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How Microsoft's delayed reorganization is fixing the loyalty gap

Rob Enderle | June 10, 2013
Word's out that Microsoft is poised to reorganize itself as a 'device and services' company. CEO Steve Ballmer has been trying to do this for a decade, but executives disloyal to him--or still loyal to Bill Gates--often got in Ballmer's way. But Redmond's successes, including Azure and Office 365, suggest this culture may finally be changing.

But the Zune was under marketed, it lacked video content and, compared to the sleek iPod, was truly ugly. Apple rolled over the offering like a bulldozer. That was all execution, and Zune showcased a horrible execution problem.

This problem was repeated with the Portable Media Center, Windows Tablets,Windows Vista and even Windows 8. In these cases, it wasn't that the idea or direction was bad. The execution was horrid.

Part of this is because virtually every products' marking effort was underfunded. Even if marketing execution has been good, as it initially was with Windows Phone, the funding just wasn't at the appropriate level.

Much of the failure, though, also reflects that whatever Ballmer asked for wasn't translating to successful execution. Executives used to working with Gates rebelled, likely thinking someone such as Ballmer shouldn't have the job, then tried unsuccessfully to showcase they were smarter than him.

Leadership requires two components: Someone who can lead and many who are willing to follow. Given Ballmer's success as an executive before taking Gates' job as CEO, Microsoft's failures may come down to an absence of followers, not a leader.

Ballmer Finally Learning His Lessons
We're finally seeing a ton of progress at Microsoft thanks to Azure, Azure Pack, Office 365, SkyDrive and Windows 8.1. Why? Ballmer finally has a team that's loyal, not secretly working to get Gates back or become the next Gates.

You can't run a disloyal company, and there were simply too many senior executives who seemed to think they should be steering the boat while doing a bad job executing what, in hindsight, might have actually been strategically solid orders. While Ballmer still shows an unwillingness to fully fund marketing, so did Gates-and recent anti-Apple spots and Windows 8 campaigns suggest that this, too, may be changing.

We're finally seeing the Microsoft that Ballmer envisioned more than a decade ago. With it, he's confirming that any successful CEO needs a team of executives loyal to him, not to his predecessor or to its own vision of being the next CEO. Ballmer appears to have learned this lesson, but I can think of several CEOs who have yet to learn it.


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