Steven Sinofsky, senior vice president of the Office group, will be in charge of that division and will take over planning for the version of Windows that will follow Windows Vista. (The Journal refers to it by its old code name, Blackcomb, but Microsoft has already confirmed that the new code name is Vienna.)

I spent two full days last week in Redmond meeting with managers from the Vista development team. This announcement came as a surprise to most of them, I’m sure. (Either that, or I never, ever want to play poker with anyone in this company.) There's no doubt in my mind that this reorg is a direct response to this week's slip in the Windows Vista schedule.

It’s gotta be a pretty dispiriting feeling to know that the project you thought was almost ready to wrap is instead going to go on for three months more. A few hours after the announcement, the anonymous Microsoft employee who throws brickbats (and occasional bouquets) under the nom de blog Mini-Microsoft delivered a fulmination that was pitch-perfect:

Vista 2007. Fire the leadership now!

In my afternoon daydream, after Allchin's email went out, I imagined all the L68+ partners from the Windows division gathered together and told, "You are our leadership. When we succeed, it is directly because of how you lead and manage your teams. When we fail, it is directly because of how you lead and manage your teams. We've had enough of failure and we've had enough of you. Drop off your badge on the way out. Your personal belongings will be dropped off at your house. Now get out of my sight."

Sigh. Well, I'd settle for the version: "... When we fail, it is directly because of how you lead and manage your teams. We reward success. We do not reward failure, especially sustained failure that has directly affected this company, its future, and its stock price. You will not receive any incentives this year. You will not receive a bonus. You will not get a raise. You will not be awarded stock."

People need to be fired and moved out of Microsoft today. Where's the freakin' accountability?

Indeed. The timing of this reorg, less than 48 hours after the official announcement of the schedule slip, says Allchin’s performance rating just slipped, maybe even to 2.5. It’s hard to see it as anything other than a slap in the face. And maybe an invitation to get a head start on those retirement plans while Sinofsky takes over the last stages of Windows Vista and Office 2007. A story in yesterday’s Journal previewed the change and added these details:

Tapping Mr. Sinofsky, 40 years old, adds an executive from Microsoft's Office group to the Windows division, Microsoft's largest contributor of revenue and profit. Mr. Sinofsky, who joined Microsoft in 1989 and served as a technical assistant to Chairman Bill Gates, has earned a reputation in his current role as head of the Office product group as a no-nonsense manager willing to push back against engineers, according to people familiar with the executive.

Microsoft's expected reorganization partly reflects an effort by Chief Executive Steve Ballmer to instill management rigor at the company, which has been marked by slower growth, an increasingly diverse product line and a new array of competitive threats.

“A no-nonsense manager willing to push back against engineers”? An effort to “instill management rigor”? Ouch. Those are damning indictments of current management.

This looks like an actual accountability moment in Redmond. A little more honesty, internally and externally, would help, too. For starters, someone should recall Tuesday’s breathtakingly dishonest press release. I’ve put the most bald-faced assertions in bold face below:

Microsoft Corp. today confirmed that Windows Vista, the next generation of the Windows client operating system, is on target to go into broad consumer beta to approximately 2 million users in the second quarter of 2006. Microsoft is on track to complete the product this year, with business availability in November 2006 and broad consumer availability in January 2007. …

“Product quality and a great out-of-box experience have been two of our key drivers for Windows Vista, and we are on track to deliver on both,” said Jim Allchin, co-president for the Platforms & Services Division at Microsoft. “But the industry requires greater lead time to deliver Windows Vista on new PCs during holiday. We must optimize for the industry, so we’ve decided to separate business and consumer availability.”

No wonder they delivered the news on a conference call. Even Bagdad Bob would have had a hard time keeping a straight face while reading the line “We must optimize for the industry.” I’m not even sure what that last phrase means. It sounds to me like someone’s trying to deflect the blame for this whole mess. Looks like they didn’t succeed.

Update 23-Mar 6:00PM EST: The press release announcing the reorg is here.

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