A past conversation with a friend on the announcement Steve Ballmer CEO of Microsoft would be stepping down next year caused us to wonder if there was some other underlying reason as he just announced a major restructuring of the company. We both speculated a bit, but, I must admit, for me I wasn’t familiar with the reorganization announcement.

Since I wasn’t familiar with the changes Ballmer was making, I asked my friend his opinion on them and he said it’s a mess. I let it go and we went on to another topic. But, my curiosity had been sufficient stimulated so I decided to do some research to fill in my knowledge gap around the announced Microsoft reorganization. After reading several articles, I shook my head, and said good luck. Here’s why.

Organizational Entrenchment:

This change was long overdue according to a number of sources. In fact, many have referred to as the Apple way of being organized around software, hardware and services. While this is working for Apple, the unasked and unanswered questions are will it work at Microsoft? Breaking down silos isn’t as easy as you may think, and according to those who seem to know there are a lot of silos inside of Microsoft.

People have vested interests in the current way things are working and will not willingly go along with the new announced structure. Expect some protracted infighting before people come around to accepting the newly defined structure. This will take time and will have a cost not just in money, but drops in customer service, and the lost of some customers.

Cultural Entrenchment:

This is the first cousin to organizational entrenchment. People have a vested interest in keeping things they way they are. They’ve figured out how to navigate the internal bureaucratic maze that develops in organizations the size of Microsoft. Internally they’ve figured out how to get things done not to mention who the real power players are inside the organization. According to one account I read as crazy as Microsoft’s internal structure is, it apparently has internal support among employees and don’t want to see it change. The reason, they know how work it to their advantage. So with this newly announced change, they have concerns about how this will upset their personal apple cart.

Talent Loss:

Ballmer has stated there will be no layoffs. That’s questionable. With this type of change, something will have to give from an employee standpoint. What Ballmer has set in motion will reverberate throughout the organization with not everyone being happy and will result in an exodus of talent. How large the exodus will be is speculative at this point, but with any organizational change of this type, there are always winners and losers.

Apparently, the market was more responsive to the announcement of Steve Ballmer retirement than his organizational change. Microsoft watchers are in two camps, those who feel it was overdue others who believe it will just lead to mass confusion and make a mess of everything. It’s like the end of the parade at Disneyworld when the elephants come marching down Main Street, followed by the crew that have to clean up the mess the elephants make.

Whoever, gets to be the new CEO at the end of Ballmer’s term I hope he has a big brush and plenty of water.

© Timothy A. Wilson 2013. All Rights Reserved