Microsoft

http://www.nytimes.com/2013/07/12/business/the-­‐challenge-­‐of-­‐creating-­‐a-­‐unified-­‐organizational-­‐ strategy.html?src=recg&pagewanted=print  

New  York  Times     July  11,  2013  

The  Challenge  of  Creating  a  Unified  Organizational  Strategy  

By  ADAM  BRYANT  

IN  announcing  its  reorganization  on  Thursday,  Microsoft  provided  a  stark  reminder  of  a  leadership   challenge  that  all  chief  executives  face:  How  do  you  get  everyone  to  think  in  terms  of  “Us”  —  we’re  all   on  the  same  team  —  rather  than  thinking  of  colleagues  in  other  divisions  as  “Them”?    

To  be  clear,  it  is  hard  to  do.  The  default  behavior  for  human  beings  is  to  think  in  terms  of  tribes.  If  you   work  in  a  small  department  in  a  big  company,  you’re  naturally  going  to  identify  most  closely  with  your   immediate  colleagues.  You’ll  have  lunch  or  coffee  together,  and  maybe  even  socialize  with  them  outside   the  office.    

Other  colleagues  you  see  in  the  hallway  and  on  the  elevator  can  seem  like  total  strangers,  even  though   you  work  for  the  same  company.  Divisions  fighting  for  resources  and  attention  can  exacerbate  the   problem.    

It’s  a  theme  that  has  come  up  often  in  my  interviews  with  more  than  200  leaders  for  my  column,  Corner   Office,  and  smart  leaders  recognize  that  us-­‐versus-­‐them  behavior  can  ultimately  destroy  companies.    

So  what  should  leaders  do?  A  few  tips  have  emerged  from  my  interviews.    

Create  a  ‘One  Company’  Culture    

Symbolism  is  important,  in  both  the  language  that  leaders  use  and  the  organizational  chart  they  create.    

Here’s  how  Kathleen  L.  Flanagan,  the  chief  executive  of  Abt  Associates,  tackled  the  issue.    

“We’ve  grown  from  $180  million  in  annual  revenue  a  few  years  ago  to  $425  million  today.  As  the   company  grew,  more  business  units  were  created,  and  so  we  had  more  silos  in  the  organization.  My   objective  two  years  ago  in  coming  into  this  job  was  to  take  down  the  silos.  So  I  reorganized  the   company.  It  used  to  be  organized  around  lines  of  business  —  international,  U.S.-­‐based,  data  collection   —  and  there  used  to  be  senior  vice  presidents  who  led  each  of  those  big  businesses.  I  took  those  senior   V.P.  positions  away  and  hired  one  executive  vice  president  for  global  business  who  shared  my  vision  for   what  I  call  One  Global  Abt.    

At  the  heart  of  that  is  taking  down  the  walls  so  people  can  collaborate  more  freely,  so  that  we  can   leverage  all  of  Abt.  We  now  ask  people  to  pick  their  heads  up  out  of  their  project  work  or  their  division   focus  and  look  across  the  whole  company.  So  I  now  ask  my  managers  to  wear  two  hats.  Everybody’s  got   their  job  in  the  big  picture  of  the  company,  but  they  all  have  to  wear  an  Abt  hat.  It’s  really  easy,  given   the  time  pressures  and  the  pace  of  our  work,  to  put  blinders  on  and  be  very  project-­‐focused.  It’s  harder   to  take  a  step  back  and  ask,  “How  does  this  apply  to  the  whole  company?”    

Simplify  the  Scoreboard    

A  big  part  of  a  leader’s  job  is  to  establish  a  simple  set  of  performance  metrics  so  that  everyone  in  the   company  can  feel  as  if  they’re  part  of  a  broader  team,  and  can  understand  how  the  work  they  do   contributes  to  the  broader  goals.  Chief  executives  have  to  choose  those  metrics  carefully  because,  as   the  saying  goes,  what  gets  measured  gets  managed.    

A  powerful  example  of  this  came  from  Shivan  S.  Subramaniam,  the  chief  executive  of  FM  Global,  a   commercial  and  industrial  property  insurer,  who  shared  with  me  how  his  team  worked  hard  to  develop   very  simple  goals.    

“We  call  them  key  result  areas,  or  K.R.A.’s.  We’re  multinational  —  we’ve  got  5,100  people,  1,800  of   whom  are  engineers.  We’re  very  analytical.  But  we  have  three  K.R.A.’s,  nothing  terribly  fancy.  And   everybody  focuses  on  them.  One  is  on  profitability.  One  is  on  retention  of  existing  clients.  And  one  is  on   attracting  new  clients.  That’s  it.    

You  can  talk  to  people  in  San  Francisco,  Sydney  or  Singapore,  and  they’ll  know  what  the  three  K.R.A.’s   are.  All  of  our  incentive  plans  are  designed  around  our  K.R.A.’s,  and  every  one  of  those  K.R.A.’s  is  very   transparent.  Our  employees  know  how  we’re  doing.  And,  most  importantly,  they  understand  them,   whether  they’re  the  most  senior  manager  or  a  file  clerk,  so  they  know  that  ‘If  I  do  this,  it  helps  this  K.R.A.   in  this  manner.’”    

Communicate  Relentlessly  to  the  Entire  Staff    

There’s  a  reason  that  so  many  companies  hold  regular  all-­‐hands  meetings  (and  with  technology,  it’s   possible  to  do  them  in  large  and  sprawling  companies  now).  Again,  it’s  about  tribal  behavior.  You  have   to  bring  everybody  together  and  speak  to  everyone  as  a  group  for  people  to  identify  themselves  with   the  broadest  group.  Leaders  then  have  to  take  their  simple  plan  and  hammer  it  home,  again  and  again,   even  if  they  feel  like  everybody  has  heard  it  before  a  hundred  times.    

It’s  a  lesson  that  Christopher  J.  Nassetta,  the  Hilton  Worldwide  chief,  told  me  that  he  learned  over  time.    

“You  have  to  be  careful  as  a  leader,  particularly  of  a  big  organization.  You  can  find  yourself   communicating  the  same  thing  so  many  times  that  you  get  tired  of  hearing  it.  And  so  you  might  alter   how  you  say  it,  or  shorthand  it,  because  you  have  literally  said  it  so  many  times  that  you  think  nobody   else  on  earth  could  want  to  hear  this.  But  you  can’t  stop.  In  my  case,  there  are  300,000  people  who   need  to  hear  it,  and  I  can’t  say  it  enough.  So  what  might  sound  mundane  and  like  old  news  to  me  isn’t   for  a  lot  of  other  people.  That  is  an  important  lesson  I  learned  as  I  worked  in  bigger  organizations.”    

Steve  Ballmer’s  challenge  as  the  chief  executive  of  Microsoft  is  not  unlike  the  challenge  that  it  faces  with   technology:  how  to  take  something  very  complicated  —  be  it  a  software  program  or  a  sprawling   organizational  chart  —  and  make  it  simple  to  operate.  This  may  be  the  toughest  task  of  his  career.    

Adam  Bryant  writes  the  Corner  Office  column,  which  appears  on  Fridays  and  Sundays.