Microsoft Culture Fix

Recommendation

Adam Hanft’s Huffington post news article appropriately describes Ballmer’s reorganization and revitalization attempt as a shift of bedroom locations of three smart kids who simply don’t get along and just hoping for the best. The organizational structure of “One Microsoft” and stack rankings have not resulted in improved performance nor created an engaging culture. Employee motivation still remained at an industry low with Ballmer receiving a 47% approval rating and 85% employee satisfaction rating. Team design and stacked rankings have been notoriously for producing bitterness and turnover rather than producing high performance.

Fixing the Structure

A more ideal organizational structure needs be implemented that not only aligns the 7 S’s (structure, strategy, skills, shared values, staffing, style, and systems), but emphatically optimizes an employee’s motivation and creativity. The bureaucratic, hierarchal, and centralized structure that Ballmer implemented as described previously severely hindered the efficiency of the decision making process and further resulted in decreased employee morale. Microsoft would do better in a team, simple, or virtual structure. Although the divisional structure Ballmer implemented has not proven to be dysfunctional, making the structure flatter and slightly more decentralized would have increase employee autonomy and decision making responsibilities. Additionally, focusing more teams inside divisions and potentially introducing cross functionality between different divisions, especially among engineering, would also foster increased collaboration and promote a more entrepreneurial feel to the environment. Google also experimented with a completely flat hierarchy with no managers and realized that a more informal cross functional structure optimized the strengths of their engineers. Microsoft should contemplate adopting a structure similar to this, as shown in the appendix.

Fixing the Culture and Employee Motivation

The technology industry’s biggest competition is usually for engineering talent. As a result, human resource role plays a key role in conveying the importance of people and should recognize people as the key competitive advantage to capitalize on.

In Microsoft, competitive culture, cut throat nature of teams, hierarchal and stringent job design, and a flawed stack ranking reward system all attributed to a poisonous environment. Ballmer’ simple reorganize company structure was not enough. He should have fostered an engaging culture that rewarded collaboration, not internal competition. This could be accomplished by refocusing Microsoft’s core values to include collaboration, having senior leadership enact this value, and reward based on collaboration. Abolishing the stacked rankings would eliminate internal strife