Who’s calling the shots?

Who Will Be Calling The Shots At Microsoft?

I wrote this week about Stephen Elop’s willingness to ax some of Microsoft’s products if he were to get the CEO role at Microsoft (see Stephan Elop supposedly thinking about making big changes at Microsoft). In particular, people with access to Elop told Bloomberg reporters that Bing would likely be shuttered, Xbox spun out, and other consumer-oriented products reconsidered.

Most cogent to the business orientation of the firm, Elop would move to make Office actually workable on other mobile devices, like iOS and Android. Some commentators made the case that Office Mobile is already available, but they seem to forget that it requires an Office 365 subscription, at the least. Here’s an interchange I had with Henry Blodgett and Mary Jo Foley on that:

Screenshot 2013-11-10 10.46.59

So, Elop may only be advocating a speed up, but it’s been a long time coming.

However, others have started to wade in, notably, Paul Allen, the billionaire co-founder of Microsoft. The chief investment officer of Allen’s family investment office Vulcan Capital is Paul Ghaffari, and he spoke at The Financial Times Investment Summit recently, and according to Stephen Foley of the Financial Times he said this:

Mr Ghaffari said the overwhelming majority of Microsoft’s earnings were generated by selling software and services to business customers.

“The search business and even Xbox, which has been a very successful product, are detracting from that. We would want them to focus on their best competencies,” he said.

“My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud.”

The Microsoft board has shown a new “receptivity to getting outside views,” Mr Ghaffari said, adding that the search for a successor to Mr Ballmer was being handled well.

If the board opts for rumoured candidate Alan Mulally, currently chief executive of Ford, Mr Ghaffari suggested he be paired with another executive with technology product experience. Other shareholders have questioned the recruitment process, including the issue of whether Mr Gates may circumscribe future strategy.

Note that this presentation preceded the Bloomberg reports about Elop.

Other reports suggest that the Microsoft board wants to replace Ballmer before the end of the year, partly to deal with the issues surrounding its Nokia acquisition, the release of the Xbox One console, and to complete the company’s reorganization (which is still a work in progress). The same names keep popping up —  Elop, Ford’s Mullaly, former Microsofty Paul Maritz, and current evangelism and business development head, Tony Bates, the former CEO of Skype — with no dark horse appearing on the horizon.

So far, Elop is the only one that has presented a new vision for the company to the outside world, and it lines up with what investors like Allen seem to think is a wise course. But the others may be quietly presenting plans for Microsoft to the board, but not leaking it to the world. Personally, Paul Maritz might have a better claim for successfully leading large and successful business software companies, like VMware and Pivotal.

‘Because Marissa Said So’

There is a growing furor at Yahoo about Marissa Mayer’s Quarterly Performance Review system, instituted last year around the time of the ‘No Remote Work’ mandate. In essence, Mayer’s created a review approach that attempts to systematize reviews of employees: reducing the role of the manager in evaluating an employee’s performance, and placing employees along a curve.

This is the most recent example of the human resources issue: should all employees be evaluated using a companywide, ‘objective’ approach, or should employees be measured for the effectiveness in the work setting they are part of? On one side, the company is seen as a large monolithic collective, and all are ranked based on company-wide metrics and considerations, such as the degree to which they align with corporate culture. On the other side, an employee would be measured based on how their efforts supported localized goals, like getting their product designed and out the door on time. In place of corporate goals, localized goals would dominate.

Mayer is in favor of the former, which comes along with the need — apparently — for managers to find a certain percentage of their teams ‘missing’ goals: to match the curve, and to serve up candidates for firing. Mayer has denied this in a 7 November Yahoo Q&A, as Kara Swisher reported,

Mayer highlighted that a part of the quarterly process called the “bucket” ranking allows for a divergence of plus or minus one to three percentage points. According to sources, this still apparently requires mandatory calibration, using the rankings: Greatly Exceeds (10 percent) Exceeds (25 percent), Achieves (the largest pool at 50 percent), Occasionally Misses (10 percent) and Misses (five percent).

There are rumors that these ratios may be relaxed, but there is no suggestion that the QPR regime will continue, as part of that glorious ‘entrepreneurial’ culture that Mayer is trying so hard to impose at Yahoo.

Are Millennials Calling The Shots?

I interviewed Avinoam Nowogrodski this week, the first in an ongoing series called The New Visionaries, where I plan to talk for entrepreneurs building social tools (see The New Visionaries: Avinoam Nowogrodski). He had piqued my interest by suggesting the businesses could learn a lot from Millennials, which he defended in the interview

According to a recent Forbes article, by 2025 more than 80 million Millennials are projected to be in the workplace. On the one hand, some feel this brings a wave of ambitious individuals with high expectations. On the other hand, I believe Millennials, more than any other generation, stand to democratize collaboration, which in turn can empower individual workers of all ages.

Because Millennial workers were raised in the digital age of transparency, they are accustomed to posting their activities online and having their progress followed. For them, success at work is about proving their worth to the team and the project. They must have an online voice and be constantly augmenting that voice and adding clarity to the team. Millennials thrive on transparency and a sense of team cohesion, which is something that social media provides. Because they are used to interacting online regardless of their physical locations and the time of day, they will provide the impetus companies need to embrace workforce mobility.

I read a story by Tom Agan in the New York Times today that provided additional support for Avinoam’s argument, and some specific examples:

I worked with one executive who was starting a big I.T. project — and she was shocked and a little embarrassed to learn that her mostly-millennial team had identified a lack of support for the effort among higher-ups. How? During her introductory presentation, they sent instant messages among themselves and to others in the company and figured it out.

[...]

When I worked at Nielsen, I led a quantitative study of major consumer companies like Kraft and Procter & Gamble — research that demonstrates the link between learning and innovation. The study found that employees were likely to generate more revenue if they held mandatory meetings to identify the strengths and weaknesses of new products after their introduction, used a consistent set of questions to do so, and recorded what they learned.

 At some companies and universities, smart leaders are already tapping into millennials’ abilities. For instance, when leading conference calls, one senior executive I know asks younger staff members to introduce the instant messages they send during the meeting directly into the discussion. Rather than keeping the two streams of information separate, he is intentionally encouraging and inviting the parallel conversation into the mix.

At Northwestern University, teams of undergraduate and graduate students — guided by older, experienced faculty members and alumni, and often paired with senior-level researchers — create plans for start-ups in an interdisciplinary series of classes called NUvention. Over the last two years, three of these teams have won first- or second-place awards in the Rice Business Plan Competition, to the tune of more than $1.5 million in prize money. And the winning teams have gone on to raise over $1 million each.

Mike Marasco, the leader of the NUvention program, puts it this way: “Millennials work more closely together, leverage right- and left-brain skills, ask the right questions, learn faster and take risks previous generations resisted. They truly want to change the world and will use technology to do so.”

In another example of Millennials’ preferences, Goldman Sachs recently announced that they want their junior bankers to work less, so they don’t burn out and quit. They also dropped their efforts to prohibit first year bankers talking with headhunters, and dropped the initial two year contract arrangement, making new hires full-time, regular employees from day one.

Millennials are starting to change the world of business, one text message at a time.

Relevant Analyst
Stowe Boyd

Stowe Boyd

Lead analyst, future of work Gigaom Research and stoweboyd.com

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