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Microsoft's Reorganization: 5 Issues Decoded

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"One Microsoft all of the time." This is what Microsoft is calling its latest reorganization.

These corporate announcements are often delicately crafted to make everything sound positive and constructive. Here are five issues decoded from Microsoft's fancy corporate speak:

1. Management and employees have to stop unhealthy internal competition.

The Microsoft CEO, Steve Ballmer, says "we are rallying behind a single strategy as one company -- not a collection of divisional strategies. [...] We will see our product line holistically, not as a set of islands."

It appears that management and employees are working in decentralized silos with their own strategies and agenda which aren't necessarily in the best interests of the overall company. This fragments and dilutes focus, efficiency, effectiveness, as well as the stewardship and use of firm resources.

Management gurus have long debated the pros and cons of centralized vs. decentralized organization structures. Many companies go through cycles of having each type of structure as a hope or charade that it will result in the real type of change needed. Often the issues are deeply rooted in company culture and the ethos of the people that changing the organization structure will only do so much.

2. The company needs to do everything better.

This is stated relatively straightforward when Steve Ballmer says:

"that means better execution from product conceptualization and innovation right through to marketing and sales. [...] 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. [...] We must improve in all aspects of the business."

3. Work as a team.

In his memo, the Microsoft CEO says "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."

Most companies have in their core values or competitive differentiators the lofty trait of teamwork. In small, much less large companies like Microsoft, politics, power and self-preservation often rule. The negative effects of power and internal competition at Microsoft are emphasized when Steve Ballmer talks about wanting to be one company and "not a collection of divisional strategies."

4. Time to market must be faster.

The company wants to do everything better including time to market.

The organization announcement says that a key value is being "nimble." It goes on to notify everyone that "in a world of continuous services, the timeframe for product releases, customer interaction and competitive response is dramatically shorter. [...] Each employee must be able to solve problems more quickly and with more real-time data than in the past."

Everyone needs to work faster.

5. They still need to figure out what to do and how to do it.

As with many corporate press releases, there was a lot of hype around this organization announcement. However in this same announcement, Microsoft says:

"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..."

You might ask yourself -- what was the purpose of this reorganization announcement if they still have to involve more people and "figure things out"? To further add to this, Microsoft says one of its key values is being "decisive." And Steve Ballmer ends the reorganization memo saying "let's go." He often ends his communications with this phrase. But here, "let's go" -- where and when? Microsoft has to wait until the end of the year for it to complete this reorganization before it can "go."

Reorganizations take a significant amount of deliberation, internal maneuvering of people and politics, and time. However, the more time you take and indecisive you are provides opportunities for employees to be distracted and not focused on their jobs. This works to support destructive internal competition, lack of teamwork, slow time to market and decreased productivity -- all of the things Microsoft is trying to combat with this reorganization.

For more on the Microsoft reorganization and analyst feedback, see Microsoft's current structure goes out the window on Techquity at Reuters TV below.

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