Newly minted Microsoft CEO Satya Nadella has risen steadily over his 22-year tenure to arrive at the top, but it doesn't look like he's getting a lot of autonomy to shake things up.
Bill Gates, who steps down as chairman of the board as Nadella is promoted, assumes a new title: Founder and Technology Advisor. Microsoft says his role will necessitate devoting more time to the company, supporting Nadella in shaping technology and product direction.
What that means, Gates says in a video to welcome Nadella, is that he's coming back to work, with plans to spend more than a third of his time meeting with Microsoft product groups.
What are the key areas? "There's a challenge in mobile computing, there's an opportunity in the cloud," Gates says. "I'm thrilled that Satya has asked me to step up, substantially increasing the time that I spend at the company."
Outgoing CEO Steve Ballmer took over for Gates in 2000, famously saying, "I'm not going to need him for anything. Use him, yes, need him, no." The company then went on to fall behind in mobile (Apple) and cloud (Amazon), and its stock price plummeted by more than a third. Despite that, the company became more and more profitable, with net income rising to $21.9 billion.
Nadella says in an email to Microsoft employees that he wants Gates's advice: "I've asked Bill to devote additional time to the company, focused on technology and products."
There's no shame in asking Gates for advice, and it would be a mistake not to use such a valuable resource. Regardless it still must be intimidating to have a giant like Gates poking around among the troops and looking over your shoulder.
If that's not enough, thanks to Ballmer's organizational shake-up last year, Nadella is saddled with a corporate structure that has some high-ranking executives reporting to two bosses. For example, here's Ballmer's description of the role of Tony Bates, the former CEO of Skype, which is now part of Microsoft: "OEM will remain in [the sales marketing and services group] with Kevin Turner with a dotted line to Tony who will work closely with Nick Parker on key OEM relationships."
This confusing hierarchy, which is still sorting itself out, will be a big drain on Nadella's time. If he disagrees with choices Ballmer made, it will increase the period of confusion and productivity loss that such reorganizations bring.
Along with these internal pressures, Nadella faces the pending $7.2 billion acquisition of Nokia which not only brings the challenge of integrating a massive hardware operation into the company but also dealing with growing Microsoft's headcount by 32,000, an increase of just about a third.
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