Will removing the organizational silos fix Microsoft?

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?
Written by Matt Baxter-Reynolds, Contributor
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

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